Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Share Name	Share Symbol	Market	Type
Squarespace Inc	NYSE:SQSP	NYSE	Common Stock

	Price Change	% Change	Share Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	46.57				0	00:00:00

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

FORM 10-Q

_________________________________

[Mark One]


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number: 001-40393

SQUARESPACE, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware (State or Other Jurisdiction of Incorporation or Organization)			20-0375811 (I.R.S. Employer Identification No.)

225 Varick Street, 12th Floor New York, New York (Address of Principal Executive Offices)			10014 (Zip Code)

Registrant’s Telephone Number, Including Area Code: (646) 580-3456

Securities registered pursuant to Section 12(b) of the Act:


Title of each class Class A Common Stock, 0.0001 par value per share			Trading Symbol(s) SQSP			Name of each exchange on which registered New York Stock Exchange

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of June 30, 2024, the registrant had 90,630,649 shares of Class A Common Stock, 47,844,755 shares of Class B Common Stock, and no shares of Class C Common Stock, each with a par value of $0.0001 per share, outstanding.

Table of Contents

TABLE OF CONTENTS


			PAGE

PART I.		FINANCIAL INFORMATION	4
	Item 1.	Financial Statements (Unaudited)	4
		Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	4
		Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023	5
		Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2024 and 2023	6
		Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the Three and Six Months Ended June 30, 2024 and 2023	7
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	9
		Notes to Unaudited Condensed Consolidated Financial Statements	10
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	43
	Item 4.	Controls and Procedures	44

PART II.		OTHER INFORMATION	45
	Item 1.	Legal Proceedings	45
	Item 1A.	Risk Factors	45
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70
	Item 3.	Defaults upon Senior Securities	70
	Item 4.	Mine Safety Disclosures	71
	Item 5.	Other Information	71
	Item 6.	Exhibits	71

SIGNATURES			72

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that reflect our current views with respect to, among other things, future events and our future business, financial condition and results of operations. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or phrases or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not statements of historical fact, and are based on current expectations, estimates and projections about our industry as well as certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, which you should consider and read carefully, including but not limited to:

• our ability to consummate the Proposed Merger. See Description of Business – Proposed Merger, appearing in this Quarterly Report on Form 10-Q for further information;

•our ability to attract and retain customers and expand our customers’ use of our platform;

•our ability to anticipate market needs and develop new solutions to meet those needs;

•our ability to improve and enhance the functionality, performance, reliability, design, security and scalability of our existing solutions;

•our ability to compete successfully against current and future competitors;

•our ability to manage growth and maintain demand for our solutions;

•our ability to protect and promote our brand;

•our ability to generate new customers through our marketing and selling activities;

•our ability to successfully identify, manage and integrate any existing and potential acquisitions or achieve the expected benefits of such acquisitions;

•our ability to hire, integrate and retain highly skilled personnel;

•our ability to adapt to and comply with existing and emerging regulatory developments, technological changes and cybersecurity needs;

•our compliance with privacy and data protection laws and regulations as well as contractual privacy and data protection obligations;

•our ability to establish and maintain intellectual property rights;

•our ability to manage expansion into international markets;

•the expected timing, amount and effect of our share repurchases; and

• the other risks and uncertainties described under “Risk Factors.”

This list of factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Quarterly Report on Form 10-Q. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q, and our future levels of activity and performance, may not occur and actual results could differ materially and adversely from those described or implied in the forward-looking statements. As a result, you should not regard any of these forward-looking statements as a representation or warranty by us or any other person or place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

In addition, statements that contain “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that this information provides a reasonable basis for these statements, this information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

Table of Contents

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed as exhibits to the Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by the cautionary statements contained in this section and elsewhere in this Quarterly Report on Form 10-Q.

Table of Contents

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

SQUARESPACE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)


	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	270,363	$	257,702
Restricted cash	—		36,583
Investment in marketable securities	52,041		—
Accounts receivable	41,384		24,894
Due from vendors	—		6,089
Prepaid expenses and other current assets	83,016		48,947
Total current assets	446,804		374,215
Property and equipment, net	49,609		58,211
Operating lease right-of-use assets	61,016		77,764
Goodwill	196,522		210,438
Intangible assets, net	140,839		190,103
Other assets	11,560		11,028
Assets of business held for sale	94,529		—
Total assets	$	1,000,879	$	921,759
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	21,933	$	12,863
Accrued liabilities	98,933		99,435
Deferred revenue	397,923		333,191
Funds payable to customers	—		42,672
Debt, current portion	57,140		48,977
Operating lease liabilities, current portion	11,281		12,640
Total current liabilities	587,210		549,778
Deferred income taxes, non-current portion	1,164		1,039
Debt, non-current portion	487,846		519,816
Operating lease liabilities, non-current portion	71,843		97,714
Other liabilities	18,940		13,764
Liabilities of business held for sale	76,745		—
Total liabilities	1,243,748		1,182,111
Commitments and contingencies (see Note 11)
Stockholders’ deficit:
Class A common stock, par value of $0.0001; 1,000,000,000 shares authorized as of June 30, 2024 and December 31, 2023, respectively; 90,630,649 and 88,545,012 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	9		9
Class B common stock, par value of $0.0001; 100,000,000 shares authorized as of June 30, 2024 and December 31, 2023, respectively; 47,844,755 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	5		5
Class C common stock (authorized May 10, 2021), par value of $0.0001; 1,000,000,000 shares authorized as of June 30, 2024 and December 31, 2023, respectively; zero shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	—		—
Additional paid in capital	936,277		924,634
Accumulated other comprehensive loss	(1,280)		(843)
Accumulated deficit	(1,177,880)		(1,184,157)
Total stockholders’ deficit	(242,869)		(260,352)
Total liabilities and stockholders’ deficit	$	1,000,879	$	921,759

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SQUARESPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue	$	296,769	$	247,529	$	577,917	$	484,557
Cost of revenue	82,939		43,167		163,713		86,117
Gross profit	213,830		204,362		414,204		398,440
Operating expenses:
Research and product development	69,805		61,412		136,651		119,982
Marketing and sales	88,282		75,373		205,815		177,045
General and administrative	38,873		30,909		69,696		63,249
Total operating expenses	196,960		167,694		412,162		360,276
Operating income	16,870		36,668		2,042		38,164
Interest expense	(10,157)		(8,635)		(20,538)		(16,729)
Other income, net	4,454		2,038		9,031		1,198
Income/(loss) before (provision for)/benefit from income taxes	11,167		30,071		(9,465)		22,633
(Provision for)/benefit from income taxes	(5,034)		(26,411)		15,742		(18,471)
Net income	$	6,133	$	3,660	$	6,277	$	4,162

Net income per share, basic	$	0.04	$	0.03	$	0.05	$	0.03
Net income per share, diluted	$	0.04	$	0.03	$	0.04	$	0.03
Weighted-average shares used in computing net income per share, basic	137,760,693		135,302,409		137,348,777		135,111,072
Weighted-average shares used in computing net income per share, diluted	142,143,018		138,771,613		141,419,521		138,013,454

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SQUARESPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net income	$	6,133	$	3,660	$	6,277	$	4,162
Other comprehensive (loss)/income
Foreign currency translation adjustment	(374)		(296)		(330)		(38)
Unrealized (loss)/gain on marketable securities, net of income taxes	(80)		—		(107)		216
Total other comprehensive (loss)/income	(454)		(296)		(437)		178
Total comprehensive income	$	5,679	$	3,364	$	5,840	$	4,340

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SQUARESPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(in thousands, except share data)

(unaudited)

Three and Six Months Ended June 30, 2024


	Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional Paid in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Deficit
	Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2023	88,545,012	$	9	47,844,755	$	5	—	$	—	$	924,634	$	(843)	$	(1,184,157)	$	(260,352)
Stock-based compensation	—	—		—	—		—	—		28,979		—		—		28,979
Stock option exercises	420,214	—		—	—		—	—		841		—		—		841
Vested RSUs converted to common shares	1,808,975	—		—	—		—	—		—		—		—		—
Taxes paid related to net share settlement of equity awards	(769,189)	—		—	—		—	—		(24,022)		—		—		(24,022)
Repurchase and retirement of Class A common stock	(320,793)	—		—	—		—	—		(12,164)		—		—		(12,164)
Excise tax on repurchase of Class A common stock	—	—		—	—		—	—		284		—		—		284
Net income	—	—		—	—		—	—		—		—		144		144
Total other comprehensive income, net of taxes	—	—		—	—		—	—		—		17		—		17
Balance at March 31, 2024	89,684,219	$	9	47,844,755	$	5	—	$	—	$	918,552	$	(826)	$	(1,184,013)	$	(266,273)
Stock-based compensation	—	—		—	—		—	—		33,390		—		—		33,390
Stock option exercises	610,208	—		—	—		—	—		1,744		—		—		1,744
Vested RSUs converted to common shares	790,250	—		—	—		—	—		—		—		—		—
Taxes paid related to net share settlement of equity awards	(300,446)	—		—	—		—	—		(13,262)		—		—		(13,262)
Repurchase and retirement of Class A common stock	(153,582)	—		—	—		—	—		(4,147)		—		—		(4,147)
Excise tax on repurchase of Class A common stock	—	—		—	—		—	—		—		—		—		—
Net income	—	—		—	—		—	—		—		—		6,133		6,133
Total other comprehensive loss, net of taxes	—	—		—	—		—	—		—		(454)		—		(454)
Balance at June 30, 2024	90,630,649	$	9	47,844,755	$	5	—	$	—	$	936,277	$	(1,280)	$	(1,177,880)	$	(242,869)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SQUARESPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(in thousands, except share data)

(unaudited)

Three and Six Months Ended June 30, 2023


	Class A Common Stock			Class B Common Stock			Class C Common Stock			Additional Paid in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Deficit
	Shares	Amount		Shares	Amount		Shares	Amount
Balance at December 31, 2022	87,754,534	$	8	47,844,755	$	5	—	$	—	$	875,737	$	(1,665)	$	(1,177,076)	$	(302,991)
Stock-based compensation	—	—		—	—		—	—		22,595		—		—		22,595
Stock option exercises	13,050	—		—	—		—	—		52		—		—		52
Vested RSUs converted to common shares	1,357,462	—		—	—		—	—		—		—		—		—
Taxes paid related to net share settlement of equity awards	(573,862)	—		—	—		—	—		(13,369)		—		—		(13,369)
Repurchase and retirement of Class A common stock	(1,256,170)	—		—	—		—	—		(25,321)		—		—		(25,321)
Excise tax on repurchase of Class A common stock	—	—		—	—		—	—		(277)		—		—		(277)
Net income	—	—		—	—		—	—		—		—		502		502
Total other comprehensive income, net of taxes	—	—		—	—		—	—		—		474		—		474
Balance at March 31, 2023	87,295,014	$	8	47,844,755	$	5	—	$	—	$	859,417	$	(1,191)	$	(1,176,574)	$	(318,335)
Stock-based compensation	—	—		—	—		—	—		30,648		—		—		30,648
Stock option exercises	21,635	—		—	—		—	—		42		—		—		42
Vested RSUs converted to common shares	640,562	—		—	—		—	—		—		—		—		—
Taxes paid related to net share settlement of equity awards	(233,544)	—		—	—		—	—		(6,915)		—		—		(6,915)
Net income	—	—		—	—		—	—		—		—		3,660		3,660
Total other comprehensive loss, net of taxes	—	—		—	—		—	—		—		(296)		—		(296)
Balance at June 30, 2023	87,723,667	$	8	47,844,755	$	5	—	$	—	$	883,192	$	(1,487)	$	(1,172,914)	$	(291,196)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SQUARESPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2024		2023
OPERATING ACTIVITIES:
Net income	$	6,277	$	4,162
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	36,885		14,477
Stock-based compensation	60,965		51,605
Deferred income taxes	125		124
Non-cash lease income	(1,757)		(989)
Other	625		310
Changes in operating assets and liabilities:
Accounts receivable and due from vendors	(15,697)		2,364
Prepaid expenses and other current assets	(35,545)		(1,480)
Accounts payable and accrued liabilities	29,784		9,822
Deferred revenue	69,012		38,030
Funds payable to customers	(4,943)		(2,131)
Other operating assets and liabilities	117		408
Net cash provided by operating activities	145,848		116,702
INVESTING ACTIVITIES:
Proceeds from the sale and maturities of marketable securities	1,000		39,664
Purchases of marketable securities	(52,856)		(7,824)
Purchase of property and equipment	(6,074)		(7,167)
Net cash (used in)/provided by investing activities	(57,930)		24,673
FINANCING ACTIVITIES:
Principal payments on debt	(24,488)		(20,379)
Payments for repurchase and retirement of Class A common stock	(16,311)		(25,321)
Taxes paid related to net share settlement of equity awards	(37,640)		(20,318)
Proceeds from exercise of stock options	2,585		134
Net cash used in financing activities	(75,854)		(65,884)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(513)		165
Increase in cash, cash equivalents and restricted cash, including cash classified as assets of business held for sale	11,551		75,656
Less: Increase in cash, cash equivalents and restricted cash classified as assets of business held for sale	(35,473)		—
Net (decrease)/increase in cash, cash equivalents and restricted cash	(23,922)		75,656
Cash, cash equivalents and restricted cash at the beginning of the period	294,285		232,620
Cash, cash equivalents and restricted cash at the end of the period	$	270,363	$	308,276

Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	270,363	$	274,004
Restricted cash	—		34,272
Cash, cash equivalents, and restricted cash at the end of the period	$	270,363	$	308,276

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
Cash paid during the year for interest	$	19,883	$	16,360
Cash paid during the year for income taxes, net of refunds	$	31,231	$	22,902
Cash paid for amounts included in the measurement of operating lease liabilities	$	8,124	$	7,861

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCE ACTIVITIES
Purchases of property and equipment included in accounts payable and accrued liabilities	$	295	$	196
Capitalized stock-based compensation	$	1,404	$	1,638

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

1.Description of Business

Business

Squarespace, Inc. and its subsidiaries (the “Company”) is a leading all-in-one platform for businesses and independent creators to build an online presence, grow their brands and manage their businesses across the internet. The Company offers websites, domains, e-commerce, tools for managing a social media presence, marketing tools, scheduling and hospitality services. The Company is headquartered in New York, NY, with additional offices operating in Chicago, IL, Dublin, Ireland and Aveiro, Portugal.

Proposed Merger

On May 13, 2024, the Company entered into a definitive agreement to go private with an affiliate of Permira, a global investment firm, in an all-cash transaction valued at approximately $6,900,000 on an enterprise value basis (the "Proposed Merger"). Specifically, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Spaceship Purchaser, Inc., a Delaware corporation (“Parent”), and Spaceship Group MergerCo, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”, and together with Parent, the “Buyer Parties”), providing for the merger of Merger Sub with and into the Company, with the Company surviving such merger as a wholly owned subsidiary of Parent (the “Merger”).

Under the terms of the Merger Agreement, each share of the Company's common stock outstanding as of immediately prior to the effective time of the Merger (the "Effective Time"), other than shares owned by the Company and certain shares owned by affiliates of Anthony Casalena, affiliates of General Atlantic and affiliates of Accel, will be cancelled and extinguished and automatically converted into the right to receive cash in an amount equal to $44.00, without interest thereon and subject to any applicable withholding taxes. If the Merger is consummated, the Company's Class A common stock will be de-listed from the New York Stock Exchange and de-registered under the Securities Exchange Act of 1934, as amended.

The Merger Agreement contains customary representations, warranties, and covenants. Consummation of the Merger is subject to receipt of regulatory approvals and certain other conditions set forth in the Merger Agreement, including, but not limited to, (i) the affirmative vote of the holders of a majority in voting power of the outstanding shares of the Company's common stock beneficially owned, directly or indirectly, by Company stockholders not affiliated with Anthony Casalena, General Atlantic, Accel, Permira or the directors and officers of the Company; (ii) the accuracy of the representations and warranties of the Company in the Merger Agreement, subject to applicable materiality or other qualifiers, as of certain dates set forth in the Merger Agreement; (iii) the Company having performed and complied in all material respects with all covenants under the Merger Agreement required to be performed and complied with by it at or prior to the closing of the Merger; (iv) receipt by the Buyer Parties of a customary closing certificate of the Company; and no Company material adverse effect having occurred after the date of the Merger Agreement; and (v) no order, injunction or judgment issued by any governmental authority preventing the consummation of the Merger being in effect, nor shall any action have been taken by any such governmental authority, and no statute, rule, regulation or order having been enacted, entered, enforced or deemed applicable to the Merger that, in each case, prohibits, makes illegal, or enjoins the consummation of the Merger. The Company's Board of Directors unanimously authorized, adopted and approved the Merger Agreement. Upon satisfaction of these and other customary closing conditions, the transaction is expected to close by the fourth quarter of 2024. The Company cannot predict with certainty, however, whether and when all of the required closing conditions will be satisfied or if the Merger will close.

The Merger Agreement contains certain termination rights for the Buyer Parties. Upon termination of the Merger Agreement under specified circumstances, including the Company terminating the Merger Agreement to enter into an alternative acquisition agreement with respect to a superior proposal in accordance with the Merger Agreement or Parent terminating the Merger Agreement due to a recommendation change as defined in the Merger Agreement, in each case, pursuant to and in accordance with a customary "fiduciary out" provision in the Merger Agreement, the Company will be required to pay Parent a termination fee of $198,700. The $198,700 termination fee will also be payable by the Company concurrently with the consummation of an acquisition transaction if the Merger Agreement is terminated under certain circumstances and prior to such termination, an acquisition proposal for an acquisition transaction has been made to the Company or has been publicly announced, proposed, disclosed or otherwise communicated and not withdrawn or otherwise abandoned and within 12 months after the termination any acquisition transaction is consummated or the Company enters into an agreement providing for any acquisition transaction. The Merger Agreement also contains certain termination rights for the Company. Upon termination of the Merger Agreement under specified circumstances, Parent will be required to pay the Company a termination fee of approximately $231,817. In addition to the foregoing termination rights, and subject to certain limitations, the Company or Parent may terminate the Merger Agreement if the Merger is not consummated by May 12, 2025.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

Also on May 13, 2024, in connection with the execution of the Merger Agreement, Parent has delivered (a) equity commitment letters between Parent and the financing sources identified therein, pursuant to which such financing sources have committed, subject to the terms and conditions contained therein, to invest in Parent, directly or indirectly, the cash amounts set forth therein (the “Equity Commitment Letters”) and (b) a debt commitment letter executed by the financing sources identified therein, pursuant to which such financing sources have committed, subject to the terms and conditions contained therein, to provide Parent with debt financing in the amounts specified therein (the “Debt Commitment Letter”). The proceeds of the Equity Commitment Letters and the Debt Commitment Letter are intended to fund the merger consideration payable in the Merger, on the terms and subject to the conditions set forth therein. The Company is an express limited third party beneficiary of certain rights in the Equity Commitment Letters, on the terms and subject to the conditions set forth therein.

Additionally, on May 13, 2024, in connection with the execution of the Merger Agreement, Parent has delivered a fee funding agreement in favor of the Company and pursuant to which, on the terms and subject to the conditions contained therein, certain investors affiliated with Permira are agreeing to pay a portion of certain obligations of the Buyer Parties in connection with the Merger Agreement.

The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete, and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, which is attached as Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on May 13, 2024 and incorporated by reference herein.

The Company's transaction expenses associated with the negotiation of the Merger Agreement were $4,198 and were included in general and administrative expenses in the condensed consolidated statements of operations for the three and six months ended June 30, 2024. The Merger Agreement did not otherwise impact the Company’s condensed consolidated financial statements as of June 30, 2024.

Acquisitions

On September 7, 2023, the Company closed an asset purchase agreement with Google LLC ("Google") to acquire, among other things, Google's domain assets, including all domain names for which Google was the registrar or reseller, for a total amount paid of $180,721 (the "Google Domains Asset Acquisition").

2.Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The Company’s condensed consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and include the Company’s wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. The condensed balance sheet data as of December 31, 2023 was derived from the Company's audited financial statements but does not include all disclosures required by U.S. GAAP. Therefore, these unaudited, condensed, consolidated financial statements and accompanying notes should be read in conjunction with the Company's annual consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K filed with the SEC on February 28, 2024. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management’s estimates are based on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates.

Significant estimates include but are not limited to (i) the inputs used in the valuation of acquired intangible assets; (ii) the inputs used in the quantitative assessment over goodwill impairment; (iii) the recognition, measurement and valuation of current and deferred income taxes; (iv) amount of applicable indirect tax nexus in different jurisdictions and associated indirect tax liabilities; and (v) the incremental borrowing rate for operating lease liabilities. The Company evaluates its assumptions and estimates on an ongoing basis and adjusts prospectively, if necessary.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

Concentration of Risks Related to Credit, Interest Rates and Foreign Currencies

The Company is subject to credit risk, interest rate risk on its outstanding indebtedness, market risk on investments and foreign currency risk in connection with the Company’s operations internationally.

The Company maintains the components of its cash and cash equivalents balance in various accounts, which from time to time exceed the federal depository insurance coverage limit. In addition, substantially all cash and cash equivalents, as well as marketable securities, are held by four financial institutions. The Company has not experienced any concentration losses related to its cash, cash equivalents and marketable securities to date.

During the three and six months ended June 30, 2024 and 2023, no single customer accounted for more than 10% of the Company’s revenue. As of June 30, 2024 and December 31, 2023, one customer accounted for 30% and 37%, respectively, of the Company's accounts receivable.

The Company is also subject to foreign currency risks that arise from normal business operations. Foreign currency risks include the translation of local currency and intercompany balances established in local customer currencies sold through the Company’s international subsidiaries.

Cash and Cash Equivalents

Cash and cash equivalents are stated at fair value. The Company considers all highly liquid investments purchased with an original maturity date of 90 days or less from the date of original purchase to be cash equivalents.

Interest income on cash and cash equivalents was $2,634 and $5,617 for the three and six months ended June 30, 2024, respectively, and $1,472 and $2,534 for the three and six months ended June 30, 2023, respectively, and was included in other income, net in the condensed consolidated statements of operations.

Restricted Cash and Payment Processing Transactions

The Company holds funds and processes certain payments on behalf of its customers consisting of prepayments for restaurant reservations, to-go orders and events. While the Company does not have any contractual obligations to hold such cash as restricted, the prepayments have been historically included in restricted cash in the condensed consolidated balance sheets. As of June 30, 2024, these prepayments were included in assets of business held for sale in the condensed consolidated balance sheet.

In addition, the Company historically recognized the liability due to its customers in funds payable to customers in the condensed consolidated balance sheets. As of June 30, 2024, these liabilities were included in liabilities of business held for sale in the condensed consolidated balance sheet. The Company remits funds to customers based on the stipulated contract terms. In addition to restricted cash held on behalf of its customers, the Company recognizes in-transit receivables from certain third-party vendors which assist in processing and settling payment transactions due to a clearing period before the related cash is received or settled. In-transit receivables have been historically included in due from vendors in the condensed consolidated balance sheets. As of June 30, 2024, these in-transit receivables were included in assets of business held for sale in the condensed consolidated balance sheet.

See “Note 4. Business Held for Sale” for further information on assets and liabilities classified as held for sale as of June 30, 2024.

The following table represents the assets and liabilities related to payment processing transactions for restaurant reservations, to-go orders and events:


	June 30, 2024		December 31, 2023
Restricted cash	$	32,685	$	36,583
Due from vendors	5,044		6,089
Total payment processing assets	37,729		42,672
Funds payable to customers	(37,729)		(42,672)
Total payment processing liabilities	(37,729)		(42,672)
Total payment processing transactions, net	$	—	$	—

Investment in Marketable Securities

The Company classifies its investment in marketable securities as available for sale securities which are stated at fair value, as determined by quoted market prices. Unrealized gains and losses are included in accumulated other comprehensive loss in the condensed consolidated balance sheets. Unrealized losses are evaluated for impairment and those considered other than temporarily impaired are included in other income, net in the condensed consolidated statements of operations. Subsequent gains or losses realized upon redemption or sale of these securities in excess or below their adjusted

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

cost basis are also included in other income, net in the condensed consolidated statements of operations. The cost of securities sold is based upon the specific identification method.

The Company considers all of its investment in marketable securities, irrespective of the maturity date, as available for use in current operations, and therefore classifies these securities within current assets in the condensed consolidated balance sheet.

Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement, describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.

The three-level hierarchy for fair value measurements is defined as follows:

Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;

Level 2 Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; and

Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Business Held for Sale

The Company classifies assets and liabilities to be disposed of by sale ("disposal group") as held for sale when (i) management commits to a plan to sell the disposal group; (ii) the disposal group is available for immediate sale in its present condition; (iii) an active program required to complete the plan to sell the disposal group has been initiated; (iv) the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale, within one year; (v) the disposal group is for sale at a price that is reasonable in relation to its current fair value; and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Once classified as held for sale, depreciation and amortization of the long-lived assets included in the disposal group cease and the disposal group is measured at the lower of its carrying value or fair value less costs to sell. If the disposal group constitutes a business in accordance with ASC Topic 805, Business Combinations, the Company allocates a portion of its reporting unit's goodwill to the disposal group on a relative fair value basis.

Net Income/(Loss) Per Share

The Company computes net income/(loss) per share under the two-class method required for multiple classes of common stock. The rights, including the liquidation and dividend rights, of the Class A, Class B and Class C common stock are substantially identical, other than voting rights. Accordingly, the Class A, Class B and Class C common stock share in the Company’s earnings.

Basic net income/(loss) per share is computed by dividing net income/(loss) by the weighted-average number of shares of the Company’s Class A, Class B and Class C common stock outstanding.

Diluted net income per share is computed by giving effect to all dilutive securities. During periods of net loss, potentially dilutive Class A, Class B and Class C common stock equivalents are excluded from the calculation as their effect is anti-dilutive. During periods of net income, diluted net income per share is computed by dividing net income by the resulting weighted-average number of fully diluted Class A, Class B and Class C common stock outstanding.

Recently Issued Accounting Pronouncements

Accounting Pronouncements Pending Adoption

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). This standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis, with early adoption permitted. The Company is currently evaluating the timing of its adoption of this standard and the impact in its condensed consolidated financial statements.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure (“ASU 2023-09”). This standard provides transparency to income tax disclosures related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 for public entities on a prospective or retrospective basis, with early adoption permitted. The Company is currently evaluating the timing of its adoption of this standard and the impact in its condensed consolidated financial statements.

3.Revenue

The Company primarily derives revenue from annual and monthly subscriptions. Revenue is also derived from non-subscription services, including fixed percentages or fixed-fees earned on revenue share arrangements with third-parties and on sales made through the Company’s customers’ sites.

The Company has disaggregated revenue from contracts with customers by product type, subscription type, revenue recognition pattern and geography as these categories depict the nature, amount, timing and uncertainty of revenue and how cash flows are affected by economic factors. The Company disaggregates revenue by product type as follows:

Presence

Presence revenue primarily consists of fixed-fee subscriptions to the Company’s plans that offer core platform functionalities, currently branded “Personal” and “Business” plans. Presence revenue also consists of fixed-fee subscriptions related to additional entry points for starting online such as domain managed services and social media stories. Additionally, presence revenue is derived from third-party solutions related to email services and access to third-party content to enhance online presence. For customers in need of a larger scale solution, the Company has an enterprise offering, whereby revenue is recognized over the life of the contract.

Commerce

Commerce revenue primarily consists of fixed-fee subscriptions to the Company’s plans that offer all the features of presence plans as well as additional features that support end to end commerce transactions, currently branded “Basic” and “Advanced” plans. Commerce revenue also includes fixed-fee subscriptions to a number of other tools that support running an online business such as marketing, memberships, courses, scheduling and hospitality tools. Non-subscription revenue is derived from fixed-fees earned on revenue share arrangements with commerce partners as well as fixed transaction fees earned on gross payment volume processed through Business plan sites, certain hospitality offerings and the Company's native payment processing solution. Commerce revenue also includes payment processing fees received for use of the Company’s hospitality services.

Revenue by Product Type, Subscription Type and Revenue Recognition Pattern

The following tables summarize revenue by product type, subscription type, and revenue recognition pattern for the periods presented:


	Three Months Ended June 30, 2024						Six Months Ended June 30, 2024
	Presence		Commerce		Total		Presence		Commerce		Total
Subscription revenue
Transferred over time	$	207,548	$	62,162	$	269,710	$	401,594	$	123,361	$	524,955
Transferred at a point in time	6,936		—		6,936		12,925		—		12,925
Non-subscription revenue
Transferred over time	802		1,040		1,842		1,532		1,968		3,500
Transferred at a point in time	87		18,194		18,281		206		36,331		36,537
Total revenue	$	215,373	$	81,396	$	296,769	$	416,257	$	161,660	$	577,917


	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
	Presence		Commerce		Total		Presence		Commerce		Total
Subscription revenue
Transferred over time	$	167,335	$	56,807	$	224,142	$	326,915	$	110,863	$	437,778
Transferred at a point in time	3,857		—		3,857		8,001		—		8,001
Non-subscription revenue
Transferred over time	822		832		1,654		1,421		1,727		3,148
Transferred at a point in time	60		17,816		17,876		128		35,502		35,630
Total revenue	$	172,074	$	75,455	$	247,529	$	336,465	$	148,092	$	484,557

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

Revenue by Geography

Revenue by geography is based on the customer’s self-reported country identifier or, if not available, the billing address or IP address, and was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
United States	$	212,424	$	177,195	$	413,459	$	346,949
International	84,345		70,334		164,458		137,608
Total revenue	$	296,769	$	247,529	$	577,917	$	484,557

Currently no individual country contributes greater than 10% of total international revenue.

Deferred Revenue

The deferred revenue balance as of June 30, 2024 and December 31, 2023 represents the Company’s aggregate remaining performance obligations that are expected to be recognized as revenue in subsequent periods. Generally, the Company’s contracts are for one year or less and the value for contracts with terms greater than one year is not material. The change in deferred revenue primarily reflects cash payments received during the period for which the performance obligation was not satisfied prior to the end of the period partially offset by $98,017 and $249,283 of revenues recognized during the three and six months ended June 30, 2024, respectively, and $79,714 and $203,843 during the three and six months ended June 30, 2023, respectively.

Capitalized Contract Costs

Assets capitalized related to contract costs consisted of the following:


	June 30, 2024		December 31, 2023
Capitalized referral fees, current	$	7,624	$	7,626
Capitalized referral fees, non-current	10,429		9,715
Capitalized app fees, current	733		750
Sales commissions, current (1)	60		496
Sales commissions, non-current (2)	83		144
Total capitalized contract costs	$	18,929	$	18,731

________________

(1)Excludes $776 of sales commissions, current which have been reclassified to assets of business held for sale in the condensed consolidated balance sheet as of June 30, 2024. See "Note 4. Business Held for Sale" for further information.

(2)Excludes $371 of sales commissions, non-current which have been reclassified to assets of business held for sale in the condensed consolidated balance sheet as of June 30, 2024. See "Note 4. Business Held for Sale" for further information.

Amortization of capitalized contract costs was included in the following line items in the condensed consolidated statements of operations:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	734	$	848	$	1,483	$	1,709
Marketing and sales	2,411		2,513		5,004		4,580
Total amortization of capitalized contract costs	$	3,145	$	3,361	$	6,487	$	6,289

There were no impairment charges recognized related to capitalized contract costs for the three and six months ended June 30, 2024 and 2023.

Obligations for Returns, Refunds and Other Similar Obligations

The Company did not have any material change in revenue recognition from a previous period due to refunds, change in transaction price or other consideration variables. As of June 30, 2024 and December 31, 2023, the Company's obligation for refunds was not material.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

4.Business Held for Sale

On June 21, 2024, the Company entered into a securities purchase agreement with American Express Travel Related Services Company, Inc. ("American Express") whereby American Express has agreed to acquire all of the issued and outstanding limited liability company interests of the Company's hospitality platform, Tock LLC, for cash proceeds of $400,000 (the "Divestiture"). The Divestiture is expected to be completed within one year and is subject to certain customary closing adjustments and conditions.

Business held for sale comprised of the following assets and liabilities as of June 30, 2024:


	June 30, 2024
Cash and cash equivalents	$	2,788
Restricted cash	32,685
Accounts receivable, net	274
Due from vendors	5,044
Prepaid expenses and other current assets	1,567
Property and equipment, net	7,268
Operating lease right-of-use assets	9,925
Goodwill	13,916
Intangible assets, net	20,689
Other assets	373
Total assets of business held for sale	$	94,529

Accounts payable	$	1,160
Accrued liabilities	19,157
Deferred revenue	63
Funds payable to customers	37,729
Operating lease liabilities, current portion	1,326
Operating lease liabilities, non-current portion	17,310
Total liabilities of business held for sale	$	76,745

5.Investment in Marketable Securities

The following table represents the amortized cost, gross unrealized gains and losses and fair market value of the Company’s available-for-sale (“AFS”) marketable securities as of June 30, 2024:


	June 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Aggregate Fair Value
Corporate bonds and commercial paper	$	40,359	$	—	$	(72)	$	40,287
U.S. treasuries	11,789		—		(35)		11,754
Total investment in marketable securities	$	52,148	$	—	$	(107)	$	52,041

The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of June 30, 2024, aggregated by investment category and the length of time that individual securities have been in a continuous loss position were as follows:


	June 30, 2024
	Less than 12 months				12 months or Greater				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Corporate bonds and commercial paper	$	39,948	$	(72)	$	—	$	—	$	39,948	$	(72)
U.S. treasuries	11,633		(35)		—		—		11,633		(35)
Total investment in marketable securities	$	51,581	$	(107)	$	—	$	—	$	51,581	$	(107)

The Company recognized unrealized losses of $80 and $107 with respect to its AFS marketable securities during the three and six months ended June 30, 2024, respectively. The unrealized losses were due to changes in market rates and were determined to be temporary in nature. The unrealized losses were included in accumulated other comprehensive loss in the condensed consolidated balance sheet as of June 30, 2024.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

The Company reviews AFS marketable securities on a recurring basis to evaluate whether or not any securities have experienced an other-than-temporary decline in fair value. Some factors considered in establishing an expected credit loss on AFS marketable securities are the length of time and extent to which the market value has been less than the cost, the financial condition and near-term prospects of the issuer, the Company's intent to sell, and whether it is more likely than not the Company will be required to sell the investment before recovery of the investments amortized cost basis. The Company did not have any AFS marketable securities for which an expected credit loss has been recorded as the Company's AFS marketable securities with an amortized cost basis lower than fair value were not considered other-than-temporary declines in fair value. In the instance that the Company has AFS marketable securities at an amortized cost basis lower than fair value, the Company does not intend to sell, nor is it more-likely-than not the Company would be required to sell the AFS marketable security prior to recovery.

The contractual maturities of the investments classified as marketable securities were as follows:


	June 30, 2024
Due within 1 year	$	31,136
Due in 1 year through 5 years	20,905
Total investment in marketable securities	$	52,041

The Company did not own any AFS marketable securities as of December 31, 2023.

6.Fair Value of Financial Instruments

A summary of the Company’s investments in marketable securities (including, if applicable, those marketable securities classified as cash and cash equivalents) were as follows:


	June 30, 2024
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	214,495	$	—	$	—	$	214,495
Available-for-sale debt securities
Corporate bonds and commercial paper	—		40,287		—		40,287
U.S. treasuries	11,754		—		—		11,754
Total	$	226,249	$	40,287	$	—	$	266,536


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	194,210	$	—	$	—	$	194,210
Total	$	194,210	$	—	$	—	$	194,210

The Company’s valuation techniques used to measure the fair value of money market funds and certain AFS marketable securities were derived from quoted prices in active markets for identical assets. The valuation techniques used to measure the fair value of the Company’s other debt securities, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data. There were no transfers of financial instruments between Level 1, Level 2 and Level 3 during the periods presented.

For certain other financial instruments, including accounts receivable, accounts payable and accrued liabilities, the carrying amounts approximate the fair value of such instruments due to the relatively short maturity of these balances. The Company records debt obligations at their approximate fair values as they are based upon rates available to the Company for obligations of similar terms and maturities.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

7.Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


	June 30, 2024		December 31, 2023
Prepaid income taxes	$	52,667	$	3,402
Prepaid operational expenses (1)	11,383		12,183
Capitalized contract costs (2)	8,417		8,872
Prepaid domain name registration fees	6,864		12,073
Prepaid advertising expenses	312		5,804
Other current assets (3)	3,373		6,613
Total prepaid expenses and other current assets	$	83,016	$	48,947

__________________

(1)Excludes $699 of prepaid operational expenses which have been reclassified to assets of business held for sale in the condensed consolidated balance sheet as of June 30, 2024. See "Note 4. Business Held for Sale" for further information.

(2)Excludes $776 of capitalized contract costs which have been reclassified to assets of business held for sale in the condensed consolidated balance sheet as of June 30, 2024. See "Note 4. Business Held for Sale" for further information.

(3)Excludes $92 of other current assets which have been reclassified to assets of business held for sale in the condensed consolidated balance sheet as of June 30, 2024. See "Note 4. Business Held for Sale" for further information.

As of June 30, 2024 and December 31, 2023, the Company had $377 and $3,895, respectively, in deposits for domain name registration fees at certain third-party registries in relation to the Google Domains Asset Acquisition included as other current assets above.

8.Accrued Liabilities

Accrued liabilities consisted of the following:


	June 30, 2024		December 31, 2023
Accrued product expenses	35,565		22,569
Accrued marketing expenses (1)	24,395		24,998
Accrued indirect taxes (2)	$	22,931	$	38,174
Accrued payroll expenses (3)	3,001		4,247
Other accrued expenses (4)	13,041		9,447
Total accrued liabilities	$	98,933	$	99,435

__________________

(1)Excludes $115 of accrued marketing expenses which have been reclassified to liabilities of business held for sale in the condensed consolidated balance sheet as of June 30, 2024. See "Note 4. Business Held for Sale" for further information.

(2)Excludes $16,980 of accrued indirect taxes which have been reclassified to liabilities of business held for sale in the condensed consolidated balance sheet as of June 30, 2024. See "Note 4. Business Held for Sale" for further information.

(3)Excludes $1,028 of accrued payroll expenses which have been reclassified to liabilities of business held for sale in the condensed consolidated balance sheet as of June 30, 2024. See "Note 4. Business Held for Sale" for further information.

(4)Excludes $1,034 of other accrued expenses which have been reclassified to liabilities of business held for sale in the condensed consolidated balance sheet as of June 30, 2024. See "Note 4. Business Held for Sale" for further information.

9.Debt

Debt outstanding as of June 30, 2024 and December 31, 2023 was as follows:


	June 30, 2024		December 31, 2023
Term Loan	$	546,910	$	571,398
Less: unamortized original issue discount	(1,301)		(1,761)
Less: unamortized deferred financing costs	(623)		(844)
Less: debt, current	(57,140)		(48,977)
Total debt, non-current	$	487,846	$	519,816

Credit Facility

On December 12, 2019, the Company entered into a credit agreement (the “2019 Credit Agreement”) with certain lending institutions (the “Credit Facility”) which included Initial Term A Loans for $350,000 (the "2019 Term Loan”), and Revolving Credit Loans of up to $25,000 (the “2019 Revolving Credit Facility”), which included a Letters of Credit sub-facility available up to a total of $15,000.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

On December 11, 2020, the Company amended the 2019 Credit Agreement (the “2020 Credit Agreement”) to increase the total size of the 2019 Term Loan to $550,000 (collectively, the “2020 Term Loan”) with the same lending institutions as the Credit Facility and extend the maturity date for the 2020 Term Loan and the 2019 Revolving Credit Facility (as extended, the "Revolving Credit Facility") to December 11, 2025.

On June 15, 2023, the Company amended the 2020 Credit Agreement (as amended, the "Credit Agreement") to increase the total size of the 2020 Term Loan to $650,000 (collectively, the "Term Loan") and, effective June 30, 2023, replace LIBOR as the benchmark rate with SOFR. The proceeds from the additional term loan commitments were funded on September 7, 2023 and used to partially fund the Google Domains Asset Acquisition, together with cash on hand.

Borrowings under the Credit Facility were subject to an interest rate equal to LIBOR plus the applicable margin based on our Consolidated Total Debt to Consolidated EBITDA ratio prior to June 30, 2023. Effective June 30, 2023, under the Credit Agreement, LIBOR as the benchmark rate was replaced with SOFR. The applicable margin was 1.60%, which includes a credit spread adjustment of 0.10%, and 1.50% as of June 30, 2024 and 2023, respectively. The effective interest rate was 6.94% and 6.70% as of June 30, 2024 and 2023, respectively. The effective interest rate for the Company’s final LIBOR payment, made on June 22, 2023, was 6.69%.

As of June 30, 2024, $7,255 was outstanding under the Revolving Credit Facility in the form of outstanding letters of credit and $17,745 remained available for borrowing by the Company. The letters of credit issued as of June 30, 2024 were related to certain of the Company's operating lease agreements for offices that require security deposits in the form of an irrevocable letter of credit. The letters of credit issued are subject to a fee equal to the interest rate on the Credit Facility. In addition, the Revolving Credit Facility is subject to an unused commitment fee of 0.20% to 0.25%, depending on the consolidated total debt to consolidated EBITDA ratio as defined by the Credit Agreement, payable quarterly to the lenders in respect of the unutilized commitments.

The Credit Agreement contains certain customary affirmative covenants and events of default. The negative covenants in the Credit Facility include, among other items, limitations on the ability, subject to negotiated exceptions, to incur additional indebtedness or issue additional preferred stock of the Company, to create or issue certain liens on certain assets, to enter into agreements related to mergers and acquisitions, including the sale of certain assets or disposition of assets, or declare, make or pay dividends and distributions. The Credit Agreement contains certain negative covenants for an indebtedness to consolidated EBITDA ratio, as defined by the Credit Agreement, and commencing with December 31, 2020 and all fiscal quarters thereafter through maturity. For the fiscal quarter ended June 30, 2024, and each fiscal quarter thereafter, the Company is required to maintain an indebtedness to consolidated EBITDA ratio of not more than 3.75 (the “Financial Covenant”), subject to customary equity cure rights. The Financial Covenant is subject to a 0.50 step-up in the event of a material permitted acquisition, which the Company can elect to implement up to two times during the life of the facility. If the Company is not in compliance with the covenants under the Credit Agreement or the Company otherwise experiences an event of default, the lenders would be entitled to take various actions, including acceleration of amounts due under the Credit Agreement. As of June 30, 2024, the Company was in compliance with all applicable covenants, including the Financial Covenant.

Consolidated EBITDA is defined in the Credit Agreement as net income/(loss) adjusted to exclude interest expense, other income/(loss), net, (provision for)/benefit from income taxes, depreciation and amortization and stock-based compensation expense. In addition, consolidated EBITDA also allows for other adjustments such as the exclusion of transaction costs, changes in deferred revenue and other costs that may be considered non-recurring.

Scheduled Principal Payments

The scheduled principal payments required under the terms of the Credit Facility are as follows:


Year Ending December 31,	Amount
Remainder of 2024	$	24,488
2025	522,422
Total	$	546,910

10.Income Taxes

For interim periods, the Company uses the estimated annual effective tax rate method under which the Company determines its (provision for)/benefit from income taxes based on the current estimate of its annual effective tax rate plus the tax effect of discrete items occurring during the period. The estimated annual effective tax rate is based on forecasted annual results which may fluctuate due to significant changes in the forecasted or actual results and any other transaction that results in differing tax treatment.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

For the three months ended June 30, 2024 and 2023, the Company recorded an income tax expense of $5,034 and $26,411, respectively, which resulted in an effective tax rate of (45.1)% and (87.8)%, respectively. For the six months ended June 30, 2024 and 2023, the Company recorded an income tax benefit of $15,742 and an income tax expense of $18,471, respectively, which resulted in an effective tax rate of (166.3)% and (81.6)%, respectively.

The Company’s estimated annual effective income tax rate for the three and six months ended June 30, 2024 differed from the statutory rate of 21% primarily due to the change in the valuation allowance for deferred tax assets related primarily to the capitalization of research and development expenditures as required by the 2017 Tax Cuts and Jobs Act, nondeductible executive compensation, unrecognized tax benefits, state and local income taxes, and nondeductible stock-based compensation, partially offset by research and development tax credits, windfall from stock-based compensation, deduction from foreign-derived intangible income, and the effect of foreign operations.

The Company’s estimated annual effective income tax rate for the three and six months ended June 30, 2023 differed from the statutory rate of 21% primarily due to the change in the valuation allowance for deferred tax assets related primarily to the capitalization of research and development expenditures, nondeductible executive compensation, unrecognized tax benefits, state and local income taxes, and global intangible low-taxes income, partially offset by research and development tax credits, deduction from foreign-derived intangible income, and the effect of foreign operations.

As of June 30, 2024, the Company considered a significant portion of the earnings of foreign subsidiaries to be not permanently reinvested outside the U.S. The incremental deferred federal and state income taxes or foreign withholding taxes were not material to the condensed consolidated financial statements as those respective earnings have previously been subject to U.S. taxation or will receive a dividend received deduction.

All unrecognized tax benefits have been recorded to other liabilities in the condensed consolidated balance sheets. As of June 30, 2024, unrecognized tax benefits approximated $13,237, all of which would affect the effective tax rate if recognized. As of June 30, 2023, the Company had unrecognized tax benefits of $12,928, of which $12,771 would affect the effective tax rate if recognized. Of the $12,928 of the unrecognized tax benefits as of June 30, 2023, $12,771 was recorded to other liabilities and the remaining balance was recorded as a reduction in the gross deferred tax assets, offset by a corresponding reduction in the valuation allowance. The Company does not believe that its unrecognized tax benefits as of June 30, 2024 will significantly increase or decrease within the next twelve months. The increase was primarily due to tax positions taken during the current and prior periods. The Company is unable to reasonably estimate the timing of long-term payments or the amount by which the liability will increase or decrease. The Company believes that its unrecognized tax benefits as of June 30, 2024 will decrease by approximately $533 within the next twelve months due to expiring statutes of limitation. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the Company's (provision for)/benefit from income taxes. Accrued interest and penalties were $1,487 and $497 as of June 30, 2024 and 2023, respectively, and were included in other liabilities in the condensed consolidated balance sheets.

The Company’s corporate federal income tax returns for the years ended December 31, 2020 through December 31, 2023 remain subject to examination by the Internal Revenue Service. The Company’s corporate income tax returns for the years ended December 31, 2020 through December 31, 2023 remain subject to examination by taxing authorities in various U.S. states and foreign jurisdictions. In addition, in the U.S., any net operating losses or credits that were generated in prior years but utilized in open years may also be subject to examination.

In December 2021, the OECD proposed the Pillar Two framework as part of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project which makes changes to existing tax laws, including a 15% global minimum tax (“BEPS Pillar Two”). Several countries have enacted tax legislation with proposals from the BEPS Pillar Two framework, with an effective date starting in 2024. While we continue to monitor further legislation and guidance in the non-US jurisdictions in which we operate, we have evaluated the impact of the published legislation and although not material to the condensed consolidated financial statements, we have included the impacts in the estimated annual effective tax rate for the three and six months ended June 30, 2024.

On December 15, 2022, the Ireland Finance Act 2022 was signed into Irish law. With the enactment of the Ireland Finance Act 2022, qualifying Ireland-related research and development tax credits do not depend on the generation of future taxable income. As a result, the Company determined these credits to be a credit to research and development expenses in the form of a government grant as analogized under International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance. The Company recognized Ireland-related research and development tax credits of $306 and $482 during the three and six months ended June 30, 2024, respectively, and $338 and $614 during the three and six months ended June 30, 2023, respectively, as a reduction to research and product development in the condensed consolidated statements of operations.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

11.Commitments and Contingencies

Indirect Taxes

The Company is subject to indirect taxation in some, but not all, of the various U.S. states and foreign jurisdictions in which it conducts business. Therefore, the Company has an obligation to charge, collect and remit Value Added Tax (“VAT”) or Goods and Services Tax (“GST”) in connection with certain foreign sales transactions and sales and use tax in connection with eligible sales to subscribers in certain U.S. states. On June 21, 2018, the U.S. Supreme Court overturned the physical presence nexus standard and held that states can require remote sellers to collect sales and use tax. In addition, U.S. states and foreign jurisdictions have and continue to enact laws which expand tax collection and remittance obligations that could apply to a platform like the Company's. This also includes the requirement for e-commerce platforms to collect and remit taxes on certain sales through a marketplace. As a result of these rulings, recently enacted laws, and the scope of the Company’s operations, taxing authorities continue to provide regulations that increase the complexity and risks to comply with such laws and could result in substantial liabilities, prospectively as well as retrospectively. In accordance with ASC 450, the Company establishes accruals for contingencies, including uncertainties related to taxes not based on income, when the Company believes it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Based on the information available, the Company continues to evaluate and assess the jurisdictions in which indirect tax nexus exists and believes that the indirect tax liabilities are adequate and reasonable. However, due to the complexity and uncertainty around the application of these rules by taxing authorities, results may vary materially from the Company’s expectations. The Company had an indirect tax liability of $22,931 and $38,174, including indirect tax contingencies of $13,943 and $29,836, as of June 30, 2024 and December 31, 2023, respectively, which is included in accrued liabilities in the condensed consolidated balance sheets. Additionally, the Company had an indirect tax liability of $16,980, including indirect tax contingencies of $16,318, as of June 30, 2024, which is included in liabilities of business held for sale in the condensed consolidated balance sheet. See “Note 4. Business Held for Sale” for further information on assets and liabilities classified as held for sale as of June 30, 2024.

Service Agreements

As of June 30, 2024, the Company had outstanding non-cancelable minimum commitments with terms in excess of one year related to service agreements, including services for third-party cloud-computing and payment processing services, as follows:


Year Ending December 31,	Amount
Remainder of 2024	$	11,186
2025	24,658
2026	28,567
2027	29,467
2028	4,508
Total	$	98,386

Certain Risks and Concentrations

The Company’s revenues were principally generated from software as a service customers establishing their online presence. The market is highly competitive and rapidly changing. Significant changes in this industry, technological advances or changes in customer buying behavior could adversely affect the Company’s future results of operations.

Other

The Company is subject to litigation and other claims that arise in the ordinary course of business. While the ultimate result of outstanding legal matters cannot presently be determined, the Company does not expect that the ultimate disposition will have a material adverse effect on its results of operations or financial condition. However, legal matters are inherently unpredictable and subject to significant uncertainties, some of which are beyond the Company’s control. Based on the Company’s current knowledge, the final outcome of any particular legal matter will not have a material adverse effect on the Company’s financial condition.

12.Leases

The Company has operating leases for its office space with lease terms through 2034. Certain lease agreements include options to extend and/or terminate the lease. The Company's lease agreements do not contain terms and conditions of material restrictions, covenants or residual value guarantees. Variable lease costs are comprised primarily of the Company's proportionate share of operating expenses and property taxes.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

On April 26, 2024, the Company remeasured the lease liability and right-of-use asset related to its leased office space in Dublin, Ireland due to a modification of the existing lease agreement that resulted in a partial termination of the lease. As a result, the associated operating lease liability and operating lease right-of-use asset were reduced by $2,304 and $2,102, respectively, in the condensed consolidated balance sheet as of June 30, 2024.

The components of operating lease expense, net recognized in the condensed consolidated statements of operations were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating lease costs
Operating lease costs	$	3,034	$	3,417	$	6,372	$	6,872
Variable lease costs	865		850		1,737		1,614
Short-term lease costs	55		67		108		142
Operating lease income
Sublease income	$	—	$	129	$	67	$	311
Total operating lease expense, net	$	3,954	$	4,205	$	8,150	$	8,317

As of June 30, 2024, maturities of operating lease liabilities were as follows:


Year Ending December 31,	Amount
Remainder of 2024	$	7,079
2025	14,448
2026	15,115
2027	14,518
2028	14,674
Thereafter	27,675
Total operating lease payments	93,509
Less: imputed interest	(10,385)
Total operating lease liabilities (1)	$	83,124

__________________

(1)Excludes $18,636 of operating lease liabilities which have been reclassified to liabilities of business held for sale in the condensed consolidated balance sheet as of June 30, 2024. See "Note 4. Business Held for Sale" for further information.

13.Stockholders’ Deficit

Class A Common Stock

Each holder of shares of Class A common stock shall be entitled to one vote for each share held. As of June 30, 2024, the number of authorized shares of Class A common stock, par value $0.0001 per share, by the Company was 1,000,000,000.

On May 10, 2022, the board of directors authorized a general share repurchase program of the Company’s Class A common stock of up to $200,000. On February 26, 2024, the board of directors authorized a new general share repurchase program of the Company’s Class A common stock of up to $500,000 with no fixed expiration (the "Stock Repurchase Plan") to replace the previous repurchase plan. These Class A common stock repurchases may occur in the open market, through privately negotiated transactions, through block purchases, other purchase techniques including the establishment of one or more plans under Rule 10b5-1 of the Securities Exchange Act of 1934 or by any combination of such methods. The timing and actual amount of shares repurchased will depend on a variety of different factors and may be modified, suspended or terminated at any time at the discretion of the board of directors.

During the three and six months ended June 30, 2024, the Company repurchased 153,582 and 474,375 shares and paid cash of $4,147 and $16,311, including commissions of $2 and $9, respectively, under the Stock Repurchase Plan through open market purchases. The weighted-average prices per share for the share repurchases were $36.53 and $34.36 during the three and six months ended June 30, 2024, respectively.

During the three months ended June 30, 2023, the Company did not repurchase shares under the Stock Repurchase Plan through open market purchases. During the six months ended June 30, 2023, the Company repurchased 1,256,170 shares and paid cash of $25,321, including commissions of $25, under the Stock Repurchase Plan through open market purchases. The weighted-average price per share for the share repurchase was $22.04.

As of June 30, 2024, approximately $483,689 remained available for stock repurchase pursuant to the Stock Repurchase Plan.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

Class B Common Stock

Each holder of shares of Class B common stock shall be entitled to ten votes for each share held.

Each outstanding share of the Company's Class B common stock is convertible into one share of Class A common stock at any time. As of June 30, 2024, the number of authorized shares of Class B common stock, par value $0.0001 per share, by the Company was 100,000,000.

Class C Common Stock

The Company's Class C common stock has no voting rights and is not convertible into shares of Class A common stock or Class B common stock.

As of June 30, 2024, the number of authorized shares of Class C common stock, par value $0.0001 per share, by the Company was 1,000,000,000. The board of directors has the authority, without stockholder approval except as required by the NYSE, to issue shares of the Company's Class C common stock.

Dividends

The Company shall not declare or pay dividends on Class A common stock, Class B common stock or Class C common stock unless the same dividend or distribution with the same record date and payment dated shall be declared or paid on all shares of Class A, Class B and Class C common stock.

During the three and six months ended June 30, 2024 and 2023, the Company did not declare or pay any dividends.

14.Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss activity for the three and six months ended June 30, 2024 and 2023 was as follows:


	Foreign Currency Translation Adjustments		Net Unrealized Losses on Marketable Securities		Total Accumulated Other Comprehensive Loss
Balance at December 31, 2023	$	(843)	$	—	$	(843)
Other comprehensive income/(loss) before reclassifications	44		(27)		17
Other comprehensive income/(loss)	44		(27)		17
Balance at March 31, 2024	$	(799)	$	(27)	$	(826)
Other comprehensive loss before reclassifications	(374)		(80)		(454)
Other comprehensive loss	(374)		(80)		(454)
Balance at June 30, 2024	$	(1,173)	$	(107)	$	(1,280)


	Foreign Currency Translation Adjustments		Net Unrealized (Losses)/Gains on Marketable Securities		Total Accumulated Other Comprehensive Loss
Balance at December 31, 2022	$	(1,449)	$	(216)	$	(1,665)
Other comprehensive income before reclassifications	258		216		474
Other comprehensive income	258		216		474
Balance at March 31, 2023	$	(1,191)	$	—	$	(1,191)
Other comprehensive loss before reclassifications	(296)		—		(296)
Other comprehensive loss	(296)		—		(296)
Balance at June 30, 2023	$	(1,487)	$	—	$	(1,487)

Amounts reclassified out of accumulated other comprehensive loss, net of taxes, during the three and six months ended June 30, 2024 and 2023 were not material.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

15.Stock-based Compensation

Stock Options

Squarespace, Inc. Amended and Restated 2008 Equity Incentive Plan

In January 2008, the Company established and approved the Squarespace, Inc. 2008 Equity Incentive Plan which was ratified in 2010 and was subsequently amended and restated in March 2016 (the “2008 Plan”). Under the 2008 Plan, which covers certain employees and consultants, the Company granted shares of its Class B common stock in the form of stock options. After November 17, 2017, there were no additional grants from the 2008 Plan.

A summary of the Company’s stock option activity for the 2008 Plan during the six months ended June 30, 2024 is as follows:


	Number of Options	Weighted- Average Exercise Price
As of December 31, 2023	1,117,616	$	2.56
Exercised	(1,030,422)	2.51
Expired	(1)	1.82
As of June 30, 2024	87,193	$	3.13
Vested at June 30, 2024	87,193	$	3.13
Exercisable at June 30, 2024	87,193	$	3.13

Restricted Stock Units ("RSUs") and Performance Stock Units ("PSUs")

Squarespace, Inc. 2017 Equity Incentive Plan

On November 17, 2017, the Company’s board of directors approved the Squarespace, Inc. 2017 Equity Incentive Plan (the “2017 Plan”). Under the 2017 Plan, the Company may grant shares of its Class A common stock in the form of RSUs, PSUs, stock options, stock appreciation rights and other stock awards. RSUs are subject to continuous service, generally vest over four years and are measured based on the fair market value of the underlying Class A common stock on the date of grant. After April 15, 2021, no additional grants were issued from the 2017 Plan.

Squarespace, Inc. 2021 Equity Incentive Plan

On March 25, 2021, the Company’s board of directors adopted the Squarespace, Inc. 2021 Equity Incentive Plan (the “2021 Plan”) which was approved by the stockholders on May 3, 2021 and went into effect on May 9, 2021. Under the 2021 Plan, the Company may grant shares of its Class A common stock in the form of RSUs, PSUs, stock options, stock appreciation rights and other stock awards. RSUs and PSUs are measured based on the closing price of the Company's Class A common stock as reported on the date of grant. RSUs are subject to continuous service and generally vest over four years. PSUs are subject to continuous service and generally vest over three years based on the achievement of certain performance targets over a one-year performance cycle. The percentage of PSUs that will vest can range from 0% to 200% of the target number of shares granted based on the performance targets that are achieved. The Company begins recognizing stock-based compensation costs when the achievement of a performance target becomes probable. Quarterly, the Company reassesses the probability of each possible outcome and, if applicable, recognizes a cumulative adjustment for any changes to the previously determined expectation using the grant date fair value of the PSU award. The Company recognizes stock-based compensation expense for PSUs ratably, net of forfeitures, over the requisite service period, which is the vesting period.

During the six months ended June 30, 2024, the Company granted 349,417 shares of Class A common stock in the form of PSUs under the 2021 Plan. Additionally, the granted activity below includes 111,738 PSUs awarded for the achievement of performance targets as of December 31, 2023 which were approved by the Company’s board of directors during the six months ended June 30, 2024.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

A summary of the Company’s RSU and PSU activity during the six months ended June 30, 2024, is as follows:


	Number of Share Units	Weighted Average Grant Date Fair Value Per Share Unit
Outstanding – December 31, 2023	10,025,607	$28.31
Granted	4,832,302	32.57
Vested	(2,599,225)	28.61
Forfeited	(733,200)	29.91
Outstanding – June 30, 2024	11,525,484	$29.92

In connection with the vesting of shares, the Company reacquired 300,446 shares for $13,262 and 1,069,635 shares for $37,284 during the three and six months ended June 30, 2024, respectively, in order to satisfy employee tax withholding obligations. The employees received the net number of shares after consideration to those reacquired. The reacquired shares subsequently became available again for issuance under the Plan.

Casalena Performance Award

On April 15, 2021 (“Grant Date”), the board of directors of the Company approved an RSU grant to Anthony Casalena, CEO, of 2,750,000 Class A common shares (the “Casalena Performance Award”). The Casalena Performance Award vesting is contingent on both service- and market-based vesting conditions. The Company estimated the fair value of the Casalena Performance Award using a Monte Carlo simulation with a weighted-average grant date fair value of $30.38 per Class A common share. The Company will recognize the fair value of the award as stock-based compensation expense using the accelerated attribution method over the longer of (i) the period of time the market condition for each tranche is expected to be met (i.e., the derived service period) or (ii) the service vesting condition of four years. The Company recorded compensation expense of $1,776 and $3,551 during the three and six months ended June 30, 2024, respectively, and $4,869 and $9,685 during the three and six months ended June 30, 2023, respectively, related to the Casalena Performance Award in general and administrative expenses in the condensed consolidated statements of operations.

Stock-based Compensation

The classification of stock-based compensation by line item in the condensed consolidated statements of operations was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	2,026	$	1,549	$	3,795	$	2,601
Research and product development	19,025		15,650		34,675		26,337
Marketing and sales	3,590		3,045		6,801		4,916
General and administrative	8,157		9,235		15,694		17,751
Total stock-based compensation	$	32,798	$	29,479	$	60,965	$	51,605

The amount above excludes $593 and $1,404 of stock-based compensation capitalized as property and equipment, net, for the three and six months ended June 30, 2024, respectively, and $1,169 and $1,638 for the three and six months ended June 30, 2023, respectively.

16.Related Party Transactions

On September 1, 2014, the Company entered into an agreement with Getty Images to resell certain content to the Company’s customers. A member of the Company’s board of directors is a Co-Founder and board member of Getty Images. Amounts recorded in connection with this agreement were not material for the three and six months ended June 30, 2024 and 2023.

On May 13, 2024, in connection with the Merger Agreement, the Company entered into support agreements with the Company's Chief Executive Officer, Anthony Casalena, and certain other affiliates of the Company, affiliates of General Atlantic and affiliates of Accel (together, the "Affiliated Buyer Parties"). As of June 30, 2024, there are no amounts recorded in the condensed consolidated financial statements for transactions between the Company and the Affiliated Buyer Parties. See "Note 1. Description of Business" for further information on the Proposed Merger.

Table of Contents

SQUARESPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(unaudited)

17.Net Income per Share

The following table sets forth the computation of basic and diluted net income per share:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net income	$	6,133	$	3,660	$	6,277	$	4,162
Denominator:
Weighted-average shares used in computing net income per share, basic	137,760,693		135,302,409		137,348,777		135,111,072
Effect of dilutive securities	4,382,325		3,469,204		4,070,744		2,902,382
Weighted-average shares used in computing net income per share, diluted	142,143,018		138,771,613		141,419,521		138,013,454
Net income per share, basic	$	0.04	$	0.03	$	0.05	$	0.03
Net income per share, diluted	$	0.04	$	0.03	$	0.04	$	0.03

The following weighted-average outstanding shares of potentially dilutive securities were excluded from the computation of diluted net income per share for the periods presented because including them would have been antidilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Stock options	—	—	—	—
RSUs and PSUs	164,135	683,691	227,044	1,109,292
Total	164,135	683,691	227,044	1,109,292

Table of Contents

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and the related notes and the other financial information included elsewhere in this Quarterly Report and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended December 31, 2023 included in the Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 28, 2024. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual business, financial condition and results of operations could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly under “Part II. Other Information, Item 1A. Risk Factors.” Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview

Squarespace enables anyone to stand out and succeed online, providing customers in over 200 countries and territories with the tools they need for an online presence with best-in-class design and a consistent brand across domains, websites, marketing and social media. Our commerce solutions include tools for selling digital content, classes, appointments, reservations, physical goods and more.

We primarily derive revenue from annual and monthly subscriptions to our presence and commerce solutions. Subscription revenue accounted for 93.2% and 93.1% of our total revenue for the three and six months ended June 30, 2024, respectively, and 92.1% and 92.0% of our total revenue for the three and six months ended June 30, 2023, respectively. Payments for our subscription plans are generally collected at the beginning of the subscription period and we generally recognize the associated revenue ratably over the term of the customer contract. Non-subscription revenue primarily consists of commerce transaction fees received through revenue sharing arrangements with payment processors that handle our customers’ commerce transactions, payment processing fees received in exchange for use of our hospitality services as well as revenue we generate from third-party services we offer that provide additional functionality to our customers.

We generated revenue of $296.8 million and $577.9 million for the three and six months ended June 30, 2024, respectively, and net income of $6.1 and $6.3 million for the three and six months ended June 30, 2024, respectively. We generated revenue of $247.5 million and $484.6 million for the three and six months ended June 30, 2023, respectively, and net income of $3.7 million and $4.2 million for the three and six months ended June 30, 2023, respectively. We believe our business model is driven by stable retention of our existing customers as well as the acquisition of new customers, including additional offerings and add-on subscriptions which allow our customers to grow and scale with our platform as their needs evolve. No individual unique subscription accounted for more than 1% of our total bookings for the three and six months ended June 30, 2024 and 2023.

On September 7, 2023, we closed an asset purchase agreement with Google LLC ("Google") to acquire, among other things, Google's domain assets, including all domain names for which Google is the registrar or reseller, for a total amount paid of $180.7 million (the "Google Domains Asset Acquisition"). Unique subscriptions and average revenue per unique subscription ("ARPUS") do not account for single domain subscriptions originally sold by Google as a part of the Google Domains Asset Acquisition (collectively, the "Acquired Domain Assets").

Proposed Merger

On May 13, 2024, we entered into a definitive agreement to go private with an affiliate of Permira, a global investment firm, in an all-cash transaction valued at approximately $6.9 billion on an enterprise value basis (the "Proposed Merger"). Under the terms of this agreement, our stockholders will receive $44.00 per share of the Company's common stock, other than shares owned by the Company and certain affiliates of Anthony Casalena, affiliates of General Atlantic and affiliates of Accel. The proposed transaction is expected to close by the fourth quarter of 2024 and is subject to customary closing conditions.

See “Part I. Financial Information, Item 1. Financial Statements (Unaudited), Note 1. Description of Business” for further information on the Proposed Merger. The foregoing description of this agreement and the transactions contemplated thereby is not and does not purport to be complete, and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, which is attached as Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on May 13, 2024 and incorporated by reference herein.

Table of Contents

Key Factors Affecting Our Performance

Retention of existing and acquisition of new unique subscriptions

Retaining and acquiring unique subscriptions to our platform is the primary driver of our revenue growth. The number of unique subscriptions on our platform, excluding the Acquired Domain Assets, was 5.2 million as of June 30, 2024, representing an increase of 20.7% from the same period in 2023. In order to support the acquisition of new unique subscriptions, we intend to continue to invest in our marketing efforts and expand internationally. We view this spending as a long-term investment in our business to attract new unique subscriptions.

Expansion of our commerce offerings

We believe that our commerce offerings significantly expand our addressable market. Our comprehensive commerce offerings enable our customers to sell anything online, attracting a differentiated set of commerce-oriented brands to our platform.

We continue to invest in our commerce offerings to deepen and expand functionality. Our commerce revenue was $81.4 million and $161.7 million for the three and six months ended June 30, 2024, representing an increase of 7.9% and 9.2% from the same period in 2023, respectively.

GPV represents the total dollar value of orders processed through our platform in the period, net of refunds and fraudulent orders. Our platform processed approximately $1,589.1 million and $3,238.5 million of GPV during the three and six months ended June 30, 2024, representing an increase of 4.2% and 5.9% from the same period in 2023, respectively.

Investments in product innovation

We rely on hiring and retaining a talented product development workforce. The success of our customers relies on the innovation tied to this workforce and our ability to remain agile to address customer needs. Our research and product development expenses were $69.8 million and $136.7 million for the three and six months ended June 30, 2024, representing an increase of 13.7% and 13.9% from the same period in 2023, respectively.

Foreign currency fluctuations

As of June 30, 2024, we had customers in over 200 countries and territories and our international customers represented approximately 30% of our total bookings. As foreign currency exchange rates change, translation of the statements of operations of our international businesses into U.S. dollars may affect year-over-year comparability of our results of operations.

Key Components of Results of Operations

Revenue

We primarily derive revenue from annual and monthly subscriptions. Historically, annual and monthly subscriptions typically represented 75% and 25% of total subscriptions, respectively. As of June 30, 2024, annual and monthly subscriptions represented approximately 90% and 10% of total subscriptions, respectively. The shift in our subscriptions is primarily due to increased annual domain subscriptions related to the Acquired Domain Assets. Revenue is also derived from non-subscription services, including fixed percentages or fixed-fees earned on revenue share arrangements with third-parties and on sales made through our customers’ sites. In addition, we earn fixed-fees on sales through certain hospitality offerings and payment processing fees in exchange for use of our hospitality services. Payments received for subscriptions in advance of fulfillment of our performance obligations are recorded as deferred revenue. Subscription plans automatically renew unless advance notice is provided to us. We primarily recognize subscription revenue ratably on a straight-line basis, net of a reserve for refunds. Transaction fee revenue, payment processing revenue and revenue generated from third-parties is recognized at a point in time, when the sale has been completed.

We disaggregate our revenue by product type in accordance with the following definitions:

Presence revenue

Presence revenue primarily consists of fixed-fee subscriptions to our plans that offer core platform functionalities, currently branded “Personal” and “Business” plans in our offerings. Presence revenue also consists of fixed-fee subscriptions related to additional entry points for starting online such as domain managed services. Additionally, presence revenue is derived from third-party solutions related to email services and access to third-party content to enhance online presence. For customers in need of a larger scale solution, we have an enterprise offering where revenue is recognized over the life of the contract.

Table of Contents

Commerce revenue

Commerce revenue primarily consists of fixed-fee subscriptions to our plans that offer all the features of presence plans as well as additional features that support end to end commerce transactions, currently branded “Basic” and “Advanced” in our plan offerings. Commerce revenue also includes fixed-fee subscriptions to a number of other tools that support running an online business such as marketing, memberships, courses, scheduling and hospitality tools. Non-subscription revenue is derived from fixed-fees earned on revenue share arrangements with commerce partners as well as fixed transaction fees earned on GPV processed through our native payment processing solution, Business plan sites and certain hospitality offerings. Commerce revenue also includes payment processing fees received in exchange for use of our hospitality services.

Cost of revenue

Cost of revenue primarily consists of domain name registration fees, customer support employee related expenses, credit card and payment processing fees, web hosting costs, amortization of acquisition-related intangible assets associated with acquired technology and capitalized software development costs, as well as allocated shared costs. Employee-related expenses consist of salaries, taxes, benefits and stock-based compensation.

Operating expenses:

Research and product development

Research and product development expenses are primarily employee-related expenses, costs associated with continuously developing new solutions and enhancing and maintaining our technology platform as well as allocated shared costs. These costs are expensed as incurred. Employee-related expenses consist of salaries, taxes, benefits and stock-based compensation. We capitalize employee-related expenses relating to software development costs incurred in connection with adding functionality to our platform, as well as internal-use projects during the application development stage.

Marketing and sales

Marketing and sales expenses include costs related to advertisements used to drive customer acquisition, employee-related expenses, amortization of acquisition-related intangible assets associated with acquired customer relationships, customer acquisition and creative assets, affiliate fees on customer referrals and allocated shared costs. Employee-related expenses consist of salaries, sales commissions, taxes, benefits and stock-based compensation. Allocated shared costs include customer support costs related to assistance provided by our customer service team to customers during their trial periods on our platform. Depending on the nature of the advertising, costs are expensed at the time a commercial initially airs, when a promotion first appears in the media or as incurred. Affiliate fees on customer referrals are deferred and recognized ratably over the expected period of our relationship with the new customer. Sales commissions paid to internal sales personnel relating to obtaining customer contracts are capitalized and amortized ratably over the expected life of the new customer.

General and administrative

General and administrative expenses are primarily employee-related expenses, which consist of salaries, taxes, benefits and stock-based compensation associated with supporting business operations. General and administrative expenses also include software and subscription services, external accounting and legal professional service fees, indirect taxes, as well as insurance. The functional elements included in general and administrative are finance, people, legal, information technology and overall corporate support.

Interest expense

Interest expense primarily consists of the interest expense related to our debt facilities. For further discussion on our interest expense related to our debt facilities, see "Liquidity and Capital Resources, Indebtedness.”

Other income, net

Other income, net is primarily comprised of net investment income and realized and unrealized foreign currency gains and losses. See “Item 3. Quantitative and Qualitative Disclosures About Market Risk, Foreign Currency Exchange Risk.”

(Provision for)/benefit from income taxes

The Company accounts for income taxes under the asset and liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The Company

Table of Contents

recognizes deferred tax assets to the extent it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. A valuation allowance is provided if it is determined that it is more likely than not that the deferred tax asset will not be realized.

The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax positions will be sustained on examination by the tax authority. The tax benefits recognized in the financial statements from such positions are measured based on the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company recognizes interest and penalties, where appropriate, related to unrecognized tax benefits in income tax expense.

Effective December 1, 2018, the Company became subject to a U.S. tax requirement that certain income earned by foreign subsidiaries, referred to as Global Intangible Low-Taxed Income (“GILTI”), must be included in the gross income of the subsidiary’s U.S. shareholder. Accounting principles generally accepted in the U.S. provide for an accounting policy election of either recognizing deferred taxes for temporary differences expected to reverse as GILTI in future years or recognizing such taxes as a current period expense when incurred. The Company elected to treat GILTI as a current period expense when incurred.

Results of operations

The following table sets forth our condensed consolidated statements of operations information for the three and six months ended June 30, 2024 and 2023.


	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue	$	296,769	$	247,529	$	577,917	$	484,557
Cost of revenue (1)	82,939		43,167		163,713		86,117
Gross profit	213,830		204,362		414,204		398,440
Operating expenses:
Research and product development (1)	69,805		61,412		136,651		119,982
Marketing and sales (1)	88,282		75,373		205,815		177,045
General and administrative (1)	38,873		30,909		69,696		63,249
Total operating expenses	196,960		167,694		412,162		360,276
Operating income	16,870		36,668		2,042		38,164
Interest expense	(10,157)		(8,635)		(20,538)		(16,729)
Other income, net	4,454		2,038		9,031		1,198
Income/(loss) before (provision for)/benefit from income taxes	11,167		30,071		(9,465)		22,633
(Provision for)/benefit from income taxes	(5,034)		(26,411)		15,742		(18,471)
Net income	$	6,133	$	3,660	$	6,277	$	4,162

__________________

(1)Includes stock-based compensation as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Cost of revenue	$	2,026	$	1,549	$	3,795	$	2,601
Research and product development	19,025		15,650		34,675		26,337
Marketing and sales	3,590		3,045		6,801		4,916
General and administrative	8,157		9,235		15,694		17,751
Total stock-based compensation	$	32,798	$	29,479	$	60,965	$	51,605

Table of Contents

The following table sets forth our condensed consolidated statements of operations information as a percentage of total revenue for the three and six months ended June 30, 2024 and 2023.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenue	27.9	%	17.4	%	28.3	%	17.8	%
Gross profit	72.1	%	82.6	%	71.7	%	82.2	%
Operating expenses:
Research and product development	23.5	%	24.8	%	23.6	%	24.8	%
Marketing and sales	29.7	%	30.5	%	35.6	%	36.5	%
General and administrative	13.1	%	12.5	%	12.1	%	13.1	%
Total operating expenses	66.3	%	67.8	%	71.3	%	74.4	%
Operating income	5.8	%	14.8	%	0.4	%	7.8	%
Interest expense	(3.4)	%	(3.5)	%	(3.6)	%	(3.5)	%
Other income, net	1.5	%	0.8	%	1.6	%	0.2	%
Income/(loss) before (provision for)/benefit from income taxes	3.9	%	12.1	%	(1.6)	%	4.5	%
(Provision for)/benefit from income taxes	(1.7)	%	(10.7)	%	2.7	%	(3.8)	%
Net income	2.2	%	1.4	%	1.1	%	0.7	%

The following table sets forth our condensed consolidated revenue by geographic location and our condensed consolidated revenue by geographic location as a percentage of total revenue for the three and six months ended June 30, 2024 and 2023.


	Three Months Ended June 30,						Change				Six Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%		2024			2023			Amount		%
	(Unaudited)			(Unaudited)							(Unaudited)			(Unaudited)
United States	$	212,424		$	177,195		$	35,229	19.9	%	$	413,459		$	346,949		$	66,510	19.2	%
International	84,345			70,334			14,011		19.9	%	164,458			137,608			26,850		19.5	%
Total revenue	$	296,769		$	247,529		$	49,240	19.9	%	$	577,917		$	484,557		$	93,360	19.3	%
Percentage of total revenue:
United States	71.6		%	71.6		%					71.5		%	71.6		%
International	28.4		%	28.4		%					28.5		%	28.4		%
Total revenue	100		%	100		%					100		%	100		%

Comparison of the Three Months Ended June 30, 2024 and 2023

Revenue


	Three Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Presence	$	215,373		$	172,074		$	43,299	25.2	%
Commerce	81,396			75,455			5,941		7.9	%
Total revenue	$	296,769		$	247,529		$	49,240	19.9	%
Percentage of total revenue:
Presence	72.6		%	69.5		%
Commerce	27.4		%	30.5		%
Total revenue	100		%	100		%

Presence revenue

Presence revenue increased $43.3 million, or 25.2%, for the three months ended June 30, 2024 compared to the same period in 2023. This increase was primarily the result of the growth of our unique subscriptions, which contributed $23.2 million, or 53.6%, driven by retention of existing subscriptions and continued acquisition of new subscriptions across our

Table of Contents

presence offerings. As described above, unique subscriptions do not account for the Acquired Domain Assets, which contributed additional growth of $19.0 million, or 43.8%.

Commerce revenue

Commerce revenue increased $5.9 million, or 7.9%, for the three months ended June 30, 2024 compared to the same period in 2023. This increase was primarily the result of the growth of our unique subscriptions, which contributed approximately $4.7 million, or 77.6%, driven by retention of existing subscriptions and continued acquisition of new subscriptions across our commerce offerings, including subscriptions for our scheduling tools. Additionally, price increases across our commerce subscription plans contributed approximately $1.0 million, or 16.1%.

Cost of revenue and gross profit


	Three Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Cost of revenue	$	82,939		$	43,167		$	39,772	92.1	%
Gross profit	$	213,830		$	204,362		$	9,468	4.6	%
Percentage of total revenue:
Cost of revenue	27.9		%	17.4		%
Gross profit	72.1		%	82.6		%

Cost of revenue

Cost of revenue increased $39.8 million, or 92.1%, for the three months ended June 30, 2024 compared to the same period in 2023. The increase was primarily due to increases in domain name registration fees of $33.8 million, primarily attributed to domain subscriptions associated with the Google Domains Asset Acquisition. Additionally, this increase was partially due to increases in web hosting costs of $2.3 million, payroll and associated benefit expenses for customer support of $1.8 million and payment processing fees of $1.4 million, as a result of our growing subscription base.

Gross profit

Gross profit increased $9.5 million, or 4.6%, for the three months ended June 30, 2024 compared to the same period in 2023, primarily due to the growth of our unique subscriptions, partially offset by increases in domain name registration fees primarily attributed to domain subscriptions associated with the Google Domains Asset Acquisition.

Gross profit as a percentage of revenue was 72.1% for the three months ended June 30, 2024 compared to 82.6% for the same period in 2023, primarily attributed to domain subscriptions associated with the Google Domains Asset Acquisition, all of which have not completed an annual renewal period on our platform as of June 30, 2024. Generally, we recognize revenue for our domain subscription ratably over a period of twelve months and we recognize the cost of registering domains upon purchase or renewal. This has resulted in a decline in gross profit as a percentage of revenue during the three months ended June 30, 2024 compared to the same period in 2023, which was prior to the Google Domains Asset Acquisition.

Operating expenses:

Research and product development


	Three Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Research and product development	$	69,805		$	61,412		$	8,393	13.7	%
Percentage of total revenue	23.5		%	24.8		%

Research and product development expenses increased $8.4 million, or 13.7%, for the three months ended June 30, 2024 compared to the same period in 2023. The increase was primarily due to increases in payroll and associated benefit expenses of $4.3 million and a decrease in capitalized internally developed software costs of $2.5 million in support of our product development. Additionally, during the three months ended June 30, 2024, the Company recognized $0.5 million of expenses related to a transition services agreement between the Company and Google as part of the Google Domains Asset Acquisition.

Table of Contents

Marketing and sales


	Three Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Marketing and sales	$	88,282		$	75,373		$	12,909	17.1	%
Percentage of total revenue	29.7		%	30.5		%

Marketing and sales expenses increased $12.9 million, or 17.1%, for the three months ended June 30, 2024 compared to the same period in 2023, primarily due to increased amortization expense of $10.6 million related to finite-lived intangible assets acquired as part of the Google Domains Asset Acquisition and increases in payroll and associated benefit expenses of $1.7 million.

General and administrative


	Three Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
General and administrative	$	38,873		$	30,909		$	7,964	25.8	%
Percentage of total revenue	13.1		%	12.5		%

General and administrative expenses increased $8.0 million, or 25.8%, for the three months ended June 30, 2024 compared to the same period in 2023, primarily due to legal and advisory fees of $6.7 million, including $4.2 million associated with the Proposed Merger. Additionally, during the three months ended June 30, 2024, there were increases in payroll and associated benefit expenses of $0.7 million.

Interest expense


	Three Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Interest expense	$	(10,157)		$	(8,635)		$	1,522	17.6	%
Percentage of total revenue	(3.4)		%	(3.5)		%

Interest expense increased $1.5 million, or 17.6%, for the three months ended June 30, 2024 compared to the same period in 2023, primarily due to an increase in our total debt outstanding as a result of additional term loan commitments received during the third quarter of the year ended December 31, 2023.

Other income, net


	Three Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Other income, net	$	4,454		$	2,038		$	2,416	118.5	%
Percentage of total revenue	1.5		%	0.8		%

Other income, net increased $2.4 million for the three months ended June 30, 2024 compared to the same period in 2023. The increase is primarily due to increased interest income of $1.6 million due to increased cash equivalents and investment in marketable securities balances compared to the same period in 2023, as well as increased net transaction gains of $0.6 million due to favorable foreign exchange rates.

Provision for income taxes


	Three Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount			%
	(Unaudited)			(Unaudited)
Income before provision for income taxes	$	11,167		$	30,071		$	(18,904)		(62.9)	%
Provision for income taxes	$	(5,034)		$	(26,411)		$	21,377
Effective tax rate	(45.1)		%	(87.8)		%	42.7		%

The provision for income taxes decreased for the three months ended June 30, 2024 compared to the same period in 2023, primarily driven by an increase related to the change in the valuation allowance for deferred tax assets related

Table of Contents

primarily to the capitalization of research and development expenditures as required by the 2017 Tax Cuts and Jobs Act and windfall on stock-based compensation.

Comparison of the Six Months Ended June 30, 2024 and 2023

Revenue


	Six Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Presence	$	416,257		$	336,465		$	79,792	23.7	%
Commerce	161,660			148,092			13,568		9.2	%
Total revenue	$	577,917		$	484,557		$	93,360	19.3	%
Percentage of total revenue:
Presence	72.0		%	69.4		%
Commerce	28.0		%	30.6		%
Total revenue	100		%	100		%

Presence revenue

Presence revenue increased $79.8 million, or 23.7%, for the six months ended June 30, 2024 compared to the same period in 2023. This increase was primarily the result of the growth of our unique subscriptions, which contributed $43.5 million, or 54.6%, driven by retention of existing subscriptions and continued acquisition of new subscriptions across our presence offerings. As described above, unique subscriptions do not account for the Acquired Domain Assets, which contributed additional growth of $30.5 million, or 38.2%.

Commerce revenue

Commerce revenue increased $13.6 million, or 9.2%, for the six months ended June 30, 2024 compared to the same period in 2023. This increase was primarily the result of the growth of our unique subscriptions, which contributed approximately $10.5 million, or 77.1%, driven by retention of existing subscriptions and continued acquisition of new subscriptions across our commerce offerings, including subscriptions for our scheduling and marketing tools. Additionally, price increases across our commerce subscription plans contributed approximately $2.2 million, or 16.1%.

Cost of revenue and gross profit


	Six Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Cost of revenue	$	163,713		$	86,117		$	77,596	90.1	%
Gross profit	$	414,204		$	398,440		$	15,764	4.0	%
Percentage of total revenue:
Cost of revenue	28.3		%	17.8		%
Gross profit	71.7		%	82.2		%

Cost of revenue

Cost of revenue increased $77.6 million, or 90.1%, for the six months ended June 30, 2024 compared to the same period in 2023. The increase was primarily due to increases in domain name registration fees of $65.1 million, primarily attributed to domain subscriptions associated with the Google Domains Asset Acquisition. Additionally, this increase was partially due to increases in web hosting costs of $4.6 million, payroll and associated benefit expenses for customer support of $4.0 million and payment processing fees of $2.5 million, as a result of our growing subscription base.

Gross profit

Gross profit increased $15.8 million, or 4.0%, for the six months ended June 30, 2024 compared to the same period in 2023, primarily due to the growth of our unique subscriptions, partially offset by increases in domain name registration fees primarily attributed to domain subscriptions associated with the Google Domains Asset Acquisition.

Gross profit as a percentage of revenue was 71.7% for the six months ended June 30, 2024 compared to 82.2% for the same period in 2023, primarily attributed to domain subscriptions associated with the Google Domains Asset Acquisition, all of which have not completed an annual renewal period on our platform as of June 30, 2024. Generally, we recognize revenue for our domain subscription ratably over a period of twelve months and we recognize the cost of registering domains upon purchase or renewal. This resulted in a decline in gross profit as a percentage of revenue during

Table of Contents

the six months ended June 30, 2024 compared to the same period in 2023, which was prior to the Google Domains Asset Acquisition.

Operating expenses:

Research and product development


	Six Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Research and product development	$	136,651		$	119,982		$	16,669	13.9	%
Percentage of total revenue	23.6		%	24.8		%

Research and product development expenses increased $16.7 million, or 13.9%, for the six months ended June 30, 2024 compared to the same period in 2023. The increase was primarily due to increases in payroll and associated benefit expenses of $11.7 million and a decrease in capitalized internally developed software costs of $1.8 million in support of our product development. Additionally, during the six months ended June 30, 2024, the Company recognized $1.6 million of expenses related to a transition services agreement between the Company and Google as part of the Google Domains Asset Acquisition.

Marketing and sales


	Six Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Marketing and sales	$	205,815		$	177,045		$	28,770	16.3	%
Percentage of total revenue	35.6		%	36.5		%

Marketing and sales expenses increased $28.8 million, or 16.3%, for the six months ended June 30, 2024 compared to the same period in 2023, primarily due to increased amortization expense of $21.7 million related to finite-lived intangible assets acquired as part of the Google Domains Asset Acquisition, advertising expenses of $5.8 million, mainly related to increased direct response channels, and payroll and associated benefit expenses of $1.1 million.

General and administrative


	Six Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
General and administrative	$	69,696		$	63,249		$	6,447	10.2	%
Percentage of total revenue	12.1		%	13.1		%

General and administrative expenses increased $6.4 million, or 10.2%, for the six months ended June 30, 2024 compared to the same period in 2023, primarily due to legal and advisory fees of $7.0 million, including $4.2 million associated with the Proposed Merger. These were partially offset by a decrease to indirect tax expenses of $1.2 million.

Interest expense


	Six Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Interest expense	$	(20,538)		$	(16,729)		$	3,809	22.8	%
Percentage of total revenue	(3.6)		%	(3.5)		%

Interest expense increased $3.8 million, or 22.8%, for the six months ended June 30, 2024 compared to the same period in 2023, primarily due to an increase in our total debt outstanding as a result of additional term loan commitments received during the third quarter of the year ended December 31, 2023.

Table of Contents

Other income, net


	Six Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount		%
	(Unaudited)			(Unaudited)
Other income, net	$	9,031		$	1,198		$	7,833	653.8	%
Percentage of total revenue	1.6		%	0.2		%

Other income, net increased $7.8 million for the six months ended June 30, 2024 compared to the same period in 2023. The increase is primarily due to increased net transaction gains of $3.9 million due to favorable foreign exchange rates, as well as increased interest income of $3.6 million due to increased cash equivalents and investment in marketable securities balances compared to the same period in 2023.

Benefit from/(provision for) income taxes


	Six Months Ended June 30,						Change
($ in thousands, except percentages)	2024			2023			Amount			%
	(Unaudited)			(Unaudited)
(Loss)/income before benefit from/(provision for) income taxes	$	(9,465)		$	22,633		$	(32,098)		(141.8)	%
Benefit from/(provision for) income taxes	$	15,742		$	(18,471)		$	34,213
Effective tax rate	(166.3)		%	(81.6)		%	(84.7)		%

The benefit from/(provision for) income taxes decreased for the six months ended June 30, 2024 compared to the same period in 2023, primarily driven by the change in the valuation allowance for deferred tax assets related primarily to the capitalization of research and development expenditures as required by the 2017 Tax Cuts and Jobs Act and windfall on stock-based compensation. In addition, the provision for income taxes decreased due to a pre-tax loss in the current year as compared to pre-tax income in the prior year.

Table of Contents

Quarterly Results of Operations

The following tables set forth selected unaudited quarterly statements of operations data for each of the eight fiscal quarters ended June 30, 2024, as well as the percentage of revenues that each line item represents for each quarter. The information for each of these quarters has been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") on the same basis as our audited historical consolidated financial information and includes, in the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the results of operations for these periods. This data should be read in conjunction with our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. These quarterly results are not necessarily indicative of our results of operations to be expected for any future period.


	Three Months Ended (Unaudited)
($ in thousands)	June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
Revenue	$	296,769	$	281,148	$	270,718	$	257,061	$	247,529	$	237,028	$	228,812	$	217,696
Cost of revenue (1)	82,939		80,774		69,650		51,753		43,167		42,950		40,106		38,907
Gross profit	213,830		200,374		201,068		205,308		204,362		194,078		188,706		178,789
Operating expenses:
Research and product development (1)	69,805		66,846		61,715		60,491		61,412		58,570		56,828		54,312
Marketing and sales (1)	88,282		117,533		91,513		81,016		75,373		101,672		66,154		74,248
General and administrative (1)	38,873		30,823		29,922		36,155		30,909		32,340		37,942		38,507
Impairment charge	—		—		—		—		—		—		225,163		—
Total operating expenses	196,960		215,202		183,150		177,662		167,694		192,582		386,087		167,067
Operating income/(loss)	16,870		(14,828)		17,918		27,646		36,668		1,496		(197,381)		11,722
Interest expense	(10,157)		(10,381)		(10,718)		(9,321)		(8,635)		(8,094)		(7,230)		(5,209)
Other income/(loss), net	4,454		4,577		(4,163)		6,327		2,038		(840)		(9,567)		6,869
Income/(loss) before (provisions for)/benefit from income taxes	11,167		(20,632)		3,037		24,652		30,071		(7,438)		(214,178)		13,382
(Provision for)/benefit from income taxes	(5,034)		20,776		2,219		(41,151)		(26,411)		7,940		(19,784)		(3,277)
Net income/(loss)	$	6,133	$	144	$	5,256	$	(16,499)	$	3,660	$	502	$	(233,962)	$	10,105

Net income/(loss) per share, basic and diluted	$	0.04	$	0.00	$	0.04	$	(0.12)	$	0.03	$	0.00	$	(1.72)	$	0.07
Weighted-average shares used in computing net income/(loss) per share, basic	137,760,693		136,936,860		136,153,002		135,736,599		135,302,409		134,917,610		136,340,283		137,832,634
Weighted-average shares used in computing net income/(loss) per share, diluted	142,143,018		140,447,379		139,387,350		135,736,599		138,771,613		137,182,268		136,340,283		139,667,719

__________________

(1)Includes stock-based compensation as follows:


	Three Months Ended (Unaudited)
($ in thousands)	June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
Cost of revenue	$	2,026	$	1,769	$	1,451	$	1,484	$	1,549	$	1,052	$	944	$	1,000
Research and product development	19,025		15,650		13,868		14,601		15,650		10,687		11,099		9,462
Marketing and sales	3,590		3,211		2,921		3,019		3,045		1,871		2,450		2,252
General and administrative	8,157		7,537		9,587		9,213		9,235		8,516		12,989		11,380
Total stock-based compensation	$	32,798	$	28,167	$	27,827	$	28,317	$	29,479	$	22,126	$	27,482	$	24,094

Table of Contents

The following table sets forth our condensed consolidated statements of operations information as a percentage of total revenue for the three month periods indicated below.


	Three Months Ended (Unaudited)
($ in thousands)	June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
Revenue	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenue	27.9	%	28.7	%	25.7	%	20.1	%	17.4	%	18.1	%	17.5	%	17.9	%
Gross profit	72.1	%	71.3	%	74.3	%	79.9	%	82.6	%	81.9	%	82.5	%	82.1	%
Operating expenses:
Research and product development	23.5	%	23.8	%	22.8	%	23.5	%	24.8	%	24.7	%	24.8	%	24.9	%
Marketing and sales	29.7	%	41.8	%	33.8	%	31.5	%	30.5	%	42.9	%	28.9	%	34.1	%
General and administrative	13.1	%	11.0	%	11.1	%	14.1	%	12.5	%	13.6	%	16.6	%	17.7	%
Impairment charge	—	%	—	%	—	%	—	%	—	%	—	%	98.4	%	—	%
Total operating expenses	66.3	%	76.6	%	67.7	%	69.1	%	67.8	%	81.2	%	168.7	%	76.7	%
Operating income/(loss)	5.8	%	(5.3)	%	6.6	%	10.8	%	14.8	%	0.7	%	(86.2)	%	5.4	%
Interest expense	(3.4)	%	(3.7)	%	(4.0)	%	(3.6)	%	(3.5)	%	(3.4)	%	(3.2)	%	(2.4)	%
Other income/(loss), net	1.5	%	1.6	%	(1.5)	%	2.5	%	0.8	%	(0.4)	%	(4.2)	%	3.2	%
Income/(loss) before (provisions for)/benefit from income taxes	3.9	%	(7.4)	%	1.1	%	9.7	%	12.1	%	(3.1)	%	(93.6)	%	6.2	%
(Provision for)/benefit from income taxes	(1.7)	%	7.4	%	0.8	%	(16.0)	%	(10.7)	%	3.3	%	(8.6)	%	(1.5)	%
Net income/(loss)	2.2	%	—	%	1.9	%	(6.3)	%	1.4	%	0.2	%	(102.2)	%	4.7	%

Quarterly Trends

Our business is impacted by seasonal fluctuations. We typically register a greater number of new unique subscriptions during the first quarter of a year. We believe this is related to, among other things, our customers’ buying habits and our increased marketing and sales spend in the first quarter of most years. In the future, seasonal trends may cause fluctuations in our quarterly results, which may impact the predictability of our business and results of operations.

Liquidity and Capital Resources

To date, we have primarily financed our operations through cash flows from operations.

As of June 30, 2024, we had cash and cash equivalents and investment in marketable securities of $322.4 million, excluding cash and cash equivalents of $2.8 which has been reclassified to assets of business held for sale in the condensed consolidated balance sheet, and $17.7 million of available borrowing capacity under our Revolving Credit Facility, as defined below. Our principal commitments consist of payments for our Credit Facility, operating leases and purchase commitments related to cloud-computing services. See “Part I. Financial Information, Item 1. Financial Statements (Unaudited), Note 8. Debt” for further information on our Credit Facility.

We believe our existing cash and cash equivalents will be sufficient to meet our operating working capital and capital expenditure requirements over the next 12 months. Our future financing requirements will depend on many factors, including our growth rate, subscription renewal activity, the timing and extent of spending to support development of our platform and products, the expansion of marketing and sales activities and any future investments or acquisitions we may make. See “Part II. Other Information, Item 1A. Risk Factors.”

The following table summarizes our operating, investing and financing activities for the six months ended June 30, 2024 and 2023.


	Six Months Ended June 30,
($ in thousands)	2024		2023
Net cash provided by/(used in):
Operating activities	$	145,848	$	116,702
Investing activities	$	(57,930)	$	24,673
Financing activities	$	(75,854)	$	(65,884)

Net cash provided by operating activities

Net cash provided by operating activities for the six months ended June 30, 2024 was $145.8 million, which reflected our net income of $6.3 million increased by non-cash items primarily consisting of $61.0 million of stock-based compensation, $36.9 million of depreciation and amortization, and $0.6 million of other non-cash operating activities, partially offset by $1.8 million of non-cash lease income.

The changes in operating assets and liabilities included in net cash provided by operating activities were $69.0 million in deferred revenue, primarily reflective of the growth in our unique subscriptions and $29.8 million in accounts payable and accrued liabilities, primarily related to increased expenses for resold third-party software solutions and the

Table of Contents

timing of certain vendor payments. Net cash provided by operating activities was offset by net cash outflows of $35.5 million in prepaid expenses and other current assets, primarily related to increased prepaid income taxes driven by adjustments to our tax provision partially offset by decreased prepaid operating expenses, $15.7 million in accounts receivables and due from vendors, primarily related to the increase our unique subscriptions and the timing of cash collections, $4.9 million in funds payable to customers, primarily related to decreased reservations on our hospitality platform.

Net cash provided by operating activities for the six months ended June 30, 2023 was $116.7 million, which reflected our net income of $4.2 million increased by non-cash items primarily consisting of $51.6 million of stock-based compensation, and $14.5 million of depreciation and amortization, partially offset by $1.0 million of non-cash lease income.

The changes in operating assets and liabilities included in net cash provided by operating activities were $38.0 million in deferred revenue, primarily reflective of the growth in our unique subscriptions and price increases across several of our subscription plans, $9.8 million of accounts payable and accrued liabilities, primarily reflective of changes in the timing of payments, including product payments, and decreased marketing spend, $2.4 million in accounts receivable and due from vendors, primarily related to the timing of cash collections, and $0.4 million in other operating assets and liabilities, primarily related to increased income tax liabilities, partially offset by increased prepaid referral fees. Net cash provided by operating activities was offset by net cash outflows of $1.5 million in prepaid expenses and other current assets, primarily related to increased prepaid income taxes, partially offset by decreased prepaid marketing expenses, and $2.1 million in funds payable to customers, primarily related to decreased reservations on our hospitality platform.

Net cash (used in)/provided by investing activities

Net cash used in investing activities for the six months ended June 30, 2024 was $57.9 million, which reflected $52.9 million used to purchase marketable securities, offset by $1.0 million in proceeds from the sale and maturities of marketable securities, and $6.1 million spent in connection with the purchase of property and equipment, including $5.0 million of capitalized software development costs in support of our product development.

Net cash provided by investing activities for the six months ended June 30, 2023 was $24.7 million, which reflected $39.7 million in proceeds from the sale and maturities of marketable securities, offset by $7.8 million used to purchase marketable securities and $7.2 million spent in connection with the purchase of property and equipment, including $5.4 million of capitalized software development costs in support of our product development.

Net cash used in financing activities

Net cash used in financing activities for the six months ended June 30, 2024 was $75.9 million, which reflected $37.6 million in payments for taxes related to net share settlement of equity awards, $24.5 million in principal term loan payments, and $16.3 million in payments for repurchase and retirement of Class A common stock. Net cash used in financing activities was offset by $2.6 million in proceeds from exercise of stock options.

Net cash used in financing activities for the six months ended June 30, 2023 was $65.9 million, which reflected $25.3 million in payments for repurchase and retirement of Class A common stock, $20.4 million in principal term loan payments, and $20.3 million in payments for taxes related to net share settlement of equity awards. Net cash used in financing activities was offset by $0.1 million in proceeds from exercises of stock options.

Indebtedness

On December 12, 2019, we entered into a credit agreement with various financial institutions that provided for a $350.0 million term loan (the “2019 Term Loan”) and a $25.0 million revolving credit facility (the “Revolving Credit Facility”), which included a $15.0 million letter of credit sub-facility. On December 11, 2020, we amended the credit agreement (as amended, the “2020 Credit Agreement”) to increase the size of the 2019 Term Loan to $550.0 million (as amended, the “2020 Term Loan”) and extend the maturity date for the 2019 Term Loan and the Revolving Credit Facility to December 11, 2025. On June 15, 2023, we amended the 2020 Credit Agreement (as amended, the “Credit Agreement”) to increase the total size of the 2020 Term Loan to $650.0 million (the “Term Loan”) upon the closing of the Google Domains Asset Acquisition and, effective June 30, 2023, replaced LIBOR as the benchmark rate with SOFR.

The borrowings under the 2019 Term Loan were used to provide for the repurchase, and subsequent retirement, of outstanding capital stock. The borrowings under the 2020 Term Loan were used to provide for a dividend on all outstanding capital stock. The additional borrowings of $100.0 million under the Term Loan were used to partially fund the Google Domains Asset Acquisition, together with cash on hand.

Borrowings under the 2020 Credit Agreement were subject to an interest rate equal to, at our option, LIBOR or the bank's alternative base rate (the "ABR"), in either case, plus an applicable margin prior to June 30, 2023. Effective June 30, 2023, under the Credit Agreement, LIBOR as the benchmark rate was replaced with SOFR. The ABR is the greater of the prime rate, the federal funds effective rate plus the applicable margin or the SOFR quoted rate plus the applicable margin. The applicable margin is based on an indebtedness to consolidated EBITDA ratio as prescribed under the Credit Agreement

Table of Contents

and ranges from 1.25% to 2.25% on applicable SOFR loans and 0.25% to 1.25% on ABR loans. In addition, the Revolving Credit Facility is subject to an unused commitment fee, payable quarterly, of 0.20% to 0.25% of the unutilized commitments (subject to reduction in certain circumstances). Consolidated EBITDA is defined in the Credit Agreement and is not comparable to our definition of adjusted EBITDA used elsewhere in the Quarterly Report on Form 10-Q since the Credit Agreement allows for additional adjustments to net income/(loss) including the exclusion of transaction costs, changes in deferred revenue and other costs that may be considered non-recurring. Further, consolidated EBITDA, as defined in the Credit Agreement, may be different from similarly titled EBITDA financial measures used by other companies. The definition of consolidated EBITDA is contained in Section 1.1 of the Credit Agreement.

As of June 30, 2024, $546.9 million was outstanding under the Term Loan. The Term Loan requires scheduled quarterly principal payments in aggregate annual amounts equal to 7.50% for 2023 and 2024, and 10.00% for 2025, in each case, on the Term Loan principal amount, with the balance due at maturity. In addition, the Credit Agreement includes certain customary prepayment requirements for the Term Loan, which are triggered by events such as asset sales, incurrence of indebtedness and sale leasebacks.

As of June 30, 2024, $7.3 million was outstanding under the Revolving Credit Facility in the form of outstanding letters of credit and $17.7 million remained available for borrowing by us. The outstanding letters of credit relate to security deposits for certain of our leased locations.

The Credit Agreement contains certain customary affirmative covenants and events of default. The negative covenants in the Credit Agreement include, among others, limitations on our ability (subject to negotiated exceptions) to incur additional indebtedness or issue additional preferred stock, incur liens on assets, enter into agreements related to mergers and acquisitions, dispose of assets or pay dividends and distributions. The Credit Agreement contains certain negative covenants for an indebtedness to consolidated EBITDA ratio, as defined by the Credit Agreement, and commencing with December 31, 2020 and all fiscal quarters thereafter through maturity. For the fiscal quarter ended June 30, 2024, and each fiscal quarter thereafter, the Company is required to maintain an indebtedness to consolidated EBITDA ratio of not more than 3.75 (the “Financial Covenant”), subject to customary equity cure rights. The Financial Covenant is subject to a 0.50 step-up in the event of a material permitted acquisition, which we can elect to implement up to two times during the life of the facility. As of June 30, 2024, we have not elected to implement this set-up as a result of any of our acquisitions. If we are not in compliance with the covenants under the Credit Agreement or we otherwise experience an event of default, the lenders would be entitled to take various actions, including acceleration of amounts due under the Credit Agreement. As of June 30, 2024, we were in compliance with all applicable covenants, including the Financial Covenant.

The obligations under the Credit Agreement are guaranteed by our wholly-owned domestic subsidiaries and are secured by substantially all of the assets of the guarantors, subject to certain exceptions.

Total interest expense related to our indebtedness was $10.1 million and $20.5 million for the three and six months ended June 30, 2024, respectively, and $8.6 million and $16.7 million for the three and six months ended June 30, 2023, respectively.

Stock Repurchase Plan

On May 10, 2022, the board of directors authorized a general share repurchase program of the Company’s Class A common stock of up to $200.0 million. On February 26, 2024, the board of directors authorized a new general share repurchase program of the Company's Class A common stock of up to $500.0 million with no fixed expiration (the "Stock Repurchase Plan") to replace the previous repurchase plan. During the three and six months ended June 30, 2024, the Company repurchased 0.2 million and 0.5 million shares and paid cash of $4.1 million and $16.3 million, under the Stock Repurchase Plan through open market purchases. The weighted-average price per share for the share repurchases was $36.53 and $34.36 during the three and six months ended June 30, 2024. As of June 30, 2024, approximately $483.7 million remained available for stock repurchase pursuant to the Stock Repurchase Plan.

Table of Contents

Key Performance Indicators ("KPIs") and Non-GAAP Financial Measures

We review the following KPIs and non-GAAP financial measures to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. Increases or decreases in our KPIs and non-GAAP financial measures may not correspond with increases or decreases in our revenue and our KPIs and non-GAAP financial measures may be calculated in a manner different from similar KPIs and non-GAAP financial measures used by other companies. We may, on occasion, revise our KPIs or non-GAAP financial measures to better align with the business, its operations, industry standards, or other considerations.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Unique subscriptions (in thousands) (1)	5,195		4,305		5,195		4,305
Total bookings (in thousands)	$	319,774	$	256,137	$	645,720	$	521,926
ARRR (in thousands) (2)	$	1,179,456	$	983,265	$	1,179,456	$	983,265
ARPUS (1)	$	225.45	$	219.42	$	225.45	$	219.42
Adjusted EBITDA (in thousands)	$	72,079	$	73,383	$	104,090	$	104,246
Unlevered free cash flow (in thousands)	$	65,420	$	54,765	$	154,742	$	121,861
GPV (in thousands) (3)	$	1,589,076	$	1,525,476	$	3,238,533	$	3,059,534

______________

(1)Unique subscriptions and average revenue per unique subscription (“ARPUS”) do not account for single domain subscriptions originally sold by Google as a part of the Google Domains Asset Acquisition.

(2)Annual run rate revenue ("ARRR") for the three and six months ended June 30, 2023 has been recast to conform to the current period definition. Previously, ARRR was calculated using monthly revenue from subscription fees and revenue generated in conjunction with associated fees in the last month of the period multiplied by 12. We have since revised our calculation to use quarterly revenue from subscription fees and revenue generated in conjunction with associated fees in the last quarter of the period multiplied by 4 to normalize results for the run rate each quarter.

(3)"Gross payment volume" or "GPV" was previously presented as "Gross merchandise value" or "GMV" in prior period disclosures. There were no revisions to the calculation of GPV as a result of this nomenclature change.

Unique subscriptions. Unique subscriptions represent the number of unique sites, standalone scheduling subscriptions, Unfold (social) subscriptions and hospitality subscriptions, as of the end of a period. A unique site represents a single subscription and/or group of related subscriptions, including a website subscription and/or a domain subscription, and other subscriptions related to a single website or domain. Every unique site contains at least one domain subscription or one website subscription. For instance, an active website subscription, a custom domain subscription and a Google Workspace subscription that represent services for a single website would count as one unique site, as all of these subscriptions work together and are in service of a single entity’s online presence. Unique subscriptions do not account for one-time purchases in Unfold or hospitality services or for the Acquired Domain Assets. The total number of unique subscriptions is a key indicator of the scale of our business and is a critical factor in our ability to increase our revenue base.

Unique subscriptions increased 0.9 million, or 20.7%, as of June 30, 2024 compared to the same period in 2023, primarily as a result of acquisition strength in new domain and website subscriptions and stable retention of existing subscriptions.

Total bookings. Total bookings includes cash receipts for all subscriptions purchased, as well as payments due under the terms of contractual agreements for obligations to be fulfilled. In the case of multi-year contracts, total bookings only includes one year of committed revenue. Total bookings provides insight into the sales of our solutions and the performance of our business because, for a large portion of our business, we collect payment at the time of sale and recognize revenue ratably over the term of our subscription agreements.

Total bookings increased $63.6 million, or 24.8%, for the three months ended June 30, 2024 compared to the same period in 2023 and increased $123.8 million, or 23.7%, for the six months ended June 30, 2024 compared to the same period in 2023. These increases were primarily a result of the increase in our unique subscriptions as well as the impact of the Acquired Domain Assets.

Annual run rate revenue (“ARRR”). We calculate ARRR as the quarterly revenue from subscription fees and revenue generated in conjunction with associated fees (fees taken or assessed in conjunction with commerce transactions) in the last quarter of the period multiplied by 4. We believe that ARRR is a key indicator of our future revenue potential. However, ARRR should be viewed independently of revenue, and does not represent our GAAP revenue on an annualized basis, as it is an operating metric that can be impacted by subscription start and end dates and renewal rates. ARRR is not intended to be a replacement or forecast of revenue.

ARRR increased $196.2 million, or 20.0%, as of June 30, 2024 compared to the same period in 2023 primarily as a result of the increase in our unique subscriptions, the impact of the Acquired Domain Assets, and price increases across several of our subscription plans.

Table of Contents

Average revenue per unique subscription. We calculate ARPUS as the total revenue during the preceding 12-month period divided by the average of the number of total unique subscriptions at the beginning and end of the period. We believe ARPUS is a useful metric in evaluating our ability to increase prices, sell higher-value plans and add-on subscriptions.

ARPUS increased $6.03, or 2.7%, as of June 30, 2024 compared to the same period in 2023 primarily as a result of price increases across several of our subscription plans and increased attachment rates for certain commerce offerings, including our marketing and scheduling tools.

Adjusted EBITDA. Adjusted EBITDA is a supplemental performance measure that our management uses to assess our operating performance. We calculate adjusted EBITDA as net income/(loss) excluding interest expense, other (income)/loss, net, provision for/(benefit from) income taxes, depreciation and amortization, stock-based compensation expense and other items that we do not consider indicative of our ongoing operating performance. The following is a reconciliation of adjusted EBITDA to the most comparable GAAP measure, net income:


	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	2024		2023		2024		2023
Net income	$	6,133	$	3,660	$	6,277	$	4,162
Interest expense	10,157		8,635		20,538		16,729
Provision for/(benefit from) income taxes	5,034		26,411		(15,742)		18,471
Depreciation and amortization	18,213		7,236		36,885		14,477
Stock-based compensation expense	32,798		29,479		60,965		51,605
Other income, net	(4,454)		(2,038)		(9,031)		(1,198)
Proposed merger costs	4,198		—		4,198		—
Adjusted EBITDA	$	72,079	$	73,383	$	104,090	$	104,246

Adjusted EBITDA decreased $1.3 million, or 1.8%, for the three months ended June 30, 2024 compared to the same period in 2023 and decreased $0.2 million, or 0.1%, for the six months ended June 30, 2024 compared to the same period in 2023. These decreases were primarily due to increases in cost of revenue, driven by domain name registration fees, and increases in operating expenses. The decreases were partially offset by increases in revenue.

Unlevered free cash flow. Unlevered free cash flow is a supplemental liquidity measure that our management uses to evaluate our core operating business and our ability to meet our current and future financing and investing needs. We define unlevered free cash flow as cash flow from operating activities less cash paid for capital expenditures increased by cash paid for interest expense net of the associated tax benefit. The following is a reconciliation of unlevered free cash flow to the most comparable GAAP measure, cash flows from operating activities:


	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	2024		2023		2024		2023
Cash flows from operating activities	$	60,629	$	52,547	$	145,848	$	116,702
Cash paid for capital expenditures	(2,689)		(4,092)		(6,074)		(7,167)
Free cash flow	57,940		48,455		139,774		109,535
Cash paid for interest, net of the associated tax benefit	7,480		6,310		14,968		12,326
Unlevered free cash flow	$	65,420	$	54,765	$	154,742	$	121,861

Unlevered free cash flow increased $10.7 million, or 19.5%, for the three months ended June 30, 2024 compared to the same period in 2023 primarily driven by the increase in bookings, partially offset by increased cash outlays for domain name registration fees and income taxes, net of refunds. Unlevered free cash flow increased $32.9 million, or 27.0%, for the six months ended June 30, 2024 compared to the same period in 2023 primarily driven by the increase in bookings, partially offset by increased cash outlays for domain name registration fees, payroll expenses, and income taxes, net of refunds.

Gross Payment Volume. GPV represents the value of physical goods and services, including content, time sold, hospitality and events, net of refunds, on our platform over a given period of time.

GPV processed on our platform increased $63.6 million, or 4.2%, for the three months ended June 30, 2024 compared to the same period in 2023 and increased $179.0 million, or 5.9%, for the six months ended June 30, 2024 compared to the same period in 2023. These increases were primarily due to GPV from our scheduling product as well as increased commerce transactions occurring on our customers' websites.

Table of Contents

Critical Accounting Policies and Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements. Management's estimates are based on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates.

Our critical accounting policies are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023. Our critical accounting policies have not significantly changed during the six months ended June 30, 2024. See "Part I. Financial Information, Item 1. Financial Statements (Unaudited), Note 2. Summary of Significant Accounting Policies" elsewhere in this Quarterly Report on Form 10-Q for more information.

Recently Issued Accounting Standards

A discussion of recent accounting pronouncements is included in "Part I. Financial Information, Item 1. Financial Statements (Unaudited), Note 2. Summary of Significant Accounting Policies" to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Foreign currency exchange risk

While we generate the majority of our revenue in U.S. dollars, a portion of our revenue is denominated in Euros. For the three and six months ended June 30, 2024, 71.6% and 71.5% of our revenue was denominated in U.S. dollars, and 71.6% for the same periods in 2023, respectively. For the three and six months ended June 30, 2024, 28.4% and 28.5% of our revenue was denominated in Euros, and 28.4% for the same periods in 2023, respectively. As a result, changes in foreign currency exchange rates can have an impact on our results of operations. Transaction gains/(losses) were $1.1 million and $2.6 million for the three and six months ended June 30, 2024, respectively, and $0.5 million and $(1.3) million for the three and six months ended June 30, 2023, respectively, and are included in other income, net in the condensed consolidated statements of operations. As we expand globally, we will be further exposed to fluctuations in currency exchange rates.

The assets and liabilities of our international subsidiaries are denominated in the local currencies of the countries in which they operate. Accordingly, assets and liabilities of our subsidiaries are translated into U.S. dollars at exchange rates in effect on the applicable balance sheet date. Income and expense items are translated at average exchange rates for the applicable period. Foreign currency translation adjustments are included in accumulated other comprehensive loss in the condensed consolidated balance sheets.

We currently do not hedge foreign currency exposure. We may in the future hedge our foreign currency exposure and may use currency forward contracts, currency options or other common derivative financial instruments to reduce foreign currency risk. It is difficult to predict the effect that future hedging activities would have on our results of operations.

Interest rate sensitivity

We had cash equivalents and marketable securities totaling $266.5 million as of June 30, 2024. Our cash equivalents are held for working capital purposes and investments in marketable securities are made for capital preservation purposes. We do not enter into investments for trading or speculative purposes. Our cash equivalents and marketable securities are subject to market risk due to changes in interest rates. Fixed rate securities may have their market value adversely affected due to a rise in interest rates. Our future investment income may fall short of our expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates.

Borrowings under the Credit Agreement are subject to an interest rate equal to, at our option, SOFR or ABR, in either case, plus an applicable margin. Based on the outstanding balance of the Credit Agreement as of June 30, 2024, for every 100 basis point increase in SOFR or ABR, we would incur approximately $5.5 million of additional annual interest expense. We currently do not hedge interest rate exposure. We may in the future hedge our interest rate exposure and may use swaps, caps, collars, structured collars or other common derivative financial instruments to reduce interest rate risk. It is difficult to predict the effect that future hedging activities would have on our results of operations.

Credit risk

We maintain components of our cash and cash equivalents balance in various accounts, which from time to time exceed the federal depository insurance coverage limit. In addition, substantially all of our cash and cash equivalents, as well as our marketable securities, are held by four financial institutions that we believe are of high credit quality. We have not experienced any losses on our deposits of cash and cash equivalents and accounts are monitored by our management

Table of Contents

team to mitigate risk. We are exposed to credit risk in the event of default by the financial institution holding our cash and cash equivalents or an event of default by the issuers of any corporate bonds and commercial paper we hold.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures”, as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, in the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2024, the end of the period covered by the Quarterly Report on Form 10-Q. Based on the evaluation of our disclosure controls and procedures our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were operating effectively and our management has concluded that our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are fairly stated in all material respects in accordance with U.S. GAAP.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act that occurred during the period covered by the Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives. However, in designing and evaluating the disclosure controls and procedures, our management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, in our Company have been detected.

Table of Contents

Part II - Other Information

Item 1. Legal Proceedings

From time to time, we may be involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, financial condition and results of operations.

Item 1A. Risk Factors

RISK FACTORS

A description of the risks and uncertainties associated with our business is set forth below. You should consider carefully the risks and uncertainties described below, together with the financial and other information contained in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our unaudited condensed consolidated financial statements and related notes. If any of the following risks or uncertainties actually occur, our business, financial condition and results of operations could be materially and adversely affected. In that case, the market price of our Class A common stock could decline and you may lose all or a part of your investment. The risks discussed below are not the only risks we face. Additional risks or uncertainties not currently known to us, or that we currently deem immaterial, may also have a material adverse effect on our business, financial condition and results of operations.

Risk Factor Summary

We are providing the following summary of the risk factors contained in this Quarterly Report on Form 10-Q to enhance the readability and accessibility of our risk factor disclosures. We encourage you to carefully review the full risk factors contained in this Quarterly Report on Form 10-Q in their entirety for additional information regarding the material factors that make an investment in our securities speculative or risky. These risks and uncertainties include, but are not limited to, the following:

•Failure to consummate the Proposed Merger may have a material adverse effect on our business, results of operations and financial condition and negatively impact our stock price.

•Our business, financial condition and results of operations will be harmed if we are unable to attract and retain customers and expand their use of our platform.

•If we fail to improve and enhance the functionality, performance, reliability, design, security and scalability of our solutions in a manner that responds to our customers’ evolving needs, our business, financial condition and results of operations may be adversely affected.

•Our industry is highly competitive and we may not be able to compete successfully against current and future competitors.

•The Squarespace brand is integral to our success. If we fail to protect or promote our brand, our business, financial condition and results of operations may be harmed.

•Our business, financial condition and results of operations would be adversely affected if our marketing and selling activities fail to generate new customers at the levels that we anticipate or fail to generate new customers on a cost-effective basis.

•We may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions.

•We depend on highly skilled personnel, and if we are unable to hire, integrate and retain our personnel, we may not be able to address competitive challenges.

•We rely heavily on the reliability, security and performance of our software. If our software contains serious errors or defects, or we have difficulty maintaining the software, we may lose revenue and market acceptance and may incur costs to defend or settle claims with our customers.

•Our business, financial condition and results of operations would be harmed if changes to technologies used in our platform or new versions or upgrades of operating systems and internet browsers adversely impact the process by which customers interface with our platform and users interface with our customers’ sites.

•We are subject to privacy and data protection laws and regulations as well as contractual privacy and data protection obligations. Our failure to comply with these or any future laws, regulations or obligations could subject us to sanctions and damages and could harm our reputation, business, financial condition and results of operations.

Table of Contents

•Our business is susceptible to risks associated with international sales and the use of our platform in various countries as well as our ability to localize our platform in such countries.

•The trading price of our Class A common stock may be volatile and could decline significantly and rapidly regardless of our operating performance.

•The multi-class structure of our common stock has the effect of concentrating voting control with those stockholders who hold our Class B common stock, including our Founder and Chief Executive Officer limiting your ability to influence corporate matters.

Risks Related to the Proposed Merger

On May 13, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Spaceship Purchaser, Inc., a Delaware corporation (“Parent”), and Spaceship Group MergerCo, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”, and together with Parent, the “Buyer Parties”), providing for the merger of Merger Sub with and into the Company, with the Company surviving such Merger as a wholly owned subsidiary of Parent (the “Merger”). Under the terms of the Merger Agreement, the Company’s stockholders will receive $44.00 per share, other than shares owned by the Company and certain shares owned by affiliates of Anthony Casalena, affiliates of General Atlantic and affiliates of Accel. The Merger is expected to close by the fourth quarter of 2024 and is subject to customary closing conditions. See Description of Business – Proposed Merger, appearing in this Quarterly Report on Form 10-Q for further information.

The Merger Agreement was unanimously approved by our Board of Directors. The description of the Merger Agreement in these Risk Factors is not and does not purport to be complete and is subject to, and qualified in its entirety by reference to, the Merger Agreement, which is attached as Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on May 13, 2024 and incorporated by reference herein.

We may fail to consummate the Merger, and uncertainties related to the consummation of the Merger may have a material adverse effect on our business, results of operations and financial condition and negatively impact the trading price of our Class A common stock.

The Merger is subject to the satisfaction of a number of conditions beyond our control, including receiving the requisite stockholder approvals and other customary closing conditions. Failure to satisfy the conditions to the Merger could prevent or delay the completion of the Merger. Further, regulators may impose conditions, obligations or restrictions on the Merger that may have the effect of delaying or preventing its completion. If the Merger does not close, we may suffer other consequences that could adversely affect our business, financial condition, operating results, and stock price, and our stockholders would be exposed to additional risks, including, but not limited to:

•to the extent that the current trading price of our Class A common stock reflects an assumption that the Merger will be completed, the trading price of our Class A common stock could decrease if the Merger is not completed;

•investor confidence in us could decline, stockholder litigation could be brought against us, relationships with existing and prospective customers, service providers, investors, lenders and other business partners may be adversely impacted, we may be unable to retain key personnel, and our operating results may be adversely impacted due to costs incurred in connection with the Merger;

•we have incurred, and will continue to incur, significant expenses for professional services in connection with the Merger for which we will have received little or no benefit if the Merger is not consummated;

•any disruptions to our business resulting from the announcement and pendency of the Merger, including adverse changes in our relationships with customers, suppliers, partners and employees, may continue or intensify in the event the Merger is not consummated or is significantly delayed; and

•the requirement that we pay a termination fee to Parent under certain circumstances.

In addition, the efforts and costs to satisfy the closing conditions of the Merger may place a significant burden on management and internal resources, and the Merger and related transactions, whether or not consummated, may result in a diversion of management’s attention from day-to-day operations. Any significant diversion of management’s attention away from ongoing business and difficulties encountered in the Merger process could have a material adverse effect on our business, results of operations and financial condition.

There also is no assurance that the Merger and the other transactions contemplated by the Merger Agreement will occur on the terms and timeline currently contemplated or at all.

If the proposed Merger is delayed or not completed, the trading price of our Class A common stock may decline, including to the extent that the current trading price of our Class A common stock reflects an assumption that the Merger and the other transactions contemplated by the Merger Agreement will be consummated without further delays, which could have a material adverse effect on our business, results of operations and financial condition. If the Merger Agreement

Table of Contents

is terminated and we determine to seek another business combination, we may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger.

If the Merger Agreement is terminated, we may, under certain circumstances, be obligated to pay a termination fee to Parent. These costs could require us to use available cash that would have otherwise been available for other uses.

If the Merger is not completed, in certain circumstances, we could be required to pay a termination fee to Parent of up to $198.7 million. If the Merger Agreement is terminated, the termination fee we may be required to pay, if any, under the Merger Agreement may require us to use available cash that would have otherwise been available for general corporate purposes or other uses. For these and other reasons, termination of the Merger Agreement could materially and adversely affect our business, results of operations or financial condition, which in turn would materially and adversely affect the trading price of our Class A common stock.

We are subject to various uncertainties while the Merger is pending, which could have a material adverse effect on our business, results of operations and financial condition.

Uncertainty about the pendency of the Merger and the effect of the Merger on employees, customers and other third parties who deal with us may have a material adverse effect on our business, results of operations and financial condition. These uncertainties may impair our ability to attract, retain and motivate key personnel pending the consummation of the Merger, as such personnel may experience uncertainty about their future roles following the consummation of the Merger. Additionally, these uncertainties could cause customers and other third parties who deal with us to seek to change existing business relationships with us or fail to extend an existing relationship with us, all of which could have a material adverse effect on our business, results of operations, financial condition and trading price of our Class A common stock.

While the Merger Agreement is in effect, we are subject to certain interim covenants.

The Merger Agreement generally requires us to operate our business in the ordinary course, subject to certain exceptions, including as required by applicable law, pending consummation of the Merger, and subjects us to customary interim operating covenants that restrict us from taking certain specified actions until the Merger is completed or the Merger Agreement is terminated in accordance with its terms. These restrictions could prevent us from pursuing certain business opportunities that may arise prior to the consummation of the Merger and may affect our ability to execute our business strategies and attain financial and other goals and may impact our financial condition, results of operations and cash flows.

The Merger Agreement limits our ability to pursue alternatives to the Merger and may discourage other companies from trying to acquire us for greater consideration than what Parent has agreed to pay pursuant to the Merger Agreement.

The Merger Agreement contains provisions that make it more difficult for us to sell our business to a party other than Parent. Under the Merger Agreement, beginning on May 13, 2024 we became subject to customary “no-shop” restrictions on our ability to solicit alternative acquisition proposals from third parties and to provide information to, and participate in discussions and engage in negotiations with, third parties regarding any alternative acquisition proposals, subject to a customary “fiduciary out” provision. These restrictions, including the added expense of the termination fees that may become payable by us in certain circumstances, might discourage a third party that has an interest in acquiring all or a significant part of the Company from considering or proposing that acquisition.

We and our directors and officers may be subject to lawsuits relating to the Merger.

Litigation is very common in connection with the sale of public companies, regardless of whether the claims have any merit. One of the conditions to consummating the Merger is that no order preventing the consummation of the Merger shall have been issued by any court. Consequently, if any such lawsuit challenging the Merger is successful in obtaining an order preventing the consummation of the Merger, that order may delay or prevent the Merger from being completed. While we will evaluate and defend against any lawsuits, the time and costs of defending against litigation relating to the Merger may adversely affect our business.

We will continue to incur substantial transaction-related costs in connection with the Merger.

We have incurred significant legal, advisory and financial services fees in connection with Merger. We have incurred, and expect to continue to incur, additional costs in connection with the satisfaction of the various conditions to closing of the Merger, including seeking approval from our stockholders and from applicable regulatory agencies. If there is any delay in the consummation of the Merger, these costs could increase significantly.

If the Merger is consummated, our stockholders, other than affiliates of Anthony Casalena, affiliates of General Atlantic and affiliates of Accel, will not be able to participate in any further upside to our business.

If the Merger is consummated, our stockholders will receive $44.00 in cash per share of common stock owned by them without interest and subject to applicable tax withholding, other than shares owned by the Company and certain shares owned by affiliates of Anthony Casalena, affiliates of General Atlantic and affiliates of Accel, and other than affiliates of Anthony Casalena, affiliates of General Atlantic and affiliates of Accel, our stockholders will not receive any equity interests of Parent. As a result, if our business following the Merger performs well, our current stockholders will not

Table of Contents

receive any additional consideration for their shares of common stock and, other than affiliates of Anthony Casalena, affiliates of General Atlantic and affiliates of Accel, will not receive any benefit from any future performance of our business following the Merger.

Risks Related to our Business and Industry

Our business, financial condition and results of operations will be harmed if we are unable to attract and retain customers and expand their use of our platform.

We have experienced growth in recent years, due in large part to sustained subscription growth and retention, including customers who expand their use of our platform over time. We offer two payment options for most of our subscription plans: annual and monthly. Customers’ subscriptions currently renew automatically at the end of each annual or monthly period, as applicable, but the customer is free to disable automatic renewal or cancel the subscription at any time. As a result, even though the number of unique subscriptions to our platform has grown in recent years, there can be no assurance that we will be able to retain unique subscriptions beyond the existing annual or monthly subscription periods. In addition, any limitation or restriction imposed on our ability to bill our customers on a recurring basis, whether due to new regulations or otherwise, may significantly lower our unique subscription retention rate.

A number of factors could impact our ability to attract and retain customers and expand our customers’ use of our platform, including:

•the quality and design of our solutions compared to other similar solutions;

•our ability to develop new technologies or offer new or enhanced solutions;

•the pricing of our solutions compared to our competitors;

•the reliability and availability of our customer support;

•our ability to provide value-added third-party applications, solutions and services that integrate into our platform;

•any perceived or actual security, reliability, quality or compatibility problems with our solutions, including those related to system outages, unscheduled downtime and the impact of cyber-attacks on customers’ data;

•our ability to expand into new geographic regions; and

•the cost and effectiveness of our marketing campaigns.

We have historically experienced customer turnover as a result of general economic conditions and other risks affecting our customers’ businesses or needs. Many of these customers are in the entrepreneurial stage of their development and there is no guarantee that their businesses will succeed. Other customers may be looking for a shorter-term solution for a specific event. Our costs associated with renewals are substantially lower than costs associated with generating new unique subscriptions. Therefore, a reduction in retention of our unique subscriptions, even if offset by an increase in new unique subscriptions, could adversely impact our business, financial condition and results of operations. Moreover, any volatile or uncertain economic conditions and any resulting decrease in business formation or failures of small businesses could affect our ability to generate new unique subscriptions or retain existing unique subscriptions.

Additionally, our growth rate may decline over time even though the number of unique subscriptions on our platform increases. As our growth rate declines, investors’ perception of our business, financial condition and results of operations may be adversely affected. To the extent our growth rate slows, our business performance will become increasingly dependent on our ability to retain revenue from existing unique subscriptions and increase sales to existing customers.

If we fail to improve and enhance the functionality, performance, reliability, design, security and scalability of our solutions in a manner that responds to our customers’ evolving needs, our business, financial condition and results of operations may be adversely affected.

The markets in which we compete are characterized by constant change and innovation, and we expect them to continue to evolve rapidly. The success of our business will depend, in part, on our ability to adapt and respond effectively to changing market dynamics on a timely basis while continuing to improve and enhance the functionality, performance, reliability, design, security and scalability of our solutions. If we are unable to develop new and upgraded solutions that satisfy our customers and that keep pace with rapid technological and industry change, our business, financial condition and results of operations could be adversely affected.

The process of developing new technology is complex and uncertain. If we fail to accurately predict customers’ changing needs or emerging technological trends, or we otherwise fail to achieve the benefits expected from our investments in technology, our business, financial condition and results of operations could be harmed. The development of new and upgraded solutions involves a significant amount of time and effort from our research and development team, as it can take months to update, code and test new and upgraded solutions and integrate them into our existing solutions. Further, our design team spends a significant amount of time and resources in order to incorporate various design elements and

Table of Contents

other features into any new and upgraded solutions. The introduction of these new and upgraded design and functional features often involves a significant amount of marketing spend. We must also manage our existing solutions as we continue to introduce new solutions. Given this complexity, we occasionally have experienced, and could experience in the future, delays in completing the development and introduction of new and upgraded solutions.

Our industry is highly competitive, and we may not be able to compete successfully against current and future competitors.

The market for providing software as a service based website design and management software is evolving and we face competition in various aspects of our business, which we expect to intensify in the future as existing and new competitors introduce new solutions or enhance existing solutions. We also compete with specific providers offering services or products that overlap with parts of our solutions, including online presence solutions, e-commerce solutions, domain registration and website hosting services, email marketing solutions, scheduling solutions and hospitality solutions. Some of our competitors have longer operating histories, larger customer bases, greater brand recognition, more extensive commercial relationships and greater financial and other resources than we do.

New or existing competitors may be able to develop solutions better received by customers or may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, regulations or requirements of our customers and their users. In addition, some larger competitors may be able to leverage a larger installed customer base and distribution network to adopt more aggressive pricing policies and offer more attractive sales terms, which could increase customer churn, cause us to lose potential sales or reduce prices to remain competitive.

Competition may also intensify as our competitors enter into business combinations or alliances or raise additional capital, or as established companies in other market segments or geographic regions expand into our market segments or geographic regions. For instance, certain competitors could use strong or dominant positions in one or more markets to gain a competitive advantage by integrating competing platforms or features into solutions they control such as search engines, web browsers, mobile device operating systems or social networks or by making access to our platform more difficult. We also expect new entrants to offer competitive solutions. If we cannot compete successfully against current and future competitors, our business, financial condition and results of operations could be negatively impacted.

Our business, financial condition and results of operations could be harmed if we fail to manage our growth effectively.

The growth that we have experienced places significant demands on our operational infrastructure. The scalability and flexibility of our platform depends on the functionality of our technology and network infrastructure and our ability to handle increased traffic and demand for bandwidth. The growth in the number of unique subscriptions on our platform and the number of orders processed through our platform has increased the amount of data and requests processed. Any problems with the transmission of increased data and requests could result in harm to our brand or reputation. Moreover, as our business grows, we will need to devote additional resources to improving our operational infrastructure and continuing to enhance our scalability in order to maintain the performance of our platform. The growth that we have experienced places significant demands on our operational infrastructure. The scalability and flexibility of our platform depends on the functionality of our technology and network infrastructure and our ability to handle increased traffic and demand for bandwidth. The growth in the number of unique subscriptions on our platform and the number of orders processed through our platform has increased the amount of data and requests processed. Any problems with the transmission of increased data and requests could result in harm to our brand or reputation. Moreover, as our business grows, we will need to devote additional resources to improving our operational infrastructure and continuing to enhance our scalability in order to maintain the performance of our platform.

Our growth has also placed, and will likely continue to place, a significant strain on our managerial, administrative, operational, financial and other resources. We intend to further expand the business, including into new geographic regions, with no assurance that our revenue will continue to grow. We are likely to recognize the costs associated with these investments earlier than some of the anticipated benefits, and the return on these investments may be lower or may develop more slowly than we expect. Unless our growth results in an increase in our revenues that is proportionate to, or greater than, the increase in our costs associated with this growth, our profitability may be adversely affected. As we grow, we will be required to continue to improve our operational and financial controls, management information systems and reporting procedures and we may not be able to do so effectively.

The Squarespace brand is integral to our success. If we fail to protect or promote our brand, our business, financial condition and results of operations may be harmed.

We believe that protecting, maintaining and enhancing the Squarespace brand is integral to our success, particularly as we seek to attract new customers. Protecting, maintaining and enhancing our brand will depend largely on our ability to continue to provide design-focused and differentiated solutions, which we may not do successfully. The value of our brand may decline if we are unable to maintain the image of the Squarespace brand as design-focused. Successfully maintaining our brand will depend largely on the effectiveness of our marketing efforts, our ability to provide a reliable and useful platform to meet the needs of our customers, our ability to maintain our customers’ trust and our ability to continue to develop and successfully differentiate our solutions. Errors, defects, disruptions or other performance problems with our solutions, including with third-party services accessed through our platform, may harm our reputation and brand.

Table of Contents

Unfavorable media coverage, negative publicity or negative public perception about us or our marketing efforts, our industry, the quality and reliability of our platform or our privacy and security practices may also harm our reputation and our brand. If events occur that damage our reputation and brand, our ability to expand our subscription base may be impaired, and our business, financial condition and results of operations may be harmed.

We also believe that the importance of brand recognition will increase as competition in our market increases and the promotion of our brand may require substantial expenditures. We have invested, and may continue to invest, substantial resources to increase our brand awareness, both generally and in specific geographies and to specific customer groups. There can be no assurance that our brand development strategies and investment of resources will enhance recognition of the Squarespace brand or lead to an increased customer base. Furthermore, our international branding efforts may prove unsuccessful due to language barriers and cultural differences. If our efforts to protect and promote our brand are not successful, our business, financial condition and results of operations may be adversely affected. In addition, even if brand recognition and loyalty increases, revenue may not increase at a level commensurate with our marketing spend.

Our business, financial condition and results of operations would be adversely affected if our marketing and selling activities fail to generate new customers at the levels that we anticipate or fail to generate new customers on a cost-effective basis.

We use a variety of marketing channels to promote our brand, including online keyword search, sponsorships and celebrity endorsements, television, podcasts, print and online advertising, email and social media marketing. If we lose access to one or more of these channels because the costs of advertising become prohibitively expensive or for other reasons, we may not be able to promote our brand effectively, which could limit our ability to grow our business. In addition, in order to maintain our current revenues and grow our business, we need to continuously optimize our marketing campaigns aimed at acquiring new customers. However, we may fail to accurately predict customer interest and, as a result, fail to generate the expected return on marketing spend. An unexpected increase in the marginal acquisition cost of new customers may have an adverse effect on our ability to grow our subscription base. We have and may in the future invest a significant portion of our marketing expenses in more traditional advertising and promotion of our brand, including through out-of-home campaigns and television commercials, the effectiveness of which is more difficult to track than online marketing. If these marketing activities fail to generate traffic to our website, attract potential customers and lead to new and renewed subscriptions at the levels we anticipate, our business, financial condition and results of operations would be adversely affected.

If demand for our solutions does not meet expectations, our ability to generate revenue could be adversely affected.

Although we expect continued demand from individuals and businesses for our solutions, it is possible the rate of growth may not meet our expectations, or the market may not grow. Our expectations for future revenue growth are based in part on assumptions reflecting our industry knowledge and experience serving individuals and businesses, as well as our assumptions regarding demographic shifts, growth in the availability and capacity of internet infrastructure internationally and the general economic climate. If any of these assumptions proves to be inaccurate, including as a result of the extent of current global economic uncertainty, our growth could be significantly lower than expected.

Our ability to compete successfully depends on our ability to offer an integrated and comprehensive platform enabling a diverse base of customers to start, grow and run their businesses or promote their brand. The success of our solutions is predicated on the assumption that an online presence is, and will continue to be, an important factor in our customers’ abilities to establish, expand and manage their brand and business quickly, easily and affordably. If we are incorrect in this assumption, for example due to the introduction of a new technology or industry standard superseding the importance of an online presence or rendering our existing or future solutions obsolete, then our ability to retain existing customers and attract new customers could be adversely affected, which could harm our business, financial condition and results of operations.

If we fail to maintain a consistently high level of customer support, our brand, business, financial condition and results of operations may be harmed.

We believe our focus on customer support is critical to acquiring new customers, retaining existing customers and growing our business. As a result, we have invested heavily in the quality and training of our Customer Operations team along with the tools they use to provide this service. If we are unable to maintain a consistently high level of customer support, we may lose existing customers. In addition, our ability to attract new customers and increase unique subscriptions depends, in part, on the support we provide to customers as well as positive recommendations from our existing customers. Any failure to maintain a consistently high level of customer support, or a market perception that we do not maintain high-quality customer support, could adversely affect our brand, business, financial condition and results of operations.

Our pricing decisions may adversely affect our ability to attract and retain customers.

We have from time to time changed our overall pricing model or the various price points of our subscription plans and add-on services and expect to do so in the future. However, no assurance can be given that any new pricing model or price points will be optimal and not result in loss of customers or profits. In addition, as competitors introduce new solutions, we may be unable to attract new customers at the price or based on the pricing models we currently use and we

Table of Contents

may be required to reduce prices. Individuals and small businesses, which comprise the majority of customers on our platform, could be sensitive to price increases or swayed by more attractive prices offered by competitors. We also must determine the appropriate price to enable us to compete effectively internationally. Any of these developments could negatively impact our business, financial condition and results of operations.

We may acquire or invest in companies, which may divert our management’s attention and result in additional dilution to our stockholders. We may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions.

From time to time, we evaluate potential strategic acquisition, divestment or investment opportunities and we have completed or entered into various strategic acquisitions in recent periods, including the acquisition of Google Domains and the divestiture of Tock. Any future transactions that we enter into could be material to our business, financial condition and results of operations. The process of acquiring and integrating another company or technology could create unforeseen operating difficulties and expenditures. Acquisitions and investments involve a number of risks, such as:

•diversion of management time and focus from operating our business;

•use of resources that are needed in other areas of our business;

•retention and integration of employees from an acquired company, including potential risks or challenges to our corporate culture;

•failed or inadequate migration, integration and retention of acquired customers or subscriptions;

•implementation or remediation of controls, procedures and policies of an acquired company;

•difficulty integrating the accounting systems and operations of an acquired company;

•coordination of product, engineering and selling and marketing functions, including difficulties and additional expenses associated with incorporating the acquired company’s solutions and infrastructure with our existing solutions and infrastructure;

•unforeseen costs or liabilities;

•adverse effects to our existing business relationships as a result of the acquisition or investment;

•the possibility of adverse tax consequences;

•litigation or other claims arising in connection with the acquired company or investment; and

•in the case of foreign acquisitions, the need to integrate operations and workforces across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries.

In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. If our acquisitions do not yield expected returns, we may be, and in the past have been, required to take charges on our operating results based on this impairment assessment process, which could adversely affect our business, financial condition and results of operations.

Future acquisitions and investments may also result in dilutive issuances of equity securities, which could adversely affect the trading price of our Class A common stock, result in issuances of securities with superior rights and preferences to our Class A common stock or result in the incurrence of debt with restrictive covenants that limit our operating flexibility.

We may not be able to identify future acquisition or investment opportunities that meet our strategic objectives, or to the extent such opportunities are identified, we may not be able to negotiate terms with respect to the acquisition or investment that are acceptable to us. Acquisitions we complete may not ultimately strengthen our competitive position or achieve our strategic objectives, and any acquisitions we complete could be viewed negatively by investors. To pay for any such acquisition, we may have to use cash or incur debt, both of which may affect our financial condition or the trading price of our Class A common stock.

We depend on highly skilled personnel, and if we are unable to hire, integrate and retain our personnel, we may not be able to address competitive challenges.

Our future success will depend upon our continued ability to attract, hire, integrate and retain highly skilled personnel, including senior management, engineers, designers, product managers, finance, and legal personnel and customer support. Competition for highly skilled personnel is intense. We compete with many other companies for engineers, designers and product managers with meaningful experience in designing, developing and managing software, as well as for skilled marketing, operations and customer support professionals, and we may not be successful in attracting and retaining the professionals we need. We may need to invest significant amounts of cash and equity to attract and retain new and highly skilled employees, and may never realize returns on these investments. In addition, we are limited in our ability to recruit global talent for our U.S. offices by U.S. immigration laws, including those related to H1-B visas. If we are not

Table of Contents

able to effectively hire, train and retain employees, our ability to achieve our strategic objectives will be adversely impacted and our business, financial condition and results of operations will be harmed.

At present we support remote, hybrid and fully office based arrangements for our employee base. While we have a distributed workforce and our employees are accustomed to working remotely or working with remote employees, our workforce has not historically been fully remote. Doing less business in-person may impact our ability to preserve our corporate culture. Any failure to preserve our culture could negatively affect our future success, including our ability to retain and recruit personnel and to effectively focus on and pursue our corporate objectives. Our management team has spent, and may continue to spend, significant time, attention and resources monitoring workplace-related changes and seeking to manage the effects on our business and workforce.

In addition to hiring and integrating new employees, we must continue to focus on retaining our key employees who foster and promote our innovative corporate culture. Our future performance depends on the continued services and contributions of our Founder and Chief Executive Officer, Mr. Casalena, who is critical to the development of our business and growth strategy, in addition to other key employees to execute on our business plan and to identify and pursue new opportunities and solutions. The failure to properly develop or manage succession plans or develop leadership talent or the loss of services of key employees could significantly delay or prevent the achievement of our strategic objectives. From time to time, there may be changes in our senior management team resulting from the hiring or departure of executives, which could disrupt our business. We do not have fixed term agreements with our executive officers or other key personnel that require them to work beyond a standard notice period; therefore, they could terminate their employment with us at any time. The loss of one or more of our key employees (including any limitation on the performance of their duties or short term or long term absences as a result of illness) could adversely affect our business, financial condition and results of operations.

We primarily rely on a single supplier to process payments from our customers and we integrate with a limited number of suppliers to process transactions from users.

The success of our platform depends, in part, on our ability to integrate and offer third-party services to our customers. In particular, we use Stripe, Inc. (“Stripe”) to process our transactions with our customers and we offer payment processing integrations through Stripe, PayPal Holdings, Inc. (“PayPal”) and Block, Inc. (“Block”). We also use Stripe to process transactions for our native payment solution. While we offer our customers access to three payment processing integrations and our native payment solution through which to charge their users, disruptions or problems with the relevant services provided by Stripe, PayPal or Block could have an adverse effect on our reputation, business, financial condition and results of operations. Further, if Stripe or any of the other payment service providers we use were to terminate, or materially alter, its relationship with us or become unable to continue processing payments on our behalf, we could experience an impact to our financial results or incur substantial delays and expense in finding and integrating an alternative payment service provider to process payments from our customers and their users, and the quality and reliability of any such alternative payment service provider may not be comparable.

If we cannot maintain the compatibility of our platform and solutions with third-party applications or content or if the third-party applications that we offer fail to keep pace with competitors’ offerings, demand for our platform and solutions could decline.

In addition to offering our customers access to Stripe and other payment solutions, we offer our customers access to third-party applications for order fulfillment, accounting and other business services as well as third-party content. Third-party application providers may change the features of their applications and third-party content providers and application providers may change how others can access the application or content or alter the terms governing use of their applications or content in an adverse manner. Such changes could limit, restrict or terminate our access to their applications and content, which could negatively impact our solutions and harm our business, financial condition and results of operations. In addition, competitors may offer better functionality than the third-party applications integrated into our platform. If we fail to integrate new third-party applications and content that our customers need for their online presence or to develop them directly, we may not be able to offer the functionality that our customers expect, which would negatively impact our solutions and, as a result, harm our business, financial condition and results of operations.

We rely heavily on the reliability, security and performance of our software. If our software contains serious errors or defects, or we have difficulty maintaining the software, we may lose revenue and market acceptance and may incur costs to defend or settle claims with our customers.

The reliability and continuous availability of our platform is critical to our success. However, software such as ours often contains errors, defects, security vulnerabilities or software bugs that are difficult to detect and correct, particularly when first introduced or when new versions or enhancements are released. Any third-party software we incorporate into our platform may have similar deficiencies. Despite internal testing, our platform may contain serious errors or defects, security vulnerabilities or software bugs that we may be unable to successfully correct in a timely manner or at all, and any ensuing disruptions could result in lost revenue, significant expenditures of capital, a delay or loss in market acceptance and damage to our reputation and brand, any of which could have an adverse effect on our business, financial condition and results of operations. Furthermore, our platform is cloud-based, which allows us to deploy new versions and enhancements to all of

Table of Contents

our customers simultaneously. To the extent we deploy new versions or enhancements that contain errors, defects, security vulnerabilities or software bugs to all of our customers simultaneously, the consequences would be more severe than if such versions or enhancements were only deployed to a smaller number of customers. In addition, to the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, financial condition and results of operations, as well as our reputation, may be adversely affected.

Since customers may use our solutions for processes that are critical to their businesses, errors, defects, security vulnerabilities, service interruptions or software bugs in our platform could result in losses to our customers. Customers may seek significant compensation from us for any losses they suffer or they may cease conducting business with us altogether. Further, a customer could share information about bad experiences on social media, which could result in damage to our reputation. There can be no assurance that provisions typically included in agreements with our customers that attempt to limit exposure to claims would be enforceable or adequate or would otherwise protect us from liabilities or damages with respect to any particular claim. Even if not successful, a claim brought against us by any of our customers would likely be time-consuming, divert management’s attention and be costly to defend and could seriously damage our reputation and brand, making it harder to sell our solutions.

We rely on search engines, social networking sites and online streaming services to attract a meaningful portion of our customers, and if those search engines, social networking sites and online streaming services change their listings or policies regarding advertising, or increase their pricing or suffer problems, it may limit our ability to attract new customers.

Many customers locate our platform through internet search engines, such as Google, and advertisements on social networking sites and online streaming services, such as Instagram and YouTube as an alternative to typing our website address directly into a web browser navigation bar. Changes in these customer behaviors or practices may potentially result in reduced traffic to our website. Moreover, if we are listed less prominently or fail to appear in search results for any reason, visits to our website could decline significantly, and we may not be able to replace this traffic. Search engines revise their algorithms from time to time in an attempt to optimize their search results. If the search engines on which we rely for algorithmic listings modify their algorithms, we may appear less prominently or not at all in search results, which could result in reduced traffic to our website that we may not be able to replace. Additionally, if the costs of search engine marketing services, such as Google AdWords, increase, we may incur additional marketing expenses, we may be required to allocate a larger portion of our marketing spend to this channel or we may be forced to attempt to replace it with another channel (which may not be available at reasonable prices, if at all), and our business, financial condition and results of operations could be adversely affected.

Furthermore, competitors may bid on our brand names and other search terms that we use to drive traffic to our website. Such actions could increase our marketing costs and result in decreased traffic to our website. In addition, search engines, social networking sites and video streaming services may change their advertising policies from time to time. If any change to these policies delays or prevents us from advertising through these channels, it could result in reduced traffic to our website and sales of our solutions. Additionally, new search engines, social networking sites, video streaming services and other popular digital engagement platforms may develop in specific jurisdictions or more broadly that reduce traffic on existing search engines, social networking sites and video streaming services. If we are not able to achieve awareness through advertising or otherwise, we may not achieve significant traffic to our website.

Our business, financial condition and results of operations would be harmed if changes to technologies used in our platform or new versions or upgrades of operating systems and internet browsers adversely impact the process by which customers interface with our platform and users interface with our customers’ sites.

We believe that our integrated web and mobile platform has helped us to grow our customer base. In addition to offering customers mobile-optimized websites created on our platform, we offer mobile apps that enable customers to monitor analytics, fulfill orders and create, edit and manage content from their mobile devices, among other things. Mobile and desktop operating system providers, such as Microsoft, Google, Apple or any other provider of internet browsers, could introduce new features that would make it difficult for customers to use our platform, change existing browser specifications such that they would be incompatible with our platform, prevent users from accessing customers’ sites or limit or preclude our marketing efforts. In addition, we are subject to the standard policies and terms of service of these providers, which may change in the future. We may incur additional costs in order to adapt our platform to other operating systems and may face technical challenges adapting our solutions to different versions of already-supported operating systems, such as Android variants offered by different mobile phone manufacturers, and we may face technical challenges adapting to new hardware and software on the Android and iOS platforms. Any changes to technologies used in our platform, to existing features that we rely on or to operating systems or internet browsers that make it difficult for customers to access our platform or visitors to access our customers’ sites, may make it more difficult for us to maintain or increase our revenue and could adversely impact our business, financial condition and results of operations. Moreover, the mobile technology industry is characterized by changes in customer preferences and the emergence of new industry standards and practices. Our future prospects could be harmed if we fail to address such changes on a timely basis and in a cost-effective manner. The use of our apps is also subject to applicable terms of use of third-party app stores. If we are

Table of Contents

unable to maintain availability on these third-party app stores or update our applications on these stores, our business, financial condition and results of operations may be harmed.

We use a limited number of cloud service providers, infrastructure providers and data centers to deliver our solutions. Any disruption of service by these providers or at these facilities could harm our business, financial condition and results of operations.

We currently rely on a limited number of cloud service providers and third-party data center facilities. While we engineer and architect the systems upon which our platform runs, and own the hardware installed at the data centers on which we rely, we do not control the operation of these facilities. We also obtain cloud storage and computing from Amazon and Google. We have experienced, and may in the future experience, failures at the third-party data centers where our hardware is deployed. Data centers are vulnerable to damage or interruption from human error, cyber-crimes, computer viruses and other intentional bad acts, earthquakes, hurricanes, floods, fires, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures and similar events. Changes in law or regulations applicable to data centers in various jurisdictions could also cause a disruption in service. Similarly, if we are unable to utilize cloud services from Amazon or Google, we could experience delays or disruptions. The occurrence of any of these events or other unanticipated problems with these providers or at these facilities could result in loss of data (including personal information), lengthy interruptions in the availability of our solutions and harm to our reputation and brand.

While our third-party data center and cloud provider agreements may include automatic renewal provisions, these service providers have no obligation to renew the agreements on commercially reasonable terms or at all. In addition, a timely notice of intent not to renew under one or more of these agreements may not provide us with adequate time to transfer operations and may cause disruptions to our platform. Similarly, service providers of other aspects of our critical infrastructure, such as private network connectivity, content delivery, DDoS mitigation, domain registration and domain name servers, among others, are under no obligation to continue to provide these services after the expiration of the respective service agreements, nor are they obligated to renew the terms of those agreements. If we were required to move our equipment to a new facility, move cloud platforms or migrate to a new critical infrastructure vendor without adequate time to plan and prepare for such a migration, we would face significant challenges due to the technical complexity, risk and high costs of the relocation or migration. If we are unable to renew these agreements on commercially reasonable terms, or if the service providers close such facilities or cease providing such services, we may be required to transfer to new service providers and may incur costs and possible service interruption in connection with doing so.

Our business depends on our customers’ continued and unimpeded access to the internet and the development and maintenance of the internet infrastructure. Internet service providers may be able to block, degrade or charge for access to certain of our solutions, which could lead to additional expenses and the loss of customers.

Our success depends upon the general public’s ability to access the internet and continued willingness to use the internet as a means to pay for purchases, communicate, access social media and research and conduct commercial transactions, including through mobile devices. If consumers or sellers become unable, unwilling or less willing to use the internet for commerce for any reason, including lack of access to high-speed communications equipment, internet outages or delays, disruptions or other damage to sellers’ and consumers’ computers, increases in the cost of accessing the internet and security and privacy risks or the perception of such risks, our business, financial condition and results of operations could be adversely affected.

Currently, internet access is provided by companies that have significant market power in the broadband and internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies and government-owned service providers. Laws or regulations that adversely affect the growth, popularity or use of the internet, including changes to laws or regulations impacting internet neutrality, could decrease the demand for our solutions, increase our operating costs, require us to alter the manner in which we conduct our business or otherwise adversely affect our business, financial condition and results of operations. We could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business, financial condition and results of operations. For example, paid prioritization could enable internet service providers to impose higher fees. Public opinion towards internet infrastructure, mobile connected devices and other similar technological advancements is rapidly evolving and such industries have faced criticism in the past. We cannot be certain that the public will continue to support existing or new technologies on which we, our service providers, our customers and their users rely or may come to rely. If our industry loses public interest and support, it could have a material adverse effect on our business, financial condition and results of operations.

We may be unable to obtain, maintain and protect our intellectual property rights and proprietary information or prevent third-parties from making unauthorized use of our technology.

Intellectual property rights are important to our business. We rely on a combination of trade secret, copyright, patent and trademark laws as well as contractual provisions, such as confidentiality clauses, to protect our proprietary technology, know-how, brand and other intellectual property, all of which offer only limited protection. While it is our policy to protect and defend our intellectual property, the steps we take may be inadequate to prevent infringement, misappropriation, dilution or other potential violations of our intellectual property rights or to provide us with any competitive advantage.

Table of Contents

Further, the laws of foreign countries may not provide as much protection to intellectual property as exists in the United States. For example, some license provisions protecting against unauthorized use, copying, transfer and disclosure of our solutions may be unenforceable or otherwise limited under the laws of certain jurisdictions and foreign countries. Moreover, policing unauthorized use of our intellectual property is difficult, expensive and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. To the extent we expand our international activities, our exposure to unauthorized copying and use of our intellectual property and proprietary information may increase. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. Despite the precautions taken by us, it may be possible for unauthorized third-parties to copy or reverse engineer our solutions and use information that we regard as proprietary to create solutions that compete with those offered by us.

We enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with the parties with whom we have strategic relationships and business alliances. No assurance can be given that these agreements will be effective in controlling access to, or ownership of, our proprietary information and technology or providing adequate remedies for unauthorized use or disclosure of such information or technology. Further, these agreements do not prevent competitors from independently developing technologies that are substantially equivalent or superior to our solutions. Additionally, from time to time we may be subject to opposition or similar proceedings with respect to applications for registrations of our intellectual property, including but not limited to trademark applications. While we aim to acquire adequate protection of our brand through trademark registrations in key markets, occasionally third-parties may have already registered or otherwise acquired rights to identical or similar marks for solutions that also address the software market. Any of the pending or future trademark applications and any future patent applications, whether or not challenged, may not be issued with the scope of the claims we seek, if at all. There can be no guarantee that additional trademarks will issue from pending or future applications, that patents will issue from future applications, if any, or that any issued patents or trademarks will not be challenged, invalidated, circumvented or declared invalid or unenforceable, or that the rights granted under the patents will provide us with meaningful protection or any commercial advantage. We rely on our brand and trademarks to identify our solutions to our customers and to differentiate our solutions from those of our competitors. If we are unable to adequately protect our trademarks, third-parties may use brand names or trademarks similar to ours in a manner that may cause confusion or dilute our brand names or trademarks, which could decrease the value of our brand.

From time to time, we may discover that third-parties are infringing, misappropriating or otherwise violating our intellectual property rights. However, policing unauthorized use of our intellectual property and misappropriation of our technology is difficult and we may therefore not always be aware of such unauthorized use or misappropriation. In addition, litigation brought to protect and enforce our intellectual property rights can be costly, time-consuming or distracting to management and could result in the impairment or loss of rights or privileges associated with our intellectual property. As a result, we may be aware of infringement by competitors but may choose not to bring litigation to enforce our intellectual property rights due to the cost, time or distraction of bringing such litigation. Furthermore, even if we decide to bring litigation, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits challenging or opposing our right to use and otherwise exploit particular intellectual property, services and technology or the enforceability of our intellectual property rights. As a result, despite efforts by us to protect our intellectual property rights, unauthorized third-parties may attempt to use, copy or otherwise obtain and market or distribute our intellectual property or technology or otherwise develop solutions with the same or similar functionality as our solutions. If competitors infringe, misappropriate or otherwise violate our intellectual property rights and we are not adequately protected or elect not to litigate, or if competitors are able to develop solutions with the same or similar functionality without infringing our intellectual property, our competitive position, business, financial condition and results of operations could be harmed.

Claims by third-parties of intellectual property infringement, regardless of merit, could result in litigation and materially adversely affect our business, financial condition and results of operations.

The software industry is characterized by the existence of a large number of patents and frequent claims and related litigation regarding patents and other intellectual property rights. Third-parties have asserted, and may in the future assert, that our platform, solutions, technology, methods or practices infringe, misappropriate or otherwise violate their intellectual property or other proprietary rights. Such claims may be made by competitors seeking to obtain a competitive advantage or by other parties. Our competitors and others may now and in the future have significantly larger and more mature patent portfolios than we have.

Additionally, non-practicing entities may make claims of infringement and attempt to extract settlements from companies like us, and such entities are unlikely to be deterred by a patent portfolio of any size because their sole or primary business is the assertion of patent claims. The risk of claims may increase as the number of solutions we offer and the number of competitors increases and overlaps occur. In addition, to the extent we gain greater visibility and market exposure, we face a higher risk of being the subject of intellectual property infringement claims. If it appears necessary or desirable, we may seek to license intellectual property that our solutions are alleged to infringe. If required licenses cannot be obtained, litigation could result.

Table of Contents

Regardless of merit, litigation is inherently uncertain and defending intellectual property claims is costly, can impose a significant burden on management and employees, can disrupt the conduct of our business and can have an adverse effect on our brand, business, financial condition and results of operations. The terms of any settlement or any adverse judgment may require us to pay substantial damages, develop non-infringing technology, enter into royalty-bearing licensing agreements, stop selling or marketing some or all of our solutions, indemnify our customers or partners, refund fees or re-brand our solutions, any of which could be costly and could materially and adversely affect our business, financial condition and results of operations.

Our platform contains open-source software, which could negatively affect our ability to sell our solutions, pose particular risks to our proprietary software and subject us to possible litigation.

We use open-source software that is subject to one or more open-source licenses in connection with our software development and we may incorporate additional open-source software into our software, or otherwise link our software to open-source software. Open-source software is typically freely accessible, usable and modifiable, subject to compliance with the applicable licenses. Certain open-source software licenses require an entity who distributes or otherwise makes available the open-source software in connection with the entity’s software to publicly disclose part or all of the source code to the entity’s software or to make any derivative works of the open-source code or even the entity’s software available to others on potentially unfavorable terms or at no cost.

However, the terms of many open-source licenses have not been interpreted by United States or foreign courts and there is little or no legal precedent governing the interpretation of many of the terms of certain of these licenses. As a result, the potential impact of these terms on our business is uncertain and may result in unanticipated obligations or restrictions relating to the use of our platform. In that event, we could be required to seek licenses from third-parties in order to continue offering our solutions, to re-develop our solutions, to discontinue sales of our solutions or to release our proprietary source code under the terms of an open-source license, any of which could harm our business, financial condition and results of operations. From time to time, companies that use open-source software have faced claims challenging the use of open-source software and/or compliance with open-source license terms, and we may be subject to such claims in the future.

While we monitor our use of open-source software and try to ensure that none is used in a manner that would require disclosure of proprietary source code that would preclude us from charging fees for the use of our software or that would otherwise breach the terms of an open-source agreement, we cannot guarantee that our monitoring efforts will be fully successful. While it is our view that the majority of our solutions are not considered distributed software since no installation of the applicable software is necessary, this position could be challenged. In addition, parts of our platform, such as our mobile applications, for example, may be considered to be distributed. Finally, certain open-source licenses require disclosure of proprietary code under certain circumstances, even in the absence of distribution. In those instances, if a specific open-source license requires it, we might be obligated to disclose part of our proprietary code or otherwise be subject to undesirable open-source license terms. Any termination of an open-source license, requirement to disclose proprietary source code or distribute proprietary software on open-source license terms or pay damages for breach of contract could be harmful to our business, financial condition and results of operations, and could help our competitors develop solutions that are similar to or better than ours.

In addition to risks related to license requirements, usage of open-source software can lead to greater risks than the use of third-party commercial software, as open-source licensors generally do not provide warranties, controls on the origin or development of the software or remedies against the licensors. Further, given the nature of open-source software, it may be more likely that third-parties might assert copyright and other intellectual property infringement claims against us based on our use of open-source software. Finally, use of open-source software may introduce vulnerabilities into our solutions. Disclosing the source code of our proprietary software could also make it easier for cyber attackers and other third-parties to discover or exploit vulnerabilities in or to defeat the protections of our solutions, which could result in our solutions failing to provide our customers with the security they expect. Likewise, some open source projects have known security or other vulnerabilities or architecture instabilities, or are otherwise subject to security attacks due to their wide availability, or are provided on an “as-is” basis. Many of the risks associated with usage of open-source software cannot be eliminated and could adversely affect our business, financial condition and results of operations.

We are exposed to risks, including security and regulatory risks, associated with credit card and debit card payment processing.

We accept payments through credit and debit cards and are therefore subject to a number of risks related to credit and debit card payments, including:

•payment of fees, which may increase over time and may require us to either increase the prices we charge for our solutions or experience an increase in operating expenses;

•if our billing systems fail to work properly and, as a result, we do not automatically charge customers’ credit cards on a timely basis or at all, we could lose revenue;

Table of Contents

•if we are unable to maintain our chargeback rate at acceptable levels, our credit card fees for chargeback transactions, or for other credit and debit card transactions, may increase or issuers may terminate their relationship with us;

•if we are unable to maintain Payment Card Industry Data Security Standard (“PCI-DSS”) compliance or other payment card network operating rules, we may breach our contractual obligations, be subject to fines, penalties, damages, higher transaction fees and civil liability, be prevented from processing or accepting payment cards or lose payment processing partners;

•we securely store and rely on third-party payment service providers to securely store customer payment card information and maintain PCI-DSS compliance; and

•we rely on third-party payment service providers to process payments from our customers and their users and the providers may face downtime and thus affect our cash flow and our customers’ cash flow.

There can also be no assurance that the billing system data security standards of our third-party payment service providers will adequately comply with the billing standards of any future jurisdiction in which we seek to market our solutions.

As part of the contracts we enter into with Stripe and other payment service providers for Squarespace Payments, our native payment solution, we are obligated to comply with additional rules and regulations that relate to the processing of payments, including those implemented by the payment card networks. If we fail to comply with these rules and regulations as part of our contractual obligations, we may be subject to monetary fines or other penalties, which could have an adverse effect on our business, financial condition and results of operations.

Further, certain of our subsidiaries perform services that relate to the processing of payments or similar activities. The U.S. Department of Treasury’s Financial Crimes Enforcement Network and various state banking departments regulate entities engaged in money transmission and require registration, at the federal level, and licensure, at the state level, of entities engaged in regulated activity. We have relied on various exemptions from such registration and licensing requirements to date and believe, based on our business model, that such exemptions are valid. Any determination that we are not exempt may require expenditures of time and money to remediate and could adversely affect our business, financial condition and results of operations.

Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions could adversely affect our liquidity, financial condition and results of operations.

We deposit substantial funds in financial institutions and may maintain cash balances at such financial institutions in excess of the Federal Deposit Insurance Corporation limit. Events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. These events could have an adverse effect on our liquidity, financial condition and results of operations.

For example, in March 2023, Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. Although the Federal Reserve Board, the Department of the Treasury and the FDIC have taken steps to ensure that depositors at Silicon Valley Bank can access all of their funds, including funds held in uninsured deposit accounts, there is no guarantee that, in the event of the closure of other financial institutions in the future, depositors would be able to access uninsured funds or that they would be able to do so in a timely fashion.

To date, we have not experienced any adverse impact to our liquidity, financial condition or results of operations as a result of the events described above. However, uncertainty remains over liquidity concerns in the broader financial services industry and we could be adversely impacted by these developments in ways that we cannot predict at this time. Further, we cannot guarantee that we will be able to avoid negative consequences directly or indirectly from any failure of one or more financial institutions.

Our business is subject to online security risks, including security breaches and cyberattacks. If the security of personal information, payment card information or other confidential information of customers and their users stored in our systems is breached or otherwise subjected to unauthorized access, our reputation may be harmed and we may be exposed to liability.

Our business involves the storage and/or transmission of personal information, payment card information and other confidential information. In addition, the amount of potentially sensitive or confidential data we store for customers on our servers has been increasing, including since the introduction of Squarespace Payments, our native payment solution. There has also been an increase in the number of malicious software attacks in the technology industry generally. In our industry, it is typical to experience a high rate of such attacks. For example, we have experienced, and may experience in the future, DDoS attacks aimed at disrupting service to our customers and other attacks on our systems by sophisticated threat actors.

Table of Contents

Social engineering efforts may compromise our personnel or those of our third party vendors, leading to unauthorized access to facilities, systems or information we have a responsibility to protect.

If third-parties succeed in penetrating our security measures or those of our service providers, or in otherwise accessing or obtaining without authorization the sensitive or confidential information we or our service providers maintain on behalf of our customers and their users, we could be subject to liability, loss of business, litigation, government investigations or other losses. Hackers or individuals who attempt to breach the security measures put in place by us or our service providers could, if successful, cause the unauthorized disclosure, misuse or loss of personal information, payment card information or other confidential information, suspend web-hosting operations or cause malfunctions or interruptions in our platform.

If we experience any material breaches of security measures or sabotage or otherwise suffer unauthorized use or disclosure of, or access to, personal information, payment card information or other confidential information, we might be required to expend significant capital and resources to address these problems. We may not be able to remedy any problems caused by hackers or other similar actors in a timely manner, or at all. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until after they are launched against a target, we and our service providers may be unable to anticipate these techniques or to implement adequate preventative measures. Advances in computer capabilities, discoveries of new weaknesses and other developments with software generally used by the internet community also increase the risk we, or customers using our servers, will suffer a material security breach. We cannot guarantee that our systems, security protocols, network protection mechanisms, cybersecurity awareness training, insider threat protection program, access controls, and other procedures and measures currently in place, or that may be in place in the future, will be adequate to prevent or remediate service interruptions, system failure, third party operating systems and software vulnerabilities, damage to one or more of our systems, data loss, security breaches or other data security incidents. We, our service providers or our customers may also suffer material security breaches or unauthorized access to personal information, payment card information and other confidential information due to employee error, rogue employee activity, unauthorized access by third-parties acting with malicious intent or who commit an inadvertent mistake or social engineering. If a material breach of security or other data security incident occurs or is perceived to have occurred, the perception of the effectiveness of our security measures and reputation could be harmed and we could lose current and potential customers, even if the security breach were to also affect one or more of our competitors. Further, concerns about practices with regard to the collection, use, disclosure or security of personal information, payment card information or other confidential information, even if unfounded, could damage our reputation and adversely affect our business, financial condition and results of operations.

Any actual or alleged security breaches or other unauthorized access to personal information, payment card information and other confidential information or alleged violation of federal, state or foreign laws or regulations relating to privacy and data security could result in:

•mandated customer notifications, litigation, government investigations, significant fines and expenditures;

•claims against us for misuse of personal information, payment card information and other confidential information;

•diversion of management’s attention;

•damage to our brand and reputation;

•our operations being suspended for some length of time; and

•an adverse effect on our business, financial condition and results of operations.

In addition, we could be required to devote significant resources to investigate and address a security breach. Defending against claims or litigation based on any security breach or incident, regardless of its merit, will be costly and may cause reputation harm. Further, under certain regulatory schemes, such as the California Consumer Privacy Act (the “CCPA”), we may be liable for statutory damages on a per breached record basis, irrespective of any actual damages or harm to the individual. The successful assertion of one or more large claims against us that exceed available insurance coverage, denial of coverage as to any specific claim or any change or cessation in our insurance policies and coverages, including premium increases or the imposition of large deductible requirements, could adversely affect our business, financial condition and results of operations. We expect to continue to expend significant resources to protect against security breaches and other data security incidents. The risk that these types of events could seriously harm our business is likely to increase as we expand our solutions and operate in more geographic regions.

We are subject to privacy and data protection laws and regulations as well as contractual privacy and data protection obligations. Our failure to comply with these or any future laws, regulations or obligations could subject us to sanctions and damages and could harm our reputation, business, financial condition and results of operations.

We are subject to a variety of laws and regulations, including regulation by various federal government agencies, including the FTC, the Federal Communications Commission and state and local agencies, as well as data privacy and security laws in jurisdictions outside of the United States. We collect personal information and other potentially protected

Table of Contents

information from our employees, our current and prospective customers and their users. The U.S. federal and various state and foreign governments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personal information, payment card information or other confidential information of individuals and the FTC and many state attorneys general are applying federal and state consumer protection laws to impose standards on the online collection, use and dissemination of data. Self-regulatory obligations, other industry standards, policies and other legal obligations may apply to our collection, distribution, use, security or storage of personal information, payment card information, payment solution know-your-customer and risk information or other confidential information relating to individuals. These obligations may be interpreted and applied inconsistently from one jurisdiction to another and may conflict with one another, other regulatory requirements or our internal practices. Any failure or perceived failure by us to comply with United States, European Union or other foreign privacy or security laws, policies, industry standards or legal obligations or any security incident resulting in the unauthorized access to, or acquisition, release or transfer of, personal information, payment card information, payment solution know-your-customer and risk information or other confidential information relating to our customers, employees or others may result in governmental enforcement actions, litigation, fines and penalties or adverse publicity and could cause our customers to lose trust in us, which could have an adverse effect on our reputation, business, financial condition and results of operations.

We expect there will continue to be newly enacted and proposed laws and regulations as well as emerging industry standards concerning privacy, data protection and information security in the United States, the European Union and other jurisdictions, and we cannot yet determine the impact such future laws, regulations and standards may have on our business. Such laws, regulations, standards and other obligations could impair our ability to, or the manner in which we collect or use information to target advertising to our customers, thereby having a negative impact on our ability to maintain and grow our customer base and increase revenue. For example, the CCPA requires, among other things, that covered companies such as ours provide new disclosures to California consumers and affords such consumers new rights, including the right to access and delete their information and to opt-out of certain sharing and sales of personal information or opt into certain financial incentive programs. The law also prohibits covered businesses from discriminating against consumers (e.g., charging more for services) for exercising any of their CCPA rights. The CCPA took effect on January 1, 2020 and enforcement of the CCPA began on July 1, 2020. The CCPA imposes a severe statutory damages framework as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action is expected to increase the likelihood of, and risks associated with, data breach litigation. It remains unclear how various provisions of the CCPA will be interpreted and enforced. The CCPA has been amended on multiple occasions and is the subject of regulations of the California Privacy Protection Agency. Additionally, the California Secretary of State certified the California Privacy Rights Act (the “CPRA”), which California voters approved on November 4, 2020. This initiative significantly modified the CCPA, resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply. Other states have passed and others may pass comparable legislation, with potentially greater penalties and more rigorous compliance requirements relevant to our business. The effects of the CCPA, and other similar state or federal laws, are potentially significant and may require us to modify our data processing practices and policies and to incur substantial costs and potential liability in an effort to comply with such legislation. Future restrictions on the collection, use, sharing or disclosure of our customers’ data or additional requirements for express or implied consent of customers for the collection, use, disclosure, sharing or other processing of such information could increase our operating expenses, require us to modify our solutions, possibly in a material manner, or stop offering certain solutions, and could limit our ability to develop and implement new solutions.

In addition, several foreign countries and governmental bodies, including the European Union and Canada, have laws and regulations concerning the collection and use of their residents’ personal information and payment card information, which are often more restrictive than those in the United States. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of personal information and payment card information identifying, or which may be used to identify, an individual, such as names, email addresses and, in some jurisdictions, Internet Protocol (IP) addresses, device identifiers and other data. Although we are working to comply with those laws and regulations applicable to us, these and other obligations may be modified and interpreted in different ways by courts, and new laws and regulations may be enacted in the future. We are subject to the E.U. General Data Protection Regulation 2016/679 (the “GDPR”), and following the United Kingdom’s exit from the European Union, from January 1, 2021, we are also subject to the United Kingdom GDPR (the “U.K. GDPR”), which, together with the amended U.K. Data Protection Act of 2018 (the “U.K. Data Protection Act”), retains the GDPR in U.K. national law. The U.K. GDPR mirrors the fines under the GDPR. It remains unclear how the U.K. GDPR, the U.K. Data Protection Act and other U.K. data protection laws or regulations will develop in the medium to longer term. In addition, some countries are considering or have enacted legislation requiring local storage and processing of data that could increase the cost and complexity of delivering our solutions. Any new laws, regulations, other legal obligations or industry standards or any changed interpretation of existing laws, regulations or other standards may require us to incur additional costs and restrict our business operations.

The regulatory environment applicable to the handling of European Economic Area (“EEA”), Swiss and United Kingdom individuals’ personal data (as such item is used in the GDPR), and our actions taken in response, may cause us to face a risk of enforcement actions by data protection authorities in the EEA, Switzerland and the United Kingdom, assume additional liabilities or incur additional costs and could result in our business, financial condition and results of operations being harmed. In particular, with regard to transfers to the United States of personal data of our European and United

Table of Contents

Kingdom employees and our European, Swiss and United Kingdom customers and their users, the European Commission, the United Kingdom Government, and the Swiss Federal Administration (working with the U.S. Department of Commerce) adopted an adequacy decision pursuant to the EU-U.S. Data Privacy Framework, the Swiss-U.S. Data Privacy Framework and the UK Extension to the EU-U.S. Data Privacy Frameworks (each individually and jointly, the “Data Privacy Frameworks”). We comply with the Data Privacy Frameworks to provide an additional legal basis for transfers of personal data to the United States from the EEA, Switzerland and the United Kingdom. It is expected that the Data Privacy Frameworks will be subject to legal challenge to be invalidated through the Court of Justice of the European Union and the E.U. Model Clauses have been subject to legal challenge and may be modified or invalidated. The European Commission has adopted new modular E.U. Model Clauses and the non-legally binding guidance on Supplementary Measures that has been issued by the European Data Protection Board casts doubt on the ability to transfer unencrypted data to the United States. We are monitoring the developments related to the Data Privacy Frameworks and E.U. Model Clauses, but depending on the outcome, we may be unsuccessful in maintaining a legitimate means for our transfer and receipt of personal data from the EEA, Switzerland and United Kingdom in the United States and any other countries that are not considered adequate by the European Union, Switzerland or the United Kingdom. We may, in addition to other impacts, experience additional costs associated with increased compliance burdens and be required to engage in new contract negotiations with third-parties that aid in processing data on our behalf or localize certain data. We may experience reluctance or refusal by current or prospective European, Swiss or United Kingdom customers to use our solutions, and we may find it necessary or desirable to make further changes to our handling of personal data of EEA, Switzerland and United Kingdom residents.

We are also subject to evolving privacy laws on tracking technologies, including cookies and e-marketing. For example, in the European Union and the United Kingdom, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive are highly likely to be replaced by an E.U. regulation known as the ePrivacy Regulation which will significantly increase fines for non-compliance. Guidance and case law in the European Union and the United Kingdom require opt-in consent for the placement of a cookie or similar tracking technologies on a customer’s device and for direct electronic marketing. Evolving privacy laws on cookies and e-marketing could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities. Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand our customers.

Consumers can, with increasing ease, implement technologies that limit our ability to collect and use data to deliver or advertise our services, or otherwise limit the effectiveness of our platform. Cookies may be deleted or blocked by consumers. The most commonly used Internet browsers allow consumers to modify their browser settings to block first-party cookies (placed from the domain of the website owner that the consumer is browsing) or third-party cookies (placed from a different domain), and some browsers block third-party cookies by default. Some prominent technology companies, including Google, the owner of the Chrome browser, have announced intentions to discontinue support of third-party cookies, and to develop alternative methods and mechanisms for tracking consumers. Many applications and other devices allow consumers to avoid receiving advertisements by paying for subscriptions or other downloads. Mobile devices using Android and iOS operating systems limit the ability of cookies, or similar technology, to track consumers while they are using applications other than their web browser on the device.

If our privacy or data security measures fail to comply with current or future laws, regulations, policies, legal obligations or industry standards, or are perceived to have failed to so comply, we may be subject to litigation, regulatory investigations and related actions, significant fines (which, for certain breaches of the GDPR or U.K. GDPR, may be up to the greater of €20 million or 4% of total global annual turnover), civil claims including representative actions and other class action type litigation (potentially amounting to significant compensation or damages liabilities) or other liabilities, negative publicity and a potential loss of business. Moreover, if future laws, regulations, other legal obligations or industry standards, or any changed interpretations of the foregoing, limit our customers’ ability to use and share personal information, including payment card information, or our ability to store, process and share such personal information or other data, demand for our solutions could decrease, our costs could increase and our business, financial condition and results of operations could be harmed.

Activities of our customers or the content of their websites could damage our brand, subject us to liability and harm our business, financial condition and results of operations.

Our terms of service and acceptable use policy prohibit our customers from using our platform to engage in illegal or otherwise prohibited activities and our terms of service and acceptable use policy permit us to terminate a customer’s account if we become aware of such use. Customers may nonetheless use our platform to engage in prohibited or illegal activities, such as uploading content in violation of applicable laws, which could subject us to liability. Furthermore, our brand may be negatively impacted by the actions of customers that may be deemed to be hostile, offensive, inappropriate or illegal, whether such actions occur on our platform or otherwise. We do not proactively monitor or review the appropriateness of our customers’ content and we do not have control over customer activities or the activities in which

Table of Contents

their users engage. The safeguards we have in place may not be sufficient for us to avoid liability or avoid harm to our brand, especially if such hostile, offensive, inappropriate or illegal use is or becomes high profile, which could adversely affect our business, financial condition and results of operations. Customers using the platform may also operate businesses in regulated industries, which are subject to additional scrutiny, increasing the potential liability we could incur.

We are subject to export controls and economic sanctions laws that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.

Our business activities are subject to various restrictions under U.S. export controls and trade and economic sanctions laws, including the U.S. Commerce Department’s Export Administration Regulations and economic and trade sanctions regulations maintained by the U.S. Treasury Department’s Office of Foreign Assets Control. If we fail to comply with these laws and regulations, we could be subject to civil or criminal penalties and reputational harm. U.S. export control laws and economic sanctions laws also prohibit certain transactions with U.S. embargoed or sanctioned countries, governments, persons and entities.

Even though we take precautions to prevent transactions with U.S. sanctions targets, there is risk that in the future we could provide our solutions to such targets despite such precautions. This could result in negative consequences to us, including government investigations, penalties and reputational harm. Changes in the list of embargoed countries and regions or prohibited persons may require us to modify these procedures in order to comply with governmental regulations.

Changes in our solutions, changes in export and import regulations or changes in the global environment may create delays in the introduction and sale of our solutions in international markets or, in some cases, prevent the sale of our solutions to certain countries, governments or persons altogether. Any change in export or import regulations, shift in the enforcement or scope of existing regulations or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our platform or decreased ability to sell our solutions to existing or potential customers. Any decreased use of our solutions or limitation on our ability to sell our solutions internationally could adversely affect our growth prospects.

If we are found to be in violation of the export controls laws and regulations or economic sanctions laws and regulations, penalties may be imposed against us and our employees, including loss of export privileges and monetary penalties, which could have an adverse effect on our business, financial condition and results of operations.

Due to the global nature of our business, we could be adversely affected by violations of anti-bribery and anti-corruption laws.

The global nature of our business creates various domestic and local regulatory challenges. The FCPA, U.K. Bribery Act, the U.S. Travel Act of 1961 and similar anti-bribery and anti-corruption laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to foreign government officials and other persons for the corrupt purpose of obtaining or retaining business, directing business to any person or securing any advantage. In addition, companies are required to maintain records accurately and fairly representing their transactions and having an adequate system of internal accounting controls. We face significant risks if we fail to comply with the FCPA and other anti-corruption and anti-bribery laws prohibiting companies and their employees and third-party intermediaries from authorizing, offering or providing, directly or indirectly, improper payments or benefits to foreign government officials, political parties and private-sector recipients for an illegal purpose.

We sell our solutions to customers around the world, including some in areas of the world that experience corruption by government officials to some degree and, in certain circumstances, compliance with anti-bribery laws may conflict with local customs and practices. In addition, changes in laws could result in increased regulatory requirements and compliance costs which could adversely affect our business, financial condition and results of operations. While we are committed to complying, and training our employees to comply, with all applicable anti-bribery and anti-corruption laws, we cannot assure our employees or other agents will not engage in prohibited conduct and render us responsible under the FCPA, the U.K. Bribery Act or other anti-bribery and anti-corruption laws.

If we are found to be in violation of the FCPA, the U.K. Bribery Act or other anti-bribery and anti-corruption laws (either due to acts or inadvertence of our employees, or due to the acts or inadvertence of others), we could suffer criminal or civil penalties or other sanctions, which could have an adverse effect on our business, financial condition and results of operations. Any violation of the FCPA or other applicable anti-corruption or anti-bribery laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions and, in the case of the FCPA, suspension or debarment from U.S. government contracts, which could have an adverse effect on our reputation, business, financial condition and results of operations. In addition, responding to any enforcement action may result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees.

Our business could be affected by new and evolving governmental regulations regarding the internet.

To date, laws, regulations and enforcement actions by governments have not materially restricted use of the internet in most parts of the world. However, the legal and regulatory environment relating to the internet is uncertain, and governments may impose regulation in the future. New laws may be passed, courts may issue decisions affecting the

Table of Contents

internet, existing but previously inapplicable or unenforced laws may be deemed to apply to the internet or regulatory agencies may begin to more rigorously enforce such formerly unenforced laws, or existing legal safe harbors may be narrowed, both by U.S. federal or state governments and by governments of foreign jurisdictions. The adoption of any new laws or regulations, or the narrowing of any safe harbors, could hinder growth in the use of the internet and online services generally, and decrease acceptance of the internet and online services as a means of communications, e-commerce and advertising. In addition, such changes in laws could increase our costs of doing business or prevent us from delivering our solutions over the internet or in specific jurisdictions, which could harm our business, financial condition and results of operations. For example, we rely on a variety of statutory and common-law frameworks and defenses relevant to the content available on our platform, including the Digital Millennium Copyright Act (the “DMCA”), the Communications Decency Act (the “CDA”), and fair-use doctrine in the United States and the Electronic Commerce Directive in the European Union. The DMCA limits, but does not necessarily eliminate, our potential liability for caching, hosting, listing or linking to third-party content that may include materials that infringe copyrights or other rights. The CDA further limits our potential liability for content uploaded onto our platform by third-parties. Defenses such as the fair-use doctrine (and related doctrines in other countries) may be available to limit our potential liability for featuring third-party intellectual property content for purposes such as reporting, commentary and parody. In the European Union, the Electronic Commerce Directive offers certain limitations on our potential liability for featuring third-party content. However, each of these statutes and doctrines are subject to uncertain or evolving judicial interpretation and regulatory and legislative amendments, and we cannot guarantee that such frameworks and defenses will be available. Regulators in the United States and in other countries may introduce new regulatory regimes that increase potential liability for content available on our platform, including liability for misleading, false or manipulative information, hate speech, privacy violations, copyrighted content and other types of online harm; or alternatively increase potential liability for removing content on our platform. For example, there have been various legislative and executive efforts to restrict the scope of the protections available to online platforms under Section 230 of the CDA, and current protections from liability for third-party content in the United States could decrease or change. Additionally, the European Union and the United Kingdom have enacted laws such as the Digital Services Act with respect to the moderation of illegal and harmful content on digital platforms. There are also a number of legislative proposals in the United States, at both the federal and state level, and in the European Union and the United Kingdom, that could impose new obligations in areas affecting our business, such as liability for copyright infringement and other online harm. Any new legislation may be difficult to comply with in a timely and comprehensive manner and may expose our business or customers to increased costs. If the rules, doctrines or currently available defenses change, if international jurisdictions refuse to apply protections similar to those that are currently available in the United States or the European Union or if a court were to disagree with our application of those rules to our solutions, our potential liability for information or content created by third-parties and posted to our platform could require us to expend significant resources to try to comply with the new rules and implement additional measures to reduce our exposure to such liability or we could incur liability and our business, financial condition and results of operations could be harmed.

Governmental and regulatory policies or claims concerning the domain registration system and the internet in general, and industry reactions to those policies or claims, may cause instability in the industry and disrupt our business.

The Internet Corporation for Assigned Names and Numbers (“ICANN”) is a multi-stakeholder, private sector, not-for-profit corporation formed in 1998 for the express purposes of overseeing a number of internet related tasks, including managing the Domain Name System’s allocation of IP addresses, accreditation of domain name registrars and registries and the definition and coordination of policy development for all of these functions. ICANN has been subject to strict scrutiny by the public and governments around the world, as well as multi-governmental organizations such as the United Nations, with many of those bodies becoming increasingly interested in internet governance. Any instability in the domain name registration system may make it difficult for us to maintain our relationships with accredited domain name registrars or registries, continue to offer our existing solutions, or introduce new offerings.

Natural catastrophic events, including global pandemics, as well as man-made problems such as power disruptions, computer viruses, data security breaches and terrorism may disrupt our business.

We rely heavily on our network infrastructure and IT systems for our business operations. Unanticipated events such as a cyber attack (including illegal hacking, ransomware, phishing or criminal fraud or impersonation), earthquake, fire, flood, terrorist attack, power loss, global pandemic or other future adverse public health developments, telecommunications failure or other similar catastrophic events could cause interruptions in the availability of our platform, delays in accessing our solutions, reputational harm and loss of critical data. Such events could prevent us from providing our solutions to our customers and their users. A catastrophic event that results in the destruction or disruption of our data centers, network infrastructure or IT systems, including any errors, defects or failures in third-party services, could result in costly litigation or other claims and adversely affect our business, financial condition and results of operations. We may also need to expend significant additional resources to protect against cyber attacks or other catastrophic events or to redress problems caused by such events. Additionally, our insurance policies may not be adequate to reimburse us for losses caused by these events and we may not be able to fully collect, if at all, under these insurance policies.

Table of Contents

Our level of indebtedness could have a material adverse effect on our ability to generate sufficient cash to fulfill our obligations under such indebtedness, to react to changes in our business and to incur additional indebtedness to fund future needs.

As of June 30, 2024, we have outstanding $546.9 million aggregate principal amount of borrowings under the Term Loan and $7.3 million aggregate principal amount of borrowings under the Revolving Credit Facility (as defined above). If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures or to sell assets, seek additional capital or restructure or refinance our indebtedness. Our ability to restructure or refinance our current or future debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. We cannot assure you that our business will be able to generate sufficient levels of cash or that future borrowings or other financings will be available to us in an amount sufficient to enable us to service our indebtedness and fund our other liquidity needs. In addition, our indebtedness under the Credit Agreement (as defined above) bears interest at variable rates. Because we have variable rate debt, fluctuations in interest rates may affect our business, financial condition and results of operations.

Our Credit Agreement contains financial covenants and other restrictions on our actions that may limit our operational flexibility or otherwise adversely affect our business, financial condition and results of operations.

The terms of our Credit Agreement include a number of covenants that limit our ability to (subject to negotiated exceptions), among other things, incur additional indebtedness or issue preferred stock, incur liens on assets, enter into agreements related to mergers and acquisitions, dispose of assets or pay dividends and make distributions. The terms of our Credit Agreement may restrict our current and future operations and could adversely affect our ability to finance our future operations or capital needs. In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy and compete against companies which are not subject to such restrictions.

A failure by us to comply with the covenants specified in the Credit Agreement could result in an event of default under the agreement, which would give the lenders the right to terminate their commitments to provide additional loans under our Revolving Credit Facility and to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be immediately due and payable. If the debt under the Credit Agreement were to be accelerated, we may not have sufficient cash or be able to borrow sufficient funds to refinance the debt or sell sufficient assets to repay the debt, which could adversely affect our business, financial condition and results of operations.

Because we generally recognize revenue from annual and monthly subscriptions over the term of an agreement, downturns or upturns in sales are not immediately reflected in our full results of operations.

We offer annual and monthly subscriptions and generally recognize revenue over the term of our customers’ contracts in accordance with GAAP. Accordingly, increases in annual subscriptions during a particular period do not translate into immediate, proportional increases in revenue during such period, and a substantial portion of the revenue we recognize during a quarter is derived from deferred revenue from annual subscriptions purchased during previous quarters. Conversely, a decline in new or renewed annual subscriptions in any one quarter may not significantly reduce revenue for that quarter but could negatively affect revenue in future quarters. Accordingly, the effect of significant downturns in new or renewed sales of our solutions may not be fully reflected in our results of operations until future periods.

Our business is susceptible to risks associated with international sales and the use of our platform in various countries as well as our ability to localize our platform in such countries.

As of June 30, 2024, we had customers in over 200 countries and territories and expect to continue to expand our international operations in the future. However, international sales and the use of our platform in various countries subject us to risks that we do not generally face with respect to domestic sales. These risks include, but are not limited to:

•greater difficulty in enforcing contracts, including our terms of service and other agreements;

•lack of familiarity and burdens and complexity involved with complying with multiple, conflicting and changing foreign laws, standards, regulatory requirements, tariffs, export controls and other barriers;

•data privacy laws, which may require that customer and user data be stored and processed in a designated territory;

•differing technology standards and different strategic priorities for customers in various jurisdictions;

•weaker protection for intellectual property in certain jurisdictions;

•potentially adverse tax consequences, including the complexities of foreign value-added tax (or other tax) systems and restrictions on the repatriation of earnings;

•uncertain political and economic climates and increased exposure to global political, economic and social risks that may impact our operations or our customers’ operations and/or decrease consumer spending, including the impact of global health emergencies;

Table of Contents

•difficulties in ensuring compliance with government regulations of e-commerce and other services, which could lead to lower adoption rates;

•potentially restrictive actions by foreign governments or regulators, including actions that prevent or limit access to our platform, solutions, apps or website;

•uncertainties and instability in European and global markets and increased regulatory costs and challenges and other adverse effects caused by the United Kingdom’s withdrawal from the European Union;

•lower levels of credit card usage and increased payment risks;

•currency exchange rates;

•reduced or uncertain protection for intellectual property rights and free speech in some countries;

•new and different sources of competition; and

•restricted access to and/or lower levels of use of the internet.

These factors may cause international costs of doing business to exceed comparable domestic costs and may also require significant management attention and financial resources. Any negative impact from our international business efforts could adversely affect our business, financial condition and results of operations.

Exchange rate fluctuations may negatively affect our business, financial condition and results of operations.

Our business, financial condition and results of operations are affected by fluctuations due to changes in foreign currency exchange rates. While we generate the majority of our revenue in U.S. dollars, a portion of our revenue is denominated in Euros. For the six months ended June 30, 2024, 71.5% of our revenue was denominated in U.S. dollars and 28.5% of our revenue was denominated in Euros. As we expand globally, we will be further exposed to fluctuations in currency exchange rates to the extent that the revenue that we generate in currencies other than the U.S. dollar increases. Furthermore, currency exchange rates have been especially volatile in the recent past, and these currency fluctuations have made and may continue to make it difficult for us to accurately predict our results of operations.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our business, financial condition and results of operations.

With sales in various countries, we are subject to taxation in several jurisdictions around the world with increasingly complex tax laws, the application of which can be uncertain. The amount of taxes paid in these jurisdictions could increase substantially as a result of changes in the applicable tax principles, including increased tax rates, new tax laws or revised interpretations of existing tax laws and precedents, which could have an adverse impact on our liquidity and results of operations.

Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

•changes in the valuation of deferred tax assets and liabilities;

•expected timing and amount of the release of any tax valuation allowances;

•tax effects of stock-based compensation;

•expiration of, or unfavorable changes to, research and development tax credit laws;

•costs related to intercompany restructurings;

•changes in tax laws, regulations or interpretations thereof; or

•future earnings being lower than anticipated in countries that have lower statutory tax rates and higher than anticipated earnings in countries that have higher statutory tax rates.

The determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment by management, and there are transactions where the ultimate tax determination is uncertain. Although we believe that our estimates are reasonable, the ultimate tax outcome may differ from the amount recorded in our condensed consolidated financial statements and may materially affect our financial results in the period or periods for which such determination is made.

Our corporate structure and associated transfer pricing policies consider the functions, risks and assets of the various entities involved in the intercompany transactions. If two or more affiliated companies are located in different countries, the tax laws or regulations of each country generally will require that transfer prices be the same as those between unrelated companies dealing at arm’s length. If tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arm’s length transactions, they could require us to adjust our transfer prices and thereby reallocate income to reflect these revised transfer prices, which could result in a higher tax liability. Our financial statements could fail to reflect adequate reserves to cover such a contingency.

Table of Contents

In addition, the authorities in several jurisdictions could review our tax returns and impose additional tax, interest and penalties, which could have an impact on us and our business, financial condition and results of operations.

We may be subject to additional obligations to collect and remit sales tax and other taxes. We may be subject to tax liability for past sales, which could harm our business, financial condition and results of operations.

State, local and foreign jurisdictions have differing tax rules and regulations governing sales, use, value-added, digital services, and other taxes, and these rules and regulations are subject to varying interpretations that may change over time. In particular, the applicability of such taxes to our platform in various jurisdictions is unclear. These jurisdictions’ rules regarding tax nexus are complex and vary significantly. Significant judgment is required on an ongoing basis to evaluate applicable tax obligations, and as a result, amounts recorded are estimates and are subject to adjustments. In many cases, the ultimate tax determination is uncertain because it is not clear how new and existing statutes might apply to our business.

One or more states, localities, the federal government or other countries may seek to impose additional reporting, record-keeping or indirect tax collection and remittance obligations on businesses like ours. An increasing number of jurisdictions have enacted laws or are considering enacting laws requiring e-commerce platforms to report user activity or collect and remit taxes on certain sales through a marketplace. Imposition of an information reporting, record-keeping or tax collection requirement could require us to incur substantial costs in order to comply, including costs associated with tax calculation, collection and remittance, which could adversely affect our business and results of operations. In some cases we also may not have sufficient notice to enable us to build systems and adopt processes to properly comply with new reporting, record-keeping or collection obligations by the effective date.

As a result, we could face tax assessments and audits. Our liability for these taxes and associated penalties could exceed our historical tax accruals. Jurisdictions in which we have not historically collected or accrued sales, use, value-added or other taxes could assert our liability for such taxes. A successful assertion that we should be collecting additional taxes in jurisdictions where we have not historically done so could result in substantial tax liabilities for past sales. Furthermore, certain jurisdictions have introduced a digital services tax, which is generally a tax on gross revenue generated from users or customers located in those jurisdictions, and other jurisdictions have enacted or are considering enacting similar laws. Further, even where we are collecting and remitting taxes to the appropriate authorities, we may fail to accurately calculate, collect, report and remit such taxes. Any of these events could result in substantial tax liabilities and related penalties for past sales. It could also discourage customers from using our platform or otherwise harm our business, financial condition and results of operations.

We have recorded in the past a full valuation allowance on our net deferred tax assets since it is more likely than not that these benefits will not be realized. Future adjustments to the realizability of our deferred tax assets may have a material impact on our financial condition and results of operations.

Determining whether a valuation allowance for deferred tax assets is appropriate requires significant judgment and an evaluation of all positive and negative evidence. We assess the need for, or the sufficiency of, a valuation allowance against deferred tax assets at each reporting period. In making such an assessment, significant weight is given to evidence that can be objectively verified. New facts and circumstances, future financial results, and new tax legislation, among other factors, may require us to reevaluate our valuation allowance positions which could potentially affect our effective tax rate.

We continue to monitor the likelihood that we will be able to recover our deferred tax assets, including those for which a valuation allowance is recorded. There can be no assurance that our deferred tax assets will be fully realized. The determination to record or reverse a valuation allowance is subject to objective factors that cannot be readily predicted in advance and may have a material impact on our financial condition and results of operations.

If there are fluctuations in our effective tax rate due to changes in tax laws or regulations, we could suffer adverse tax and other financial consequences.

New tax laws or regulations could be enacted at any time, and existing tax laws or regulations could be interpreted, modified or applied in a manner that adversely affects our tax rates and therefore our results of operations and financial condition.

Legislation commonly referred to as the Tax Cuts and Jobs Act, which was enacted in December 2017, significantly reformed the U.S. Internal Revenue Code of 1986, as amended. The Tax Cuts and Jobs Act lowered U.S. federal corporate income tax rates, changed the utilization of future net operating loss carryforwards, allowed for the expensing of certain capital expenditures, eliminated the option to currently deduct research and development expenditures and requires taxpayers to capitalize and amortize U.S.-based and non-U.S.-based research and development expenditures over five and fifteen years, respectively, and put into effect significant changes to United States taxation of international business activities. It is possible that changes under the Tax Cuts and Jobs Act could increase our future tax liability.

On August 16, 2022, the United States enacted the Inflation Reduction Act (the “IRA”), which among other provisions, introduced a 15% minimum tax on the adjusted financial statement income of certain large corporations and a nondeductible 1% excise tax on the net value of certain share repurchases made after December 31, 2022 by covered

Table of Contents

corporations. As of January 1, 2023, the Company began recording excise taxes related to share repurchases in additional paid in capital in the condensed consolidated balance sheet.

The Organization for Economic Co-operation and Development (the "OECD") has issued recommendations that, in some cases, make substantial changes to numerous long-standing tax positions and principles.

In December 2021, the OECD proposed the Pillar Two framework as part of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project which makes changes to existing tax laws, including a 15% global minimum tax (“BEPS Pillar Two”). Several countries have enacted tax legislation with proposals from the BEPS Pillar Two framework, with an effective date starting in 2024. We are continuing to evaluate the impacts of enacted legislation and pending legislation to enact BEPS Pillar Two in the non-US tax jurisdictions in which we operate.

If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

The Sarbanes-Oxley Act requires, among other things, that we assess the effectiveness of our internal control over financial reporting annually and the effectiveness of our disclosure controls and procedures quarterly. In particular, Section 404 of the Sarbanes-Oxley Act (“Section 404”), requires us to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on, and our independent registered public accounting firm to attest to, the effectiveness of our internal control over financial reporting. Our compliance with applicable provisions of Section 404 requires that we incur substantial accounting expenses and expend significant management time on compliance-related issues as we implement additional corporate governance practices and comply with reporting requirements.

As we mature, we will need to further develop our internal control systems and procedures to keep pace with our rapid growth and we are currently working to improve our controls. Our current controls and any new controls that we develop may become inadequate because, among other reasons, they may not keep pace with our growth or the conditions in our business may change.

We have made, and will continue to make, changes to our financial management control systems and other areas to manage our obligations as a public company, including corporate governance, corporate controls, disclosure controls and procedures and financial reporting and accounting systems.

If we fail to maintain effective systems, controls and procedures, including disclosure controls and internal controls over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations and prevent fraud could be adversely impacted. Moreover, we may have to disclose in periodic reports we file with the SEC material weaknesses in our system of internal controls. The existence of a material weakness would preclude management from concluding that our internal controls over financial reporting are effective, and would preclude our independent auditors from issuing an unqualified opinion that our internal controls over financial reporting are effective. We may also experience higher than anticipated operating expenses during and after the implementation of these changes.

If we are unable to implement any of the changes to our internal control over financial reporting effectively or efficiently or are required to do so earlier than anticipated, it could adversely affect our business, financial condition and results of operations. Additionally, we do not expect that our internal control systems, even if timely and well established, will prevent all errors and all fraud. Internal control systems, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

Our management team has limited experience managing a public company.

Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public company that is subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm our business, financial condition and results of operations.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the New York Stock Exchange (“NYSE”) on which our Class A common stock is traded and other applicable securities rules and regulations. The SEC and other regulators have continued to adopt new rules and regulations and make additional changes to existing regulations that require our compliance. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact, in ways we cannot currently anticipate, the manner in which we operate our business. We expect that compliance with these rules and regulations will continue to cause us to incur additional

Table of Contents

accounting, legal and other expenses that we did not incur as a private company. Any failure by us to file our periodic reports with the SEC in a timely manner could harm our reputation and reduce the trading price of our Class A common stock. We also anticipate that we will continue to incur costs associated with corporate governance requirements, including requirements under securities laws, as well as rules and regulations implemented by the SEC and the NYSE. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, while also diverting some of management’s time and attention from revenue-generating activities. Furthermore, these rules and regulations could make it more difficult or more costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. In addition, if we fail to comply with these rules and regulations, we could be subject to a number of penalties, including the delisting of our Class A common stock, fines, sanctions or other regulatory action or civil litigation.

Risks Related to Ownership of our Class A Common Stock

The trading price of our Class A common stock may be volatile and could decline significantly and rapidly regardless of our operating performance.

The trading price of our Class A common stock may be volatile and subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including:

•the number of shares of our Class A common stock made available for trading;

•sales or expectations with respect to sales of shares of our Class A common stock by holders of our Class A common stock;

•actual or anticipated fluctuations in our business, financial condition and results of operations;

•variance in our financial performance from expectations of securities analysts;

•changes in our revenue;

•announcements by us or our competitors of significant business developments, acquisitions or new offerings;

•our involvement in any litigation;

•our sale of our Class A common stock or other securities in the future;

•changes in senior management or key personnel;

•the trading volume of our Class A common stock;

•changes in the anticipated future size and growth rate of our market; and

•general economic, regulatory and market conditions.

Recently, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial costs and divert our management’s attention.

None of our stockholders are party to any contractual restrictions on transfer. Sales of substantial amounts of our Class A common stock in the public markets, or the perception that sales might occur, could cause the trading price of our Class A common stock to decline.

In addition to the supply and demand and volatility factors discussed above, sales of a substantial number of shares of our Class A common stock into the public market, particularly sales by our Founder, directors, executive officers and principal stockholders, or the perception that these sales might occur in large quantities, could cause the trading price of our Class A common stock to decline.

None of our security holders are subject to any contractual restriction on the transfer or sale of their shares.

In addition, certain of our stockholders have rights, subject to some conditions, to require us to file registration statements for the public resale of their Class A common stock or to include such shares in registration statements that we may file for us or other stockholders. Any registration statement we file to register additional shares, whether as a result of registration rights or otherwise, could cause the trading price of our Class A common stock to decline or be volatile.

The multi-class structure of our common stock has the effect of concentrating voting control with those stockholders who hold our Class B common stock, including our Founder and Chief Executive Officer. This will limit or preclude

Table of Contents

your ability to influence corporate matters, including the election of directors, amendments to our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions requiring stockholder approval.

Our Class A common stock has one vote per share and our Class B common stock has ten votes per share. The multi-class structure of our common stock has the effect of concentrating voting control with our Class B common stockholders. As of June 30, 2024, Mr. Casalena holds a majority of the voting power of our outstanding capital stock. As a result, Mr. Casalena will have control over most matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. He may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. Corporate actions might be taken even if other stockholders oppose them. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control or other liquidity event of our company, could deprive our stockholders of an opportunity to receive a premium for their shares of Class A common stock as part of a sale or other liquidity event and might ultimately affect the trading price of our Class A common stock. Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, which will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term.

Pursuant to our amended and restated certificate of incorporation, we are authorized to issue 1,000,000,000 shares of Class C common stock and as of June 30, 2024, there is no Class C common stock outstanding. Although we have no current plans to issue any shares of Class C common stock in the future, we may issue shares of Class C common stock for a variety of corporate purposes, including financings, acquisitions, investments, dividends and equity incentives to our employees, consultants and directors. Under our amended and restated certificate of incorporation, our board of directors has the authority, without stockholder approval except as required by the listing standards of the NYSE, to issue additional shares of our capital stock. Because the Class C common stock carries no voting rights, is not convertible into any other capital stock and is not listed for trading on an exchange or registered for sale with the SEC, shares of Class C common stock may be less liquid and less attractive to any future recipients of these shares than shares of Class A common stock, although we may seek to list the Class C common stock for trading and register shares of Class C common stock for sale in the future. In addition, because our Class C common stock carries no voting rights and is not counted when determining whether the seven percent ownership threshold related to automatic conversion of the Class B common stock is met, if we issue shares of Class C common stock in the future, the holders of our Class B common stock, including our Founder and Chief Executive Officer, may be able to elect all of our directors and to determine the outcome of most matters submitted to a vote of our stockholders for a longer period of time than would be the case if we issued Class A common stock rather than Class C common stock in such transactions. In addition, if we issue shares of Class C common stock in the future, such issuances would have a dilutive effect on the economic interests of our Class A common stock and Class B common stock.

We cannot predict the impact our capital structure may have on our stock price.

We cannot predict whether our multi-class structure will result in a lower or more volatile market price of our Class A common stock, in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes. S&P, Dow Jones and FTSE Russell have each announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500. These changes exclude companies with multiple classes of shares of common stock from being added to these indices. In addition, several stockholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the multi-class structure of our capital stock may prevent the inclusion of our Class A common stock in these indices and may cause stockholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for our Class A common stock. Any actions or publications by stockholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the trading price of our Class A common stock.

The multi-class structure of our common stock additionally has the effect of concentrating voting control with our Class B common stockholders, including our Founder and Chief Executive Officer. This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, takeover, or other business combination involving us that you, as a stockholder, may otherwise support, and could allow us to take actions that some of our stockholders do not view as beneficial, which could reduce the trading price of our Class A common stock. Furthermore, this concentrated control could also discourage a potential investor from acquiring our Class A common stock due to the limited voting power of such stock relative to the Class B common stock and might harm the trading price of our Class A common stock. Any issuance of Class C common stock could also cause the trading price of our Class A common stock to decline.

We do not intend to pay dividends on our capital stock for the foreseeable future.

We do not currently anticipate paying dividends on our capital stock. Any declaration and payment of future dividends to holders of our capital stock will be at the discretion of our board of directors and will depend on many factors, including our financial condition, earnings, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends, the provisions of Delaware law affecting the payment of dividends and distributions to stockholders and other considerations that our board of directors deems relevant. In addition, the terms of

Table of Contents

the Credit Agreement currently limit our ability to pay dividends and future agreements governing our indebtedness may similarly limit our ability to pay dividends. Consequently, your only opportunity to achieve a return on your investment in our company will be if the trading price of our Class A common stock appreciates and you sell your shares at a profit. There is no guarantee that the price of our Class A common stock in the market will ever exceed the price that you paid for your shares.

Anti-takeover provisions contained in our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the trading price of our Class A common stock.

Our amended and restated certificate of incorporation and our amended and restated bylaws contain provisions that could delay or prevent a change in control of our company. These provisions could also make it more difficult for stockholders to elect directors and take other corporate actions. These provisions include:

•our multi-class common stock structure, which provides holders of our Class B common stock with the ability to significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding common stock;

•our stockholders are only able to take action at a meeting of stockholders and not by written consent;

•special meetings of our stockholders may be called only by a majority of our board of directors, the chairperson of our board of directors or our chief executive officer;

•advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders;

•certain amendments to our amended and restated certificate of incorporation or our amended and restated bylaws require the approval of at least 661∕3% of the then-outstanding voting power of our capital stock;

•our amended and restated bylaws provide that certain litigation against us can only be brought in Delaware; and

•authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our common stock.

These and other provisions in our amended and restated certificate of incorporation and our amended and restated bylaws and under Delaware law could discourage potential takeover attempts, reduce the price investors might be willing to pay in the future for shares of our Class A common stock and result in the trading price of our Class A common stock being lower than it would be without these provisions.

Our amended and restated certificate of incorporation contains exclusive forum provisions for certain claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a duty (including any fiduciary duty) owed by any of our current or former directors, officers, stockholders, employees or agents to us or our stockholders; (iii) any action asserting a claim against us or any of our current or former directors, officers, stockholders, employees or agents arising out of or relating to any provision of the General Corporation Law of the State of Delaware or our amended and restated certificate of incorporation or our amended and restated bylaws; or (iv) any action asserting a claim against us or any of our current or former directors, officers, stockholders, employees or agents governed by the internal affairs doctrine of the State of Delaware.

This provision, however, does not apply to suits brought to enforce any duty or liability created by the Securities Act of 1933, as amended (the "Securities Act") or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or rules and regulations thereunder. The federal district courts of the United States of America will, to the fullest extent permitted by law, be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act or the Exchange Act. Accordingly, while there can be no assurance that federal or state courts will determine that our exclusive forum provision should be enforced in a particular case, suits brought by our stockholders to enforce any duty or liability created by the Securities Act must be brought in federal court and cannot be brought in state court.

Our investors are deemed to have notice of and consented to these forum provisions, provided, however, that stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. These provisions may limit our stockholders’ ability to bring a claim in a judicial forum they find favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees and agents. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

Table of Contents

General Risk Factors

Our business, financial condition and results of operations may differ from any projections that we disclose or any information that may be attributed to us by third-parties.

From time to time, we may provide guidance via public disclosures regarding our projected business, financial condition or results of operations. However, any such projections involve risks, assumptions and uncertainties, and our actual results could differ materially from such projections. Factors that could cause or contribute to such differences include, but are not limited to, those identified in these Risk Factors, some or all of which are not predictable or in our control. Other unknown or unpredictable factors also could adversely impact our performance, and we undertake no obligation to update or revise any projections, whether as a result of new information, future events or otherwise. In addition, various news sources, bloggers and other publishers often make statements regarding our historical or projected business or financial performance, and you should not rely on any such information even if it is attributed directly or indirectly to us.

If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our Class A common stock adversely, the trading price of our Class A common stock and trading volume could decline.

The trading market for our Class A common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do not control these analysts. If any of the analysts who cover us downgrade our Class A common stock or our industry, or the stock of any of our competitors, or publish inaccurate or unfavorable research about our business, the price of our Class A common stock may decline. If analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price or trading volume of our Class A common stock to decline and our Class A common stock to be less liquid.

Additional issuances of our stock could result in significant dilution to our stockholders.

Additional issuances of our stock, exercise of options or vesting of RSUs will result in dilution to existing holders of our capital stock. The amount of dilution could be substantial depending upon the size of the issuance, exercise or vesting. As part of our business strategy, we may acquire or make investments in companies, products or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the trading price of our Class A common stock to decline.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The table below provides information with respect to repurchases of shares of our Class A common stock during the three months ended June 30, 2024 (in thousands, except share and per share data):


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs (in thousands)
April 1 - 30	151,682	$	36.56	151,682	483,754
May 1 - 31	1,900	34.00		1,900	483,689
June 1 - 30	—	—		—	483,689
Total	153,582	$	36.53	153,582	$	483,689

__________________

(1) On May 10, 2022, the board of directors authorized a general share repurchase program of the Company’s Class A common stock of up to $200.0 million, with no fixed expiration. On February 26, 2024, the board of directors authorized a new general share repurchase program of the Company's Class A common stock of up to $500.0 million with no fixed expiration to replace the previous repurchase plan. These Class A common stock repurchases may occur in the open market, through privately negotiated transactions, through block purchases, other purchase techniques including the establishment of one or more plans under Rule 10b5-1 of the Securities Exchange Act of 1934 or by any combination of such methods. The timing and actual amount of shares repurchased will depend on a variety of different factors and may be modified, suspended or terminated at any time at the discretion of the board of directors.

(2) Average price paid per share includes costs associated with the repurchases.

Item 3. Defaults upon Senior Securities

Not applicable.

Table of Contents

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended June 30, 2024, no director or officer, as defined in Section 16 of the Securities Exchange Act of 1934, of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

Table of Contents

Item 6. Exhibits

Incorporated by Reference

Exhibit No.

Exhibit Title

Form

File Number

Exhibit

Filing Date

10.1

Agreement and Plan of Merger, dated as of May 13, 2024, by and among Squarespace, Inc., Spaceship Purchaser, Inc. and Spaceship Group Merger C o Inc.

8-K

001-40393

2.1

May 13, 2024

10.2

S upport Agreement, dated as of May 13, 2024, by and amo ng Squarespace, Inc., Anthony Casalena, An th ony Casalena 2019 Family Trust, Anthony Casalena Rev ocable Trust, Casalena Foundation, and Spaceship Purchas er, Inc.

8-K

001-40393

10.1

May 13, 2024

10.3

S upport Agree ment, dated as of May 13, 2024, by and among Squarespace, Inc., General Atlantic (SQRS II), L.P. and Spaceship Purchase r, Inc.

8-K

001-4093

10.2

May 13, 2024

10.4

S upport Agreement, dated as of May 13, 2024, by and among Squarespace, Inc., Accel Leaders 3 L.P. and affiliated funds, and Spaceship Purchaser, Inc.

8-K

001-40393

10.3

May 13, 2024

31.1*

Certification of the Registrant’s Principal Executive Officer pursuant to Exchange Act Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of the Registrant’s Principal Financial Officer pursuant to Exchange Act Rule 13a-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1#

Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.1 NS*

XBRL Instance Document

101.SCH*

XBRL Taxonomy Extension Schema Document.

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*

XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

__________________

* Filed herewith.

† Indicates a management contract or compensatory plan.

# The certifications furnished in Exhibit 32.1 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Squarespace, Inc.

Date: August 2, 2024	By:	/s/ Anthony Casalena
		Anthony Casalena Chief Executive Officer (Principal Executive Officer)

Date: August 2, 2024	By:	/s/ Nathan Gooden
		Nathan Gooden Chief Financial Officer (Principal Financial Officer)

Exhibit 31.1

Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

I, Anthony Casalena, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Squarespace, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 2, 2024



/s/ Anthony Casalena
Anthony Casalena
Chief Executive Officer
(Principal Executive Officer)

Exhibit 31.2

Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

I, Nathan Gooden, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Squarespace, Inc.;

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 2, 2024



/s/ Nathan Gooden
Nathan Gooden
Chief Financial Officer
(Principal Financial Officer)

Exhibit 32.1

Certifications Of Principal Executive Officer And Chief Accounting Officer Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002

In connection with the Quarterly Report of Squarespace, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: August 2, 2024

By:

/s/ Anthony Casalena

Anthony Casalena

Chief Executive Officer

(Principal Executive Officer)

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: August 2, 2024

By:

/s/ Nathan Gooden

Nathan Gooden

Chief Financial Officer

(Principal Financial Officer)

Cover	6 Months Ended
Cover	Jun. 30, 2024 shares
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	001-40393
Entity Registrant Name	SQUARESPACE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-0375811
Entity Address, Address Line One	225 Varick Street
Entity Address, Address Line Two	12th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10014
City Area Code	646
Local Phone Number	580-3456
Title of 12(b) Security	Title of each classClass A Common Stock, 0.0001 par value per share
Trading Symbol	SQSP
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Amendment Flag	false
Entity Central Index Key	0001496963
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	90,630,649
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	47,844,755
Class C Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding	0

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 270,363	$ 257,702
Restricted cash	0	36,583
Investment in marketable securities	52,041	0
Accounts receivable	41,384	24,894
Due from vendors	0	6,089
Prepaid expenses and other current assets	83,016	48,947
Total current assets	446,804	374,215
Property and equipment, net	49,609	58,211
Operating lease right-of-use assets	61,016	77,764
Goodwill	196,522	210,438
Intangible assets, net	140,839	190,103
Other assets	11,560	11,028
Assets of business held for sale	94,529	0
Total assets	1,000,879	921,759
Current liabilities:
Accounts payable	21,933	12,863
Accrued liabilities	98,933	99,435
Deferred revenue	397,923	333,191
Funds payable to customers	0	42,672
Debt, current portion	57,140	48,977
Operating lease liabilities, current portion	11,281	12,640
Total current liabilities	587,210	549,778
Deferred income taxes, non-current portion	1,164	1,039
Debt, non-current portion	487,846	519,816
Operating lease liabilities, non-current portion	71,843	97,714
Other liabilities	18,940	13,764
Liabilities of business held for sale	76,745	0
Total liabilities	1,243,748	1,182,111
Commitments and contingencies (see Note 11)
Stockholders’ deficit:
Additional paid in capital	936,277	924,634
Accumulated other comprehensive loss	(1,280)	(843)
Accumulated deficit	(1,177,880)	(1,184,157)
Total stockholders’ deficit	(242,869)	(260,352)
Total liabilities and stockholders’ deficit	1,000,879	921,759
Class A Common Stock
Stockholders’ deficit:
Common stock	9	9
Class B Common Stock
Stockholders’ deficit:
Common stock	5	5
Class C Common Stock
Stockholders’ deficit:
Common stock	$ 0	$ 0

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Class A Common Stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, issued (in shares)	90,630,649	88,545,012
Common stock, outstanding (in shares)	90,630,649	88,545,012
Class B Common Stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, issued (in shares)	47,844,755	47,844,755
Common stock, outstanding (in shares)	47,844,755	47,844,755
Class C Common Stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, issued (in shares)	0	0
Common stock, outstanding (in shares)	0	0

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Revenue	$ 296,769	$ 247,529	$ 577,917	$ 484,557
Cost of revenue	82,939	43,167	163,713	86,117
Gross profit	213,830	204,362	414,204	398,440
Operating expenses:
Research and product development	69,805	61,412	136,651	119,982
Marketing and sales	88,282	75,373	205,815	177,045
General and administrative	38,873	30,909	69,696	63,249
Total operating expenses	196,960	167,694	412,162	360,276
Operating income	16,870	36,668	2,042	38,164
Interest expense	(10,157)	(8,635)	(20,538)	(16,729)
Other income, net	4,454	2,038	9,031	1,198
Income/(loss) before (provision for)/benefit from income taxes	11,167	30,071	(9,465)	22,633
(Provision for)/benefit from income taxes	(5,034)	(26,411)	15,742	(18,471)
Net income	$ 6,133	$ 3,660	$ 6,277	$ 4,162
Net income per share, basic (in dollars per share)	$ 0.04	$ 0.03	$ 0.05	$ 0.03
Net income per share, dilutive (in dollars per share)	$ 0.04	$ 0.03	$ 0.04	$ 0.03
Weighted-average shares used in computing net income per share, basic (in shares)	137,760,693	135,302,409	137,348,777	135,111,072
Weighted-average shares used in computing net income per share, dilutive (in shares)	142,143,018	138,771,613	141,419,521	138,013,454

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Net income	$ 6,133	$ 3,660	$ 6,277	$ 4,162
Other comprehensive (loss)/income
Foreign currency translation adjustment	(374)	(296)	(330)	(38)
Unrealized (loss)/gain on marketable securities, net of income taxes	(80)	0	(107)	216
Total other comprehensive (loss)/income	(454)	(296)	(437)	178
Total comprehensive income	$ 5,679	$ 3,364	$ 5,840	$ 4,340

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands	Total	Class A Common Stock	Class B Common Stock	Class C Common Stock	Common Stock Class A Common Stock	Common Stock Class B Common Stock	Common Stock Class C Common Stock	Additional Paid in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2022					87,754,534	47,844,755	0
Beginning balance at Dec. 31, 2022	$ (302,991)				$ 8	$ 5	$ 0	$ 875,737	$ (1,665)	$ (1,177,076)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	22,595							22,595
Exercised (in shares)					13,050
Stock option exercises	52							52
Vested RSUs converted to common shares (in shares)					1,357,462
Taxes paid related to net share settlement of equity awards (in shares)					(573,862)
Taxes paid related to net share settlement of equity awards	(13,369)							(13,369)
Repurchase and retirement of Class A common stock (in shares)					(1,256,170)
Repurchase and retirement of Class A common stock	(25,321)							(25,321)
Excise tax on repurchase of Class A common stock	(277)							(277)
Net income (loss)	502									502
Total other comprehensive income (loss), net of taxes	474								474
Ending balance (in shares) at Mar. 31, 2023					87,295,014	47,844,755	0
Ending balance at Mar. 31, 2023	(318,335)				$ 8	$ 5	$ 0	859,417	(1,191)	(1,176,574)
Beginning balance (in shares) at Dec. 31, 2022					87,754,534	47,844,755	0
Beginning balance at Dec. 31, 2022	(302,991)				$ 8	$ 5	$ 0	875,737	(1,665)	(1,177,076)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Repurchase and retirement of Class A common stock (in shares)		(1,256,170)
Repurchase and retirement of Class A common stock		$ (25,321)
Net income (loss)	4,162
Ending balance (in shares) at Jun. 30, 2023					87,723,667	47,844,755	0
Ending balance at Jun. 30, 2023	(291,196)				$ 8	$ 5	$ 0	883,192	(1,487)	(1,172,914)
Beginning balance (in shares) at Mar. 31, 2023					87,295,014	47,844,755	0
Beginning balance at Mar. 31, 2023	(318,335)				$ 8	$ 5	$ 0	859,417	(1,191)	(1,176,574)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	30,648							30,648
Exercised (in shares)					21,635
Stock option exercises	42							42
Vested RSUs converted to common shares (in shares)					640,562
Taxes paid related to net share settlement of equity awards (in shares)					(233,544)
Taxes paid related to net share settlement of equity awards	(6,915)							(6,915)
Repurchase and retirement of Class A common stock (in shares)		0
Net income (loss)	3,660									3,660
Total other comprehensive income (loss), net of taxes	(296)								(296)
Ending balance (in shares) at Jun. 30, 2023					87,723,667	47,844,755	0
Ending balance at Jun. 30, 2023	(291,196)				$ 8	$ 5	$ 0	883,192	(1,487)	(1,172,914)
Beginning balance (in shares) at Dec. 31, 2023		88,545,012	47,844,755	0	88,545,012	47,844,755	0
Beginning balance at Dec. 31, 2023	(260,352)				$ 9	$ 5	$ 0	924,634	(843)	(1,184,157)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	28,979							28,979
Exercised (in shares)					420,214
Stock option exercises	841							841
Vested RSUs converted to common shares (in shares)					1,808,975
Taxes paid related to net share settlement of equity awards (in shares)					(769,189)
Taxes paid related to net share settlement of equity awards	(24,022)							(24,022)
Repurchase and retirement of Class A common stock (in shares)					(320,793)
Repurchase and retirement of Class A common stock	(12,164)							(12,164)
Excise tax on repurchase of Class A common stock	284							284
Net income (loss)	144									144
Total other comprehensive income (loss), net of taxes	17								17
Ending balance (in shares) at Mar. 31, 2024					89,684,219	47,844,755	0
Ending balance at Mar. 31, 2024	(266,273)				$ 9	$ 5	$ 0	918,552	(826)	(1,184,013)
Beginning balance (in shares) at Dec. 31, 2023		88,545,012	47,844,755	0	88,545,012	47,844,755	0
Beginning balance at Dec. 31, 2023	$ (260,352)				$ 9	$ 5	$ 0	924,634	(843)	(1,184,157)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercised (in shares)	1,030,422
Taxes paid related to net share settlement of equity awards (in shares)					(1,069,635)
Taxes paid related to net share settlement of equity awards								(37,284)
Repurchase and retirement of Class A common stock (in shares)		(474,375)
Repurchase and retirement of Class A common stock		$ (16,311)
Net income (loss)	$ 6,277
Ending balance (in shares) at Jun. 30, 2024		90,630,649	47,844,755	0	90,630,649	47,844,755	0
Ending balance at Jun. 30, 2024	(242,869)				$ 9	$ 5	$ 0	936,277	(1,280)	(1,177,880)
Beginning balance (in shares) at Mar. 31, 2024					89,684,219	47,844,755	0
Beginning balance at Mar. 31, 2024	(266,273)				$ 9	$ 5	$ 0	918,552	(826)	(1,184,013)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	33,390							33,390
Exercised (in shares)					610,208
Stock option exercises	1,744							1,744
Vested RSUs converted to common shares (in shares)					790,250
Taxes paid related to net share settlement of equity awards (in shares)					(300,446)
Taxes paid related to net share settlement of equity awards	(13,262)							(13,262)
Repurchase and retirement of Class A common stock (in shares)		(153,582)			(153,582)
Repurchase and retirement of Class A common stock	(4,147)	$ (4,147)						(4,147)
Excise tax on repurchase of Class A common stock	0							0
Net income (loss)	6,133									6,133
Total other comprehensive income (loss), net of taxes	(454)								(454)
Ending balance (in shares) at Jun. 30, 2024		90,630,649	47,844,755	0	90,630,649	47,844,755	0
Ending balance at Jun. 30, 2024	$ (242,869)				$ 9	$ 5	$ 0	$ 936,277	$ (1,280)	$ (1,177,880)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
OPERATING ACTIVITIES:
Net income	$ 6,277	$ 4,162
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	36,885	14,477
Stock-based compensation	60,965	51,605
Deferred income taxes	125	124
Non-cash lease income	(1,757)	(989)
Other	625	310
Changes in operating assets and liabilities:
Accounts receivable and due from vendors	(15,697)	2,364
Prepaid expenses and other current assets	(35,545)	(1,480)
Accounts payable and accrued liabilities	29,784	9,822
Deferred revenue	69,012	38,030
Funds payable to customers	(4,943)	(2,131)
Other operating assets and liabilities	117	408
Net cash provided by operating activities	145,848	116,702
INVESTING ACTIVITIES:
Proceeds from the sale and maturities of marketable securities	1,000	39,664
Purchases of marketable securities	(52,856)	(7,824)
Purchase of property and equipment	(6,074)	(7,167)
Net cash (used in)/provided by investing activities	(57,930)	24,673
FINANCING ACTIVITIES:
Principal payments on debt	(24,488)	(20,379)
Payments for repurchase and retirement of Class A common stock	(16,311)	(25,321)
Taxes paid related to net share settlement of equity awards	(37,640)	(20,318)
Proceeds from exercise of stock options	2,585	134
Net cash used in financing activities	(75,854)	(65,884)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(513)	165
Increase in cash, cash equivalents and restricted cash, including cash classified as assets of business held for sale	11,551	75,656
Less: Increase in cash, cash equivalents and restricted cash classified as assets of business held for sale	(35,473)	0
Net (decrease)/increase in cash, cash equivalents and restricted cash	(23,922)	75,656
Cash, cash equivalents and restricted cash at the beginning of the period	294,285	232,620
Cash, cash equivalents and restricted cash at the end of the period	270,363	308,276
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	270,363	274,004
Restricted cash	0	34,272
Cash, cash equivalents, and restricted cash at the end of the period	270,363	308,276
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
Cash paid during the year for interest	19,883	16,360
Cash paid during the year for income taxes, net of refunds	31,231	22,902
Cash paid for amounts included in the measurement of operating lease liabilities	8,124	7,861
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCE ACTIVITIES
Purchases of property and equipment included in accounts payable and accrued liabilities	295	196
Capitalized stock-based compensation	$ 1,404	$ 1,638

Description of Business	6 Months Ended
Description of Business	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of Business Business Squarespace, Inc. and its subsidiaries (the “Company”) is a leading all-in-one platform for businesses and independent creators to build an online presence, grow their brands and manage their businesses across the internet. The Company offers websites, domains, e-commerce, tools for managing a social media presence, marketing tools, scheduling and hospitality services. The Company is headquartered in New York, NY, with additional offices operating in Chicago, IL, Dublin, Ireland and Aveiro, Portugal. Proposed Merger On May 13, 2024, the Company entered into a definitive agreement to go private with an affiliate of Permira, a global investment firm, in an all-cash transaction valued at approximately $6,900,000 on an enterprise value basis (the "Proposed Merger"). Specifically, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Spaceship Purchaser, Inc., a Delaware corporation (“Parent”), and Spaceship Group MergerCo, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”, and together with Parent, the “Buyer Parties”), providing for the merger of Merger Sub with and into the Company, with the Company surviving such merger as a wholly owned subsidiary of Parent (the “Merger”). Under the terms of the Merger Agreement, each share of the Company's common stock outstanding as of immediately prior to the effective time of the Merger (the "Effective Time"), other than shares owned by the Company and certain shares owned by affiliates of Anthony Casalena, affiliates of General Atlantic and affiliates of Accel, will be cancelled and extinguished and automatically converted into the right to receive cash in an amount equal to $44.00, without interest thereon and subject to any applicable withholding taxes. If the Merger is consummated, the Company's Class A common stock will be de-listed from the New York Stock Exchange and de-registered under the Securities Exchange Act of 1934, as amended. The Merger Agreement contains customary representations, warranties, and covenants. Consummation of the Merger is subject to receipt of regulatory approvals and certain other conditions set forth in the Merger Agreement, including, but not limited to, (i) the affirmative vote of the holders of a majority in voting power of the outstanding shares of the Company's common stock beneficially owned, directly or indirectly, by Company stockholders not affiliated with Anthony Casalena, General Atlantic, Accel, Permira or the directors and officers of the Company; (ii) the accuracy of the representations and warranties of the Company in the Merger Agreement, subject to applicable materiality or other qualifiers, as of certain dates set forth in the Merger Agreement; (iii) the Company having performed and complied in all material respects with all covenants under the Merger Agreement required to be performed and complied with by it at or prior to the closing of the Merger; (iv) receipt by the Buyer Parties of a customary closing certificate of the Company; and no Company material adverse effect having occurred after the date of the Merger Agreement; and (v) no order, injunction or judgment issued by any governmental authority preventing the consummation of the Merger being in effect, nor shall any action have been taken by any such governmental authority, and no statute, rule, regulation or order having been enacted, entered, enforced or deemed applicable to the Merger that, in each case, prohibits, makes illegal, or enjoins the consummation of the Merger. The Company's Board of Directors unanimously authorized, adopted and approved the Merger Agreement. Upon satisfaction of these and other customary closing conditions, the transaction is expected to close by the fourth quarter of 2024. The Company cannot predict with certainty, however, whether and when all of the required closing conditions will be satisfied or if the Merger will close. The Merger Agreement contains certain termination rights for the Buyer Parties. Upon termination of the Merger Agreement under specified circumstances, including the Company terminating the Merger Agreement to enter into an alternative acquisition agreement with respect to a superior proposal in accordance with the Merger Agreement or Parent terminating the Merger Agreement due to a recommendation change as defined in the Merger Agreement, in each case, pursuant to and in accordance with a customary "fiduciary out" provision in the Merger Agreement, the Company will be required to pay Parent a termination fee of $198,700. The $198,700 termination fee will also be payable by the Company concurrently with the consummation of an acquisition transaction if the Merger Agreement is terminated under certain circumstances and prior to such termination, an acquisition proposal for an acquisition transaction has been made to the Company or has been publicly announced, proposed, disclosed or otherwise communicated and not withdrawn or otherwise abandoned and within 12 months after the termination any acquisition transaction is consummated or the Company enters into an agreement providing for any acquisition transaction. The Merger Agreement also contains certain termination rights for the Company. Upon termination of the Merger Agreement under specified circumstances, Parent will be required to pay the Company a termination fee of approximately $231,817. In addition to the foregoing termination rights, and subject to certain limitations, the Company or Parent may terminate the Merger Agreement if the Merger is not consummated by May 12, 2025. Also on May 13, 2024, in connection with the execution of the Merger Agreement, Parent has delivered (a) equity commitment letters between Parent and the financing sources identified therein, pursuant to which such financing sources have committed, subject to the terms and conditions contained therein, to invest in Parent, directly or indirectly, the cash amounts set forth therein (the “Equity Commitment Letters”) and (b) a debt commitment letter executed by the financing sources identified therein, pursuant to which such financing sources have committed, subject to the terms and conditions contained therein, to provide Parent with debt financing in the amounts specified therein (the “Debt Commitment Letter”). The proceeds of the Equity Commitment Letters and the Debt Commitment Letter are intended to fund the merger consideration payable in the Merger, on the terms and subject to the conditions set forth therein. The Company is an express limited third party beneficiary of certain rights in the Equity Commitment Letters, on the terms and subject to the conditions set forth therein. Additionally, on May 13, 2024, in connection with the execution of the Merger Agreement, Parent has delivered a fee funding agreement in favor of the Company and pursuant to which, on the terms and subject to the conditions contained therein, certain investors affiliated with Permira are agreeing to pay a portion of certain obligations of the Buyer Parties in connection with the Merger Agreement. The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete, and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, which is attached as Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on May 13, 2024 and incorporated by reference herein. The Company's transaction expenses associated with the negotiation of the Merger Agreement were $4,198 and were included in general and administrative expenses in the condensed consolidated statements of operations for the three and six months ended June 30, 2024. The Merger Agreement did not otherwise impact the Company’s condensed consolidated financial statements as of June 30, 2024. Acquisitions On September 7, 2023, the Company closed an asset purchase agreement with Google LLC ("Google") to acquire, among other things, Google's domain assets, including all domain names for which Google was the registrar or reseller, for a total amount paid of $180,721 (the "Google Domains Asset Acquisition").

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

Use of Estimates

Concentration of Risks Related to Credit, Interest Rates and Foreign Currencies

Cash and Cash Equivalents

Restricted Cash and Payment Processing Transactions

See “Note 4. Business Held for Sale” for further information on assets and liabilities classified as held for sale as of June 30, 2024.

The following table represents the assets and liabilities related to payment processing transactions for restaurant reservations, to-go orders and events:


	June 30, 2024		December 31, 2023
Restricted cash	$	32,685	$	36,583
Due from vendors	5,044		6,089
Total payment processing assets	37,729		42,672
Funds payable to customers	(37,729)		(42,672)
Total payment processing liabilities	(37,729)		(42,672)
Total payment processing transactions, net	$	—	$	—

Investment in Marketable Securities

cost basis are also included in other income, net in the condensed consolidated statements of operations. The cost of securities sold is based upon the specific identification method.

Fair Value of Financial Instruments

The three-level hierarchy for fair value measurements is defined as follows:

Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets;

Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Business Held for Sale

Net Income/(Loss) Per Share

Basic net income/(loss) per share is computed by dividing net income/(loss) by the weighted-average number of shares of the Company’s Class A, Class B and Class C common stock outstanding.

Recently Issued Accounting Pronouncements

Accounting Pronouncements Pending Adoption

Revenue

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue

Presence

Commerce

Revenue by Product Type, Subscription Type and Revenue Recognition Pattern

The following tables summarize revenue by product type, subscription type, and revenue recognition pattern for the periods presented:


	Three Months Ended June 30, 2024						Six Months Ended June 30, 2024
	Presence		Commerce		Total		Presence		Commerce		Total
Subscription revenue
Transferred over time	$	207,548	$	62,162	$	269,710	$	401,594	$	123,361	$	524,955
Transferred at a point in time	6,936		—		6,936		12,925		—		12,925
Non-subscription revenue
Transferred over time	802		1,040		1,842		1,532		1,968		3,500
Transferred at a point in time	87		18,194		18,281		206		36,331		36,537
Total revenue	$	215,373	$	81,396	$	296,769	$	416,257	$	161,660	$	577,917


	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
	Presence		Commerce		Total		Presence		Commerce		Total
Subscription revenue
Transferred over time	$	167,335	$	56,807	$	224,142	$	326,915	$	110,863	$	437,778
Transferred at a point in time	3,857		—		3,857		8,001		—		8,001
Non-subscription revenue
Transferred over time	822		832		1,654		1,421		1,727		3,148
Transferred at a point in time	60		17,816		17,876		128		35,502		35,630
Total revenue	$	172,074	$	75,455	$	247,529	$	336,465	$	148,092	$	484,557

Revenue by Geography

Revenue by geography is based on the customer’s self-reported country identifier or, if not available, the billing address or IP address, and was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
United States	$	212,424	$	177,195	$	413,459	$	346,949
International	84,345		70,334		164,458		137,608
Total revenue	$	296,769	$	247,529	$	577,917	$	484,557

Currently no individual country contributes greater than 10% of total international revenue.

Deferred Revenue

Capitalized Contract Costs

Assets capitalized related to contract costs consisted of the following:


	June 30, 2024		December 31, 2023
Capitalized referral fees, current	$	7,624	$	7,626
Capitalized referral fees, non-current	10,429		9,715
Capitalized app fees, current	733		750
Sales commissions, current (1)	60		496
Sales commissions, non-current (2)	83		144
Total capitalized contract costs	$	18,929	$	18,731

________________

Amortization of capitalized contract costs was included in the following line items in the condensed consolidated statements of operations:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	734	$	848	$	1,483	$	1,709
Marketing and sales	2,411		2,513		5,004		4,580
Total amortization of capitalized contract costs	$	3,145	$	3,361	$	6,487	$	6,289

There were no impairment charges recognized related to capitalized contract costs for the three and six months ended June 30, 2024 and 2023.

Obligations for Returns, Refunds and Other Similar Obligations

Business Held For Sale

6 Months Ended

Jun. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Business Held For Sale

Business Held for Sale

Business held for sale comprised of the following assets and liabilities as of June 30, 2024:


	June 30, 2024
Cash and cash equivalents	$	2,788
Restricted cash	32,685
Accounts receivable, net	274
Due from vendors	5,044
Prepaid expenses and other current assets	1,567
Property and equipment, net	7,268
Operating lease right-of-use assets	9,925
Goodwill	13,916
Intangible assets, net	20,689
Other assets	373
Total assets of business held for sale	$	94,529

Accounts payable	$	1,160
Accrued liabilities	19,157
Deferred revenue	63
Funds payable to customers	37,729
Operating lease liabilities, current portion	1,326
Operating lease liabilities, non-current portion	17,310
Total liabilities of business held for sale	$	76,745

Investment in Marketable Securities

6 Months Ended

Jun. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Investment in Marketable Securities

The following table represents the amortized cost, gross unrealized gains and losses and fair market value of the Company’s available-for-sale (“AFS”) marketable securities as of June 30, 2024:


	June 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Aggregate Fair Value
Corporate bonds and commercial paper	$	40,359	$	—	$	(72)	$	40,287
U.S. treasuries	11,789		—		(35)		11,754
Total investment in marketable securities	$	52,148	$	—	$	(107)	$	52,041


	June 30, 2024
	Less than 12 months				12 months or Greater				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Corporate bonds and commercial paper	$	39,948	$	(72)	$	—	$	—	$	39,948	$	(72)
U.S. treasuries	11,633		(35)		—		—		11,633		(35)
Total investment in marketable securities	$	51,581	$	(107)	$	—	$	—	$	51,581	$	(107)

The contractual maturities of the investments classified as marketable securities were as follows:


	June 30, 2024
Due within 1 year	$	31,136
Due in 1 year through 5 years	20,905
Total investment in marketable securities	$	52,041

The Company did not own any AFS marketable securities as of December 31, 2023.

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

A summary of the Company’s investments in marketable securities (including, if applicable, those marketable securities classified as cash and cash equivalents) were as follows:


	June 30, 2024
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	214,495	$	—	$	—	$	214,495
Available-for-sale debt securities
Corporate bonds and commercial paper	—		40,287		—		40,287
U.S. treasuries	11,754		—		—		11,754
Total	$	226,249	$	40,287	$	—	$	266,536


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	194,210	$	—	$	—	$	194,210
Total	$	194,210	$	—	$	—	$	194,210

Prepaid Expenses and Other Current Assets

6 Months Ended

Jun. 30, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


	June 30, 2024		December 31, 2023
Prepaid income taxes	$	52,667	$	3,402
Prepaid operational expenses (1)	11,383		12,183
Capitalized contract costs (2)	8,417		8,872
Prepaid domain name registration fees	6,864		12,073
Prepaid advertising expenses	312		5,804
Other current assets (3)	3,373		6,613
Total prepaid expenses and other current assets	$	83,016	$	48,947

__________________

Accrued Liabilities

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities consisted of the following:


	June 30, 2024		December 31, 2023
Accrued product expenses	35,565		22,569
Accrued marketing expenses (1)	24,395		24,998
Accrued indirect taxes (2)	$	22,931	$	38,174
Accrued payroll expenses (3)	3,001		4,247
Other accrued expenses (4)	13,041		9,447
Total accrued liabilities	$	98,933	$	99,435

__________________

Debt

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Debt

Debt outstanding as of June 30, 2024 and December 31, 2023 was as follows:


	June 30, 2024		December 31, 2023
Term Loan	$	546,910	$	571,398
Less: unamortized original issue discount	(1,301)		(1,761)
Less: unamortized deferred financing costs	(623)		(844)
Less: debt, current	(57,140)		(48,977)
Total debt, non-current	$	487,846	$	519,816

Credit Facility

Scheduled Principal Payments

The scheduled principal payments required under the terms of the Credit Facility are as follows:


Year Ending December 31,	Amount
Remainder of 2024	$	24,488
2025	522,422
Total	$	546,910

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2024
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes For interim periods, the Company uses the estimated annual effective tax rate method under which the Company determines its (provision for)/benefit from income taxes based on the current estimate of its annual effective tax rate plus the tax effect of discrete items occurring during the period. The estimated annual effective tax rate is based on forecasted annual results which may fluctuate due to significant changes in the forecasted or actual results and any other transaction that results in differing tax treatment. For the three months ended June 30, 2024 and 2023, the Company recorded an income tax expense of $5,034 and $26,411, respectively, which resulted in an effective tax rate of (45.1)% and (87.8)%, respectively. For the six months ended June 30, 2024 and 2023, the Company recorded an income tax benefit of $15,742 and an income tax expense of $18,471, respectively, which resulted in an effective tax rate of (166.3)% and (81.6)%, respectively. The Company’s estimated annual effective income tax rate for the three and six months ended June 30, 2024 differed from the statutory rate of 21% primarily due to the change in the valuation allowance for deferred tax assets related primarily to the capitalization of research and development expenditures as required by the 2017 Tax Cuts and Jobs Act, nondeductible executive compensation, unrecognized tax benefits, state and local income taxes, and nondeductible stock-based compensation, partially offset by research and development tax credits, windfall from stock-based compensation, deduction from foreign-derived intangible income, and the effect of foreign operations. The Company’s estimated annual effective income tax rate for the three and six months ended June 30, 2023 differed from the statutory rate of 21% primarily due to the change in the valuation allowance for deferred tax assets related primarily to the capitalization of research and development expenditures, nondeductible executive compensation, unrecognized tax benefits, state and local income taxes, and global intangible low-taxes income, partially offset by research and development tax credits, deduction from foreign-derived intangible income, and the effect of foreign operations. As of June 30, 2024, the Company considered a significant portion of the earnings of foreign subsidiaries to be not permanently reinvested outside the U.S. The incremental deferred federal and state income taxes or foreign withholding taxes were not material to the condensed consolidated financial statements as those respective earnings have previously been subject to U.S. taxation or will receive a dividend received deduction. All unrecognized tax benefits have been recorded to other liabilities in the condensed consolidated balance sheets. As of June 30, 2024, unrecognized tax benefits approximated $13,237, all of which would affect the effective tax rate if recognized. As of June 30, 2023, the Company had unrecognized tax benefits of $12,928, of which $12,771 would affect the effective tax rate if recognized. Of the $12,928 of the unrecognized tax benefits as of June 30, 2023, $12,771 was recorded to other liabilities and the remaining balance was recorded as a reduction in the gross deferred tax assets, offset by a corresponding reduction in the valuation allowance. The Company does not believe that its unrecognized tax benefits as of June 30, 2024 will significantly increase or decrease within the next twelve months. The increase was primarily due to tax positions taken during the current and prior periods. The Company is unable to reasonably estimate the timing of long-term payments or the amount by which the liability will increase or decrease. The Company believes that its unrecognized tax benefits as of June 30, 2024 will decrease by approximately $533 within the next twelve months due to expiring statutes of limitation. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the Company's (provision for)/benefit from income taxes. Accrued interest and penalties were $1,487 and $497 as of June 30, 2024 and 2023, respectively, and were included in other liabilities in the condensed consolidated balance sheets. The Company’s corporate federal income tax returns for the years ended December 31, 2020 through December 31, 2023 remain subject to examination by the Internal Revenue Service. The Company’s corporate income tax returns for the years ended December 31, 2020 through December 31, 2023 remain subject to examination by taxing authorities in various U.S. states and foreign jurisdictions. In addition, in the U.S., any net operating losses or credits that were generated in prior years but utilized in open years may also be subject to examination. In December 2021, the OECD proposed the Pillar Two framework as part of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project which makes changes to existing tax laws, including a 15% global minimum tax (“BEPS Pillar Two”). Several countries have enacted tax legislation with proposals from the BEPS Pillar Two framework, with an effective date starting in 2024. While we continue to monitor further legislation and guidance in the non-US jurisdictions in which we operate, we have evaluated the impact of the published legislation and although not material to the condensed consolidated financial statements, we have included the impacts in the estimated annual effective tax rate for the three and six months ended June 30, 2024. On December 15, 2022, the Ireland Finance Act 2022 was signed into Irish law. With the enactment of the Ireland Finance Act 2022, qualifying Ireland-related research and development tax credits do not depend on the generation of future taxable income. As a result, the Company determined these credits to be a credit to research and development expenses in the form of a government grant as analogized under International Accounting Standards 20, Accounting for Government Grants and Disclosure of Government Assistance. The Company recognized Ireland-related research and development tax credits of $306 and $482 during the three and six months ended June 30, 2024, respectively, and $338 and $614 during the three and six months ended June 30, 2023, respectively, as a reduction to research and product development in the condensed consolidated statements of operations.

Commitment and Contingencies

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Indirect Taxes

Service Agreements


Year Ending December 31,	Amount
Remainder of 2024	$	11,186
2025	24,658
2026	28,567
2027	29,467
2028	4,508
Total	$	98,386

Certain Risks and Concentrations

Other

Leases

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Leases

The components of operating lease expense, net recognized in the condensed consolidated statements of operations were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating lease costs
Operating lease costs	$	3,034	$	3,417	$	6,372	$	6,872
Variable lease costs	865		850		1,737		1,614
Short-term lease costs	55		67		108		142
Operating lease income
Sublease income	$	—	$	129	$	67	$	311
Total operating lease expense, net	$	3,954	$	4,205	$	8,150	$	8,317

As of June 30, 2024, maturities of operating lease liabilities were as follows:


Year Ending December 31,	Amount
Remainder of 2024	$	7,079
2025	14,448
2026	15,115
2027	14,518
2028	14,674
Thereafter	27,675
Total operating lease payments	93,509
Less: imputed interest	(10,385)
Total operating lease liabilities (1)	$	83,124

__________________

Stockholders’ Deficit	6 Months Ended
Stockholders’ Deficit	Jun. 30, 2024
Equity [Abstract]
Stockholders’ Deficit	Stockholders’ Deficit Class A Common Stock Each holder of shares of Class A common stock shall be entitled to one vote for each share held. As of June 30, 2024, the number of authorized shares of Class A common stock, par value $0.0001 per share, by the Company was 1,000,000,000. On May 10, 2022, the board of directors authorized a general share repurchase program of the Company’s Class A common stock of up to $200,000. On February 26, 2024, the board of directors authorized a new general share repurchase program of the Company’s Class A common stock of up to $500,000 with no fixed expiration (the "Stock Repurchase Plan") to replace the previous repurchase plan. These Class A common stock repurchases may occur in the open market, through privately negotiated transactions, through block purchases, other purchase techniques including the establishment of one or more plans under Rule 10b5-1 of the Securities Exchange Act of 1934 or by any combination of such methods. The timing and actual amount of shares repurchased will depend on a variety of different factors and may be modified, suspended or terminated at any time at the discretion of the board of directors. During the three and six months ended June 30, 2024, the Company repurchased 153,582 and 474,375 shares and paid cash of $4,147 and $16,311, including commissions of $2 and $9, respectively, under the Stock Repurchase Plan through open market purchases. The weighted-average prices per share for the share repurchases were $36.53 and $34.36 during the three and six months ended June 30, 2024, respectively. During the three months ended June 30, 2023, the Company did not repurchase shares under the Stock Repurchase Plan through open market purchases. During the six months ended June 30, 2023, the Company repurchased 1,256,170 shares and paid cash of $25,321, including commissions of $25, under the Stock Repurchase Plan through open market purchases. The weighted-average price per share for the share repurchase was $22.04. As of June 30, 2024, approximately $483,689 remained available for stock repurchase pursuant to the Stock Repurchase Plan. Class B Common Stock Each holder of shares of Class B common stock shall be entitled to ten votes for each share held. Each outstanding share of the Company's Class B common stock is convertible into one share of Class A common stock at any time. As of June 30, 2024, the number of authorized shares of Class B common stock, par value $0.0001 per share, by the Company was 100,000,000. Class C Common Stock The Company's Class C common stock has no voting rights and is not convertible into shares of Class A common stock or Class B common stock. As of June 30, 2024, the number of authorized shares of Class C common stock, par value $0.0001 per share, by the Company was 1,000,000,000. The board of directors has the authority, without stockholder approval except as required by the NYSE, to issue shares of the Company's Class C common stock. Dividends The Company shall not declare or pay dividends on Class A common stock, Class B common stock or Class C common stock unless the same dividend or distribution with the same record date and payment dated shall be declared or paid on all shares of Class A, Class B and Class C common stock. During the three and six months ended June 30, 2024 and 2023, the Company did not declare or pay any dividends.

Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss activity for the three and six months ended June 30, 2024 and 2023 was as follows:


	Foreign Currency Translation Adjustments		Net Unrealized Losses on Marketable Securities		Total Accumulated Other Comprehensive Loss
Balance at December 31, 2023	$	(843)	$	—	$	(843)
Other comprehensive income/(loss) before reclassifications	44		(27)		17
Other comprehensive income/(loss)	44		(27)		17
Balance at March 31, 2024	$	(799)	$	(27)	$	(826)
Other comprehensive loss before reclassifications	(374)		(80)		(454)
Other comprehensive loss	(374)		(80)		(454)
Balance at June 30, 2024	$	(1,173)	$	(107)	$	(1,280)


	Foreign Currency Translation Adjustments		Net Unrealized (Losses)/Gains on Marketable Securities		Total Accumulated Other Comprehensive Loss
Balance at December 31, 2022	$	(1,449)	$	(216)	$	(1,665)
Other comprehensive income before reclassifications	258		216		474
Other comprehensive income	258		216		474
Balance at March 31, 2023	$	(1,191)	$	—	$	(1,191)
Other comprehensive loss before reclassifications	(296)		—		(296)
Other comprehensive loss	(296)		—		(296)
Balance at June 30, 2023	$	(1,487)	$	—	$	(1,487)

Amounts reclassified out of accumulated other comprehensive loss, net of taxes, during the three and six months ended June 30, 2024 and 2023 were not material.

Stock-based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

Stock Options

Squarespace, Inc. Amended and Restated 2008 Equity Incentive Plan

A summary of the Company’s stock option activity for the 2008 Plan during the six months ended June 30, 2024 is as follows:


	Number of Options	Weighted- Average Exercise Price
As of December 31, 2023	1,117,616	$	2.56
Exercised	(1,030,422)	2.51
Expired	(1)	1.82
As of June 30, 2024	87,193	$	3.13
Vested at June 30, 2024	87,193	$	3.13
Exercisable at June 30, 2024	87,193	$	3.13

Restricted Stock Units ("RSUs") and Performance Stock Units ("PSUs")

Squarespace, Inc. 2017 Equity Incentive Plan

Squarespace, Inc. 2021 Equity Incentive Plan

A summary of the Company’s RSU and PSU activity during the six months ended June 30, 2024, is as follows:


	Number of Share Units	Weighted Average Grant Date Fair Value Per Share Unit
Outstanding – December 31, 2023	10,025,607	$28.31
Granted	4,832,302	32.57
Vested	(2,599,225)	28.61
Forfeited	(733,200)	29.91
Outstanding – June 30, 2024	11,525,484	$29.92

Casalena Performance Award

Stock-based Compensation

The classification of stock-based compensation by line item in the condensed consolidated statements of operations was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	2,026	$	1,549	$	3,795	$	2,601
Research and product development	19,025		15,650		34,675		26,337
Marketing and sales	3,590		3,045		6,801		4,916
General and administrative	8,157		9,235		15,694		17,751
Total stock-based compensation	$	32,798	$	29,479	$	60,965	$	51,605

Related Party Transactions	6 Months Ended
Related Party Transactions	Jun. 30, 2024
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions On September 1, 2014, the Company entered into an agreement with Getty Images to resell certain content to the Company’s customers. A member of the Company’s board of directors is a Co-Founder and board member of Getty Images. Amounts recorded in connection with this agreement were not material for the three and six months ended June 30, 2024 and 2023. On May 13, 2024, in connection with the Merger Agreement, the Company entered into support agreements with the Company's Chief Executive Officer, Anthony Casalena, and certain other affiliates of the Company, affiliates of General Atlantic and affiliates of Accel (together, the "Affiliated Buyer Parties"). As of June 30, 2024, there are no amounts recorded in the condensed consolidated financial statements for transactions between the Company and the Affiliated Buyer Parties. See "Note 1. Description of Business" for further information on the Proposed Merger.

Net Income per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Net Income per Share

The following table sets forth the computation of basic and diluted net income per share:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net income	$	6,133	$	3,660	$	6,277	$	4,162
Denominator:
Weighted-average shares used in computing net income per share, basic	137,760,693		135,302,409		137,348,777		135,111,072
Effect of dilutive securities	4,382,325		3,469,204		4,070,744		2,902,382
Weighted-average shares used in computing net income per share, diluted	142,143,018		138,771,613		141,419,521		138,013,454
Net income per share, basic	$	0.04	$	0.03	$	0.05	$	0.03
Net income per share, diluted	$	0.04	$	0.03	$	0.04	$	0.03


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Stock options	—	—	—	—
RSUs and PSUs	164,135	683,691	227,044	1,109,292
Total	164,135	683,691	227,044	1,109,292

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net income (loss)	$ 6,133	$ 144	$ 3,660	$ 502	$ 6,277	$ 4,162

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation and Consolidation	Basis of Presentation and Consolidation The Company’s condensed consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and include the Company’s wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. The condensed balance sheet data as of December 31, 2023 was derived from the Company's audited financial statements but does not include all disclosures required by U.S. GAAP. Therefore, these unaudited, condensed, consolidated financial statements and accompanying notes should be read in conjunction with the Company's annual consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K filed with the SEC on February 28, 2024. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information.
Use of Estimates	Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Management’s estimates are based on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Significant estimates include but are not limited to (i) the inputs used in the valuation of acquired intangible assets; (ii) the inputs used in the quantitative assessment over goodwill impairment; (iii) the recognition, measurement and valuation of current and deferred income taxes; (iv) amount of applicable indirect tax nexus in different jurisdictions and associated indirect tax liabilities; and (v) the incremental borrowing rate for operating lease liabilities. The Company evaluates its assumptions and estimates on an ongoing basis and adjusts prospectively, if necessary.
Concentration of Risks Related to Credit, Interest Rates and Foreign Currencies	Concentration of Risks Related to Credit, Interest Rates and Foreign Currencies The Company is subject to credit risk, interest rate risk on its outstanding indebtedness, market risk on investments and foreign currency risk in connection with the Company’s operations internationally. The Company maintains the components of its cash and cash equivalents balance in various accounts, which from time to time exceed the federal depository insurance coverage limit. In addition, substantially all cash and cash equivalents, as well as marketable securities, are held by four financial institutions. The Company has not experienced any concentration losses related to its cash, cash equivalents and marketable securities to date. During the three and six months ended June 30, 2024 and 2023, no single customer accounted for more than 10% of the Company’s revenue. As of June 30, 2024 and December 31, 2023, one customer accounted for 30% and 37%, respectively, of the Company's accounts receivable. The Company is also subject to foreign currency risks that arise from normal business operations. Foreign currency risks include the translation of local currency and intercompany balances established in local customer currencies sold through the Company’s international subsidiaries.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents are stated at fair value. The Company considers all highly liquid investments purchased with an original maturity date of 90 days or less from the date of original purchase to be cash equivalents. Interest income on cash and cash equivalents was $2,634 and $5,617 for the three and six months ended June 30, 2024, respectively, and $1,472 and $2,534 for the three and six months ended June 30, 2023, respectively, and was included in other income, net in the condensed consolidated statements of operations.
Restricted Cash and Payment Processing Transactions	Restricted Cash and Payment Processing Transactions The Company holds funds and processes certain payments on behalf of its customers consisting of prepayments for restaurant reservations, to-go orders and events. While the Company does not have any contractual obligations to hold such cash as restricted, the prepayments have been historically included in restricted cash in the condensed consolidated balance sheets. As of June 30, 2024, these prepayments were included in assets of business held for sale in the condensed consolidated balance sheet. In addition, the Company historically recognized the liability due to its customers in funds payable to customers in the condensed consolidated balance sheets. As of June 30, 2024, these liabilities were included in liabilities of business held for sale in the condensed consolidated balance sheet. The Company remits funds to customers based on the stipulated contract terms. In addition to restricted cash held on behalf of its customers, the Company recognizes in-transit receivables from certain third-party vendors which assist in processing and settling payment transactions due to a clearing period before the related cash is received or settled. In-transit receivables have been historically included in due from vendors in the condensed consolidated balance sheets. As of June 30, 2024, these in-transit receivables were included in assets of business held for sale in the condensed consolidated balance sheet.
Investment in Marketable Securities	Investment in Marketable Securities The Company classifies its investment in marketable securities as available for sale securities which are stated at fair value, as determined by quoted market prices. Unrealized gains and losses are included in accumulated other comprehensive loss in the condensed consolidated balance sheets. Unrealized losses are evaluated for impairment and those considered other than temporarily impaired are included in other income, net in the condensed consolidated statements of operations. Subsequent gains or losses realized upon redemption or sale of these securities in excess or below their adjusted cost basis are also included in other income, net in the condensed consolidated statements of operations. The cost of securities sold is based upon the specific identification method. The Company considers all of its investment in marketable securities, irrespective of the maturity date, as available for use in current operations, and therefore classifies these securities within current assets in the condensed consolidated balance sheet.
Fair Value of Financial Instruments	Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement, describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The three-level hierarchy for fair value measurements is defined as follows: Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2 Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; and Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Business Held for Sale	Business Held for Sale The Company classifies assets and liabilities to be disposed of by sale ("disposal group") as held for sale when (i) management commits to a plan to sell the disposal group; (ii) the disposal group is available for immediate sale in its present condition; (iii) an active program required to complete the plan to sell the disposal group has been initiated; (iv) the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale, within one year; (v) the disposal group is for sale at a price that is reasonable in relation to its current fair value; and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Once classified as held for sale, depreciation and amortization of the long-lived assets included in the disposal group cease and the disposal group is measured at the lower of its carrying value or fair value less costs to sell. If the disposal group constitutes a business in accordance with ASC Topic 805, Business Combinations, the Company allocates a portion of its reporting unit's goodwill to the disposal group on a relative fair value basis.
Net Income/(Loss) Per Share	Net Income/(Loss) Per Share The Company computes net income/(loss) per share under the two-class method required for multiple classes of common stock. The rights, including the liquidation and dividend rights, of the Class A, Class B and Class C common stock are substantially identical, other than voting rights. Accordingly, the Class A, Class B and Class C common stock share in the Company’s earnings. Basic net income/(loss) per share is computed by dividing net income/(loss) by the weighted-average number of shares of the Company’s Class A, Class B and Class C common stock outstanding. Diluted net income per share is computed by giving effect to all dilutive securities. During periods of net loss, potentially dilutive Class A, Class B and Class C common stock equivalents are excluded from the calculation as their effect is anti-dilutive. During periods of net income, diluted net income per share is computed by dividing net income by the resulting weighted-average number of fully diluted Class A, Class B and Class C common stock outstanding.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements Accounting Pronouncements Pending Adoption In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). This standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis, with early adoption permitted. The Company is currently evaluating the timing of its adoption of this standard and the impact in its condensed consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosure (“ASU 2023-09”). This standard provides transparency to income tax disclosures related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 for public entities on a prospective or retrospective basis, with early adoption permitted. The Company is currently evaluating the timing of its adoption of this standard and the impact in its condensed consolidated financial statements.

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Schedule of Assets and Liabilities Related to Payment Processing Transactions

The following table represents the assets and liabilities related to payment processing transactions for restaurant reservations, to-go orders and events:


	June 30, 2024		December 31, 2023
Restricted cash	$	32,685	$	36,583
Due from vendors	5,044		6,089
Total payment processing assets	37,729		42,672
Funds payable to customers	(37,729)		(42,672)
Total payment processing liabilities	(37,729)		(42,672)
Total payment processing transactions, net	$	—	$	—

Revenue (Tables)

6 Months Ended

Jun. 30, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Revenue by Product Type, Subscription Type and Revenue Recognition Pattern

The following tables summarize revenue by product type, subscription type, and revenue recognition pattern for the periods presented:


	Three Months Ended June 30, 2024						Six Months Ended June 30, 2024
	Presence		Commerce		Total		Presence		Commerce		Total
Subscription revenue
Transferred over time	$	207,548	$	62,162	$	269,710	$	401,594	$	123,361	$	524,955
Transferred at a point in time	6,936		—		6,936		12,925		—		12,925
Non-subscription revenue
Transferred over time	802		1,040		1,842		1,532		1,968		3,500
Transferred at a point in time	87		18,194		18,281		206		36,331		36,537
Total revenue	$	215,373	$	81,396	$	296,769	$	416,257	$	161,660	$	577,917


	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
	Presence		Commerce		Total		Presence		Commerce		Total
Subscription revenue
Transferred over time	$	167,335	$	56,807	$	224,142	$	326,915	$	110,863	$	437,778
Transferred at a point in time	3,857		—		3,857		8,001		—		8,001
Non-subscription revenue
Transferred over time	822		832		1,654		1,421		1,727		3,148
Transferred at a point in time	60		17,816		17,876		128		35,502		35,630
Total revenue	$	172,074	$	75,455	$	247,529	$	336,465	$	148,092	$	484,557

Schedule of Revenue by Geography

Revenue by geography is based on the customer’s self-reported country identifier or, if not available, the billing address or IP address, and was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
United States	$	212,424	$	177,195	$	413,459	$	346,949
International	84,345		70,334		164,458		137,608
Total revenue	$	296,769	$	247,529	$	577,917	$	484,557

Schedule of Capitalized Contract Costs

Assets capitalized related to contract costs consisted of the following:


	June 30, 2024		December 31, 2023
Capitalized referral fees, current	$	7,624	$	7,626
Capitalized referral fees, non-current	10,429		9,715
Capitalized app fees, current	733		750
Sales commissions, current (1)	60		496
Sales commissions, non-current (2)	83		144
Total capitalized contract costs	$	18,929	$	18,731

________________

Amortization of capitalized contract costs was included in the following line items in the condensed consolidated statements of operations:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	734	$	848	$	1,483	$	1,709
Marketing and sales	2,411		2,513		5,004		4,580
Total amortization of capitalized contract costs	$	3,145	$	3,361	$	6,487	$	6,289

Business Held For Sale (Tables)

6 Months Ended

Jun. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Disposal Groups, Including Discontinued Operations

Business held for sale comprised of the following assets and liabilities as of June 30, 2024:


	June 30, 2024
Cash and cash equivalents	$	2,788
Restricted cash	32,685
Accounts receivable, net	274
Due from vendors	5,044
Prepaid expenses and other current assets	1,567
Property and equipment, net	7,268
Operating lease right-of-use assets	9,925
Goodwill	13,916
Intangible assets, net	20,689
Other assets	373
Total assets of business held for sale	$	94,529

Accounts payable	$	1,160
Accrued liabilities	19,157
Deferred revenue	63
Funds payable to customers	37,729
Operating lease liabilities, current portion	1,326
Operating lease liabilities, non-current portion	17,310
Total liabilities of business held for sale	$	76,745

Investment in Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2024

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Marketable Securities

The following table represents the amortized cost, gross unrealized gains and losses and fair market value of the Company’s available-for-sale (“AFS”) marketable securities as of June 30, 2024:


	June 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Aggregate Fair Value
Corporate bonds and commercial paper	$	40,359	$	—	$	(72)	$	40,287
U.S. treasuries	11,789		—		(35)		11,754
Total investment in marketable securities	$	52,148	$	—	$	(107)	$	52,041

Schedule of Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value


	June 30, 2024
	Less than 12 months				12 months or Greater				Total
	Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses		Aggregate Fair Value		Gross Unrealized Losses
Corporate bonds and commercial paper	$	39,948	$	(72)	$	—	$	—	$	39,948	$	(72)
U.S. treasuries	11,633		(35)		—		—		11,633		(35)
Total investment in marketable securities	$	51,581	$	(107)	$	—	$	—	$	51,581	$	(107)

Schedule of Contractual Maturities

The contractual maturities of the investments classified as marketable securities were as follows:


	June 30, 2024
Due within 1 year	$	31,136
Due in 1 year through 5 years	20,905
Total investment in marketable securities	$	52,041

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Schedule of Investments in Marketable Securities

A summary of the Company’s investments in marketable securities (including, if applicable, those marketable securities classified as cash and cash equivalents) were as follows:


	June 30, 2024
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	214,495	$	—	$	—	$	214,495
Available-for-sale debt securities
Corporate bonds and commercial paper	—		40,287		—		40,287
U.S. treasuries	11,754		—		—		11,754
Total	$	226,249	$	40,287	$	—	$	266,536


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	194,210	$	—	$	—	$	194,210
Total	$	194,210	$	—	$	—	$	194,210

Prepaid Expenses and Other Current Assets (Tables)

6 Months Ended

Jun. 30, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


	June 30, 2024		December 31, 2023
Prepaid income taxes	$	52,667	$	3,402
Prepaid operational expenses (1)	11,383		12,183
Capitalized contract costs (2)	8,417		8,872
Prepaid domain name registration fees	6,864		12,073
Prepaid advertising expenses	312		5,804
Other current assets (3)	3,373		6,613
Total prepaid expenses and other current assets	$	83,016	$	48,947

__________________

Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following:


	June 30, 2024		December 31, 2023
Accrued product expenses	35,565		22,569
Accrued marketing expenses (1)	24,395		24,998
Accrued indirect taxes (2)	$	22,931	$	38,174
Accrued payroll expenses (3)	3,001		4,247
Other accrued expenses (4)	13,041		9,447
Total accrued liabilities	$	98,933	$	99,435

__________________

Debt (Tables)

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Schedule of Debt Outstanding

Debt outstanding as of June 30, 2024 and December 31, 2023 was as follows:


	June 30, 2024		December 31, 2023
Term Loan	$	546,910	$	571,398
Less: unamortized original issue discount	(1,301)		(1,761)
Less: unamortized deferred financing costs	(623)		(844)
Less: debt, current	(57,140)		(48,977)
Total debt, non-current	$	487,846	$	519,816

Schedule of Principal Payments

The scheduled principal payments required under the terms of the Credit Facility are as follows:


Year Ending December 31,	Amount
Remainder of 2024	$	24,488
2025	522,422
Total	$	546,910

Commitment and Contingencies (Tables)

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of Service Agreements


Year Ending December 31,	Amount
Remainder of 2024	$	11,186
2025	24,658
2026	28,567
2027	29,467
2028	4,508
Total	$	98,386

Leases (Tables)

6 Months Ended

Jun. 30, 2024

Leases [Abstract]

Schedule of Operating Lease Expenses

The components of operating lease expense, net recognized in the condensed consolidated statements of operations were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating lease costs
Operating lease costs	$	3,034	$	3,417	$	6,372	$	6,872
Variable lease costs	865		850		1,737		1,614
Short-term lease costs	55		67		108		142
Operating lease income
Sublease income	$	—	$	129	$	67	$	311
Total operating lease expense, net	$	3,954	$	4,205	$	8,150	$	8,317

Schedule of Maturities of Operating Lease Liabilities

As of June 30, 2024, maturities of operating lease liabilities were as follows:


Year Ending December 31,	Amount
Remainder of 2024	$	7,079
2025	14,448
2026	15,115
2027	14,518
2028	14,674
Thereafter	27,675
Total operating lease payments	93,509
Less: imputed interest	(10,385)
Total operating lease liabilities (1)	$	83,124

__________________

Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss activity for the three and six months ended June 30, 2024 and 2023 was as follows:


	Foreign Currency Translation Adjustments		Net Unrealized Losses on Marketable Securities		Total Accumulated Other Comprehensive Loss
Balance at December 31, 2023	$	(843)	$	—	$	(843)
Other comprehensive income/(loss) before reclassifications	44		(27)		17
Other comprehensive income/(loss)	44		(27)		17
Balance at March 31, 2024	$	(799)	$	(27)	$	(826)
Other comprehensive loss before reclassifications	(374)		(80)		(454)
Other comprehensive loss	(374)		(80)		(454)
Balance at June 30, 2024	$	(1,173)	$	(107)	$	(1,280)


	Foreign Currency Translation Adjustments		Net Unrealized (Losses)/Gains on Marketable Securities		Total Accumulated Other Comprehensive Loss
Balance at December 31, 2022	$	(1,449)	$	(216)	$	(1,665)
Other comprehensive income before reclassifications	258		216		474
Other comprehensive income	258		216		474
Balance at March 31, 2023	$	(1,191)	$	—	$	(1,191)
Other comprehensive loss before reclassifications	(296)		—		(296)
Other comprehensive loss	(296)		—		(296)
Balance at June 30, 2023	$	(1,487)	$	—	$	(1,487)

Stock-based Compensation (Tables)

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Option Activity

A summary of the Company’s stock option activity for the 2008 Plan during the six months ended June 30, 2024 is as follows:


	Number of Options	Weighted- Average Exercise Price
As of December 31, 2023	1,117,616	$	2.56
Exercised	(1,030,422)	2.51
Expired	(1)	1.82
As of June 30, 2024	87,193	$	3.13
Vested at June 30, 2024	87,193	$	3.13
Exercisable at June 30, 2024	87,193	$	3.13

Schedule of RSU Activity

A summary of the Company’s RSU and PSU activity during the six months ended June 30, 2024, is as follows:


	Number of Share Units	Weighted Average Grant Date Fair Value Per Share Unit
Outstanding – December 31, 2023	10,025,607	$28.31
Granted	4,832,302	32.57
Vested	(2,599,225)	28.61
Forfeited	(733,200)	29.91
Outstanding – June 30, 2024	11,525,484	$29.92

Schedule of Stock-Based Compensation

The classification of stock-based compensation by line item in the condensed consolidated statements of operations was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of revenue	$	2,026	$	1,549	$	3,795	$	2,601
Research and product development	19,025		15,650		34,675		26,337
Marketing and sales	3,590		3,045		6,801		4,916
General and administrative	8,157		9,235		15,694		17,751
Total stock-based compensation	$	32,798	$	29,479	$	60,965	$	51,605

Net Income per Share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Income per Share

The following table sets forth the computation of basic and diluted net income per share:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net income	$	6,133	$	3,660	$	6,277	$	4,162
Denominator:
Weighted-average shares used in computing net income per share, basic	137,760,693		135,302,409		137,348,777		135,111,072
Effect of dilutive securities	4,382,325		3,469,204		4,070,744		2,902,382
Weighted-average shares used in computing net income per share, diluted	142,143,018		138,771,613		141,419,521		138,013,454
Net income per share, basic	$	0.04	$	0.03	$	0.05	$	0.03
Net income per share, diluted	$	0.04	$	0.03	$	0.04	$	0.03

Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Income Per Share


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Stock options	—	—	—	—
RSUs and PSUs	164,135	683,691	227,044	1,109,292
Total	164,135	683,691	227,044	1,109,292

Description of Business (Details) - USD ($) $ / shares in Units, $ in Thousands	May 13, 2024	Sep. 07, 2023	Jun. 30, 2024
Business Acquisition [Line Items]
Early contract termination fees	$ 231,817
Google Domains APA
Business Acquisition [Line Items]
Total consideration transferred		$ 180,721
Spaceship Purchaser, Inc.
Business Acquisition [Line Items]
Cash paid for acquisition	$ 6,900,000
Business acquisition, cancellation of shares, per share amount, right to receive cash	$ 44.00
Termination fee	$ 198,700
Business acquisition cost of acquired entity transaction costs			$ 4,198

Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($) institution	Jun. 30, 2023 USD ($)	Dec. 31, 2023
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of financial institutions that hold the company's cash and cash equivalents and marketable securities \| institution			4
Interest income \| $	$ 2,634	$ 1,472	$ 5,617	$ 2,534
Customer One \| Accounts Receivable \| Customer Concentration Risk
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Concentration risk, percentage			30.00%		37.00%

Summary of Significant Accounting Policies - Assets and Liabilities Related to Payment Processing Transactions (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Restricted cash	$ 0	$ 36,583
Due from vendors	0	6,089
Funds payable to customers	0	(42,672)
Disposal Group, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Restricted cash	32,685	36,583
Due from vendors	5,044	6,089
Total payment processing assets	37,729	42,672
Funds payable to customers	(37,729)	(42,672)
Total payment processing liabilities	(37,729)	(42,672)
Total payment processing transactions, net	$ 0	$ 0

Revenue - Product Type, Subscription Type and Revenue Recognition Pattern (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Total revenue	$ 296,769	$ 247,529	$ 577,917	$ 484,557
Presence
Disaggregation of Revenue [Line Items]
Total revenue	215,373	172,074	416,257	336,465
Commerce
Disaggregation of Revenue [Line Items]
Total revenue	81,396	75,455	161,660	148,092
Subscription revenue \| Transferred over time
Disaggregation of Revenue [Line Items]
Total revenue	269,710	224,142	524,955	437,778
Subscription revenue \| Transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenue	6,936	3,857	12,925	8,001
Subscription revenue \| Presence \| Transferred over time
Disaggregation of Revenue [Line Items]
Total revenue	207,548	167,335	401,594	326,915
Subscription revenue \| Presence \| Transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenue	6,936	3,857	12,925	8,001
Subscription revenue \| Commerce \| Transferred over time
Disaggregation of Revenue [Line Items]
Total revenue	62,162	56,807	123,361	110,863
Subscription revenue \| Commerce \| Transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenue	0	0	0	0
Non-subscription revenue \| Transferred over time
Disaggregation of Revenue [Line Items]
Total revenue	1,842	1,654	3,500	3,148
Non-subscription revenue \| Transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenue	18,281	17,876	36,537	35,630
Non-subscription revenue \| Presence \| Transferred over time
Disaggregation of Revenue [Line Items]
Total revenue	802	822	1,532	1,421
Non-subscription revenue \| Presence \| Transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenue	87	60	206	128
Non-subscription revenue \| Commerce \| Transferred over time
Disaggregation of Revenue [Line Items]
Total revenue	1,040	832	1,968	1,727
Non-subscription revenue \| Commerce \| Transferred at a point in time
Disaggregation of Revenue [Line Items]
Total revenue	$ 18,194	$ 17,816	$ 36,331	$ 35,502

Revenue - Revenue by Geography (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Disaggregation of Revenue [Line Items]
Total revenue	$ 296,769	$ 247,529	$ 577,917	$ 484,557
United States
Disaggregation of Revenue [Line Items]
Total revenue	212,424	177,195	413,459	346,949
International
Disaggregation of Revenue [Line Items]
Total revenue	$ 84,345	$ 70,334	$ 164,458	$ 137,608

Revenue - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
Revenue - Narrative (Details) - USD ($)	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenue from Contract with Customer [Abstract]
Contract with customer, liability, revenues recognized	$ 98,017,000	$ 79,714,000	$ 249,283,000	$ 203,843,000
Capitalized contract cost, impairment	$ 0	$ 0	$ 0	$ 0

Revenue - Capitalized Contract Costs (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Capitalized Contract Cost [Line Items]
Capitalized contract costs	$ 8,417	$ 8,872
Capitalized contract cost, net	18,929	18,731
Held-for-Sale
Capitalized Contract Cost [Line Items]
Capitalized contract costs	776
Capitalized referral fees
Capitalized Contract Cost [Line Items]
Capitalized contract costs	7,624	7,626
Capitalized contract cost, non-current	10,429	9,715
Capitalized app fees, current
Capitalized Contract Cost [Line Items]
Capitalized contract costs	733	750
Sales commissions
Capitalized Contract Cost [Line Items]
Capitalized contract costs	60	496
Capitalized contract cost, non-current	83	$ 144
Sales commissions \| Held-for-Sale
Capitalized Contract Cost [Line Items]
Capitalized contract costs	776
Capitalized contract cost, non-current	$ 371

Revenue - Amortization of Capitalized Contract Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Capitalized Contract Cost [Line Items]
Total amortization of capitalized contract costs	$ 3,145	$ 3,361	$ 6,487	$ 6,289
Cost of revenue
Capitalized Contract Cost [Line Items]
Total amortization of capitalized contract costs	734	848	1,483	1,709
Marketing and sales
Capitalized Contract Cost [Line Items]
Total amortization of capitalized contract costs	$ 2,411	$ 2,513	$ 5,004	$ 4,580

Business Held For Sale - Narratives (Details) $ in Thousands	Jun. 21, 2024 USD ($)
Tock LLC \| Held-for-Sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture	$ 400,000

Business Held For Sale - Schedule of Disposal Groups, Including Discontinued Operations (Details) - Tock LLC - Held-for-Sale $ in Thousands	Jun. 30, 2024 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash and cash equivalents	$ 2,788
Restricted cash	32,685
Accounts receivable, net	274
Due from vendors	5,044
Prepaid expenses and other current assets	1,567
Property and equipment, net	7,268
Operating lease right-of-use assets	9,925
Goodwill	13,916
Intangible assets, net	20,689
Other assets	373
Total assets of business held for sale	94,529
Accounts payable	1,160
Accrued liabilities	19,157
Deferred revenue	63
Funds payable to customers	37,729
Operating lease liabilities, current portion	1,326
Operating lease liabilities, non-current portion	17,310
Total liabilities of business held for sale	$ 76,745

Investment in Marketable Securities - AFS Marketable Securities (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 52,148
Gross Unrealized Gains	0
Gross Unrealized Losses	(107)
Aggregate Fair Value	52,041
Corporate bonds and commercial paper
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	40,359
Gross Unrealized Gains	0
Gross Unrealized Losses	(72)
Aggregate Fair Value	40,287
U.S. treasuries
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	11,789
Gross Unrealized Gains	0
Gross Unrealized Losses	(35)
Aggregate Fair Value	$ 11,754

Investment in Marketable Securities - Gross Unrealized Losses and Fair Values (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items]
Less than 12 months, Aggregate Fair Value	$ 51,581
Less than 12 months, Gross Unrealized Losses	(107)
12 months or Greater, Aggregate Fair Value	0
12 months or Greater, Gross Unrealized Losses	0
Total, Aggregate Fair Value	51,581
Total, Gross Unrealized Losses	(107)
Corporate bonds and commercial paper
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items]
Less than 12 months, Aggregate Fair Value	39,948
Less than 12 months, Gross Unrealized Losses	(72)
12 months or Greater, Aggregate Fair Value	0
12 months or Greater, Gross Unrealized Losses	0
Total, Aggregate Fair Value	39,948
Total, Gross Unrealized Losses	(72)
U.S. treasuries
Debt Securities, Available-for-Sale, Unrealized Loss Position [Line Items]
Less than 12 months, Aggregate Fair Value	11,633
Less than 12 months, Gross Unrealized Losses	(35)
12 months or Greater, Aggregate Fair Value	0
12 months or Greater, Gross Unrealized Losses	0
Total, Aggregate Fair Value	11,633
Total, Gross Unrealized Losses	$ (35)

Investment in Marketable Securities - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2024
Investments, Debt and Equity Securities [Abstract]
Unrealized losses on available-for-sale securities	$ (80)	$ (107)

Investment in Marketable Securities - Contractual Maturities (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Investments, Debt and Equity Securities [Abstract]
Due within 1 year	$ 31,136
Due in 1 year through 5 years	20,905
Total investment in marketable securities	$ 52,041

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	$ 52,041
Total	266,536	$ 194,210
Corporate bonds and commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	40,287
U.S. treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	11,754
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	214,495	194,210
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	226,249	194,210
Level 1 \| Corporate bonds and commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	0
Level 1 \| U.S. treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	11,754
Level 1 \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	214,495	194,210
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	40,287	0
Level 2 \| Corporate bonds and commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	40,287
Level 2 \| U.S. treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	0
Level 2 \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	0	0
Level 3 \| Corporate bonds and commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	0
Level 3 \| U.S. treasuries
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale debt securities	0
Level 3 \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 0	$ 0

Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Asset Acquisition [Line Items]
Prepaid income taxes	$ 52,667	$ 3,402
Prepaid operational expenses	11,383	12,183
Capitalized contract costs	8,417	8,872
Prepaid domain name registration fees	6,864	12,073
Prepaid advertising expenses	312	5,804
Other current assets	3,373	6,613
Total prepaid expenses and other current assets	83,016	48,947
Held-for-Sale
Asset Acquisition [Line Items]
Prepaid operational expenses	699
Capitalized contract costs	776
Other current assets	92
Google Domains APA
Asset Acquisition [Line Items]
Prepaid domain name registration fees	$ 377	$ 3,895

Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Asset Acquisition [Line Items]
Accrued product expenses	$ 35,565	$ 22,569
Accrued marketing expenses	24,395	24,998
Accrued indirect taxes	22,931	38,174
Accrued payroll expenses	3,001	4,247
Other accrued expenses	13,041	9,447
Total accrued liabilities	98,933	$ 99,435
Held-for-Sale
Asset Acquisition [Line Items]
Accrued marketing expenses	115
Accrued indirect taxes	16,980
Accrued payroll expenses	1,028
Other accrued expenses	$ 1,034

Debt - Debt Outstanding (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Debt Disclosure [Abstract]
Term Loan	$ 546,910	$ 571,398
Less: unamortized original issue discount	(1,301)	(1,761)
Less: unamortized deferred financing costs	(623)	(844)
Less: debt, current	(57,140)	(48,977)
Total debt, non-current	$ 487,846	$ 519,816

Debt - Narrative (Details)	3 Months Ended	6 Months Ended
Debt - Narrative (Details)	Jun. 30, 2024 USD ($)	Jun. 30, 2024 USD ($) stepUpEvent	Jun. 30, 2023	Jun. 22, 2023	Jun. 15, 2023 USD ($)	Dec. 11, 2020 USD ($)	Dec. 12, 2019 USD ($)
Credit Agreement
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)		1.60%
Credit spread adjustment (as a percent)		0.10%	1.50%
Effective interest rate (as a percent)	6.94%	6.94%	6.70%	6.69%
Debt instrument, covenant, Indebtedness to consolidated EBITDA ratio	3.75
Debt instrument, covenant, indebtedness to consolidated EBITDA ratio, step-up amount		0.50
Debt instrument, covenant, indebtedness to consolidated EBITDA ratio, step-up, number of step-ups available \| stepUpEvent		2
Term Loan \| 2019 Credit Agreement
Line of Credit Facility [Line Items]
Maximum borrowing capacity							$ 350,000
Term Loan \| 2020 Credit Agreement
Line of Credit Facility [Line Items]
Maximum borrowing capacity						$ 550,000,000
Term Loan \| Credit Agreement
Line of Credit Facility [Line Items]
Maximum borrowing capacity					$ 650,000,000
Revolving Credit Facility \| 2019 Credit Agreement
Line of Credit Facility [Line Items]
Maximum borrowing capacity							25,000
Revolving Credit Facility \| Credit Agreement
Line of Credit Facility [Line Items]
Remaining borrowing capacity	$ 17,745,000	$ 17,745,000
Revolving Credit Facility \| Credit Agreement \| Minimum
Line of Credit Facility [Line Items]
Commitment fee percentage (as a percent)		0.20%
Revolving Credit Facility \| Credit Agreement \| Maximum
Line of Credit Facility [Line Items]
Commitment fee percentage (as a percent)		0.25%
Letter of Credit \| 2019 Credit Agreement
Line of Credit Facility [Line Items]
Maximum borrowing capacity							$ 15,000
Letter of Credit \| Credit Agreement
Line of Credit Facility [Line Items]
Line of credit outstanding	$ 7,255,000	$ 7,255,000

Debt - Scheduled Principal Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Debt Disclosure [Abstract]
Remainder of 2024	$ 24,488
2025	522,422
Term Loan	$ 546,910	$ 571,398

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
(Provision for)/benefit from income taxes	$ 5,034	$ 26,411	$ (15,742)	$ 18,471
Effective income tax rate (as a percent)	(45.10%)	(87.80%)	(166.30%)	(81.60%)
Unrecognized tax benefits	$ 13,237	$ 12,928	$ 13,237	$ 12,928
Unrecognized tax benefits that would affect the effective tax rate		12,771		12,771
Decrease in unrecognized tax benefits is reasonably possible	533		533
Accrued interest and penalties	1,487	497	1,487	497
Research and development tax credits	$ 306	$ 338	$ 482	$ 614

Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Gain Contingencies [Line Items]
Indirect tax liability	$ 22,931	$ 38,174
Indirect tax contingencies	13,943	$ 29,836
Held-for-Sale
Gain Contingencies [Line Items]
Indirect tax liability	16,980
Indirect tax contingencies	$ 16,318

Commitment and Contingencies - Service Agreements (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Remainder of 2024	$ 11,186
2025	24,658
2026	28,567
2027	29,467
2028	4,508
Total	$ 98,386

Leases - Narrative (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Leases [Abstract]
Operating lease, lease liability, decrease from lease term reassessment	$ 2,304
Operating lease, right of use asset, decrease from lease term reassessment	$ 2,102

Leases - Operating Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Operating lease costs
Operating lease costs	$ 3,034	$ 3,417	$ 6,372	$ 6,872
Variable lease costs	865	850	1,737	1,614
Short-term lease costs	55	67	108	142
Operating lease income
Sublease income	0	129	67	311
Total operating lease expense, net	$ 3,954	$ 4,205	$ 8,150	$ 8,317

Leases - Operating Lease Maturities (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Lessee, Lease, Description [Line Items]
Remainder of 2024	$ 7,079
2025	14,448
2026	15,115
2027	14,518
2028	14,674
Thereafter	27,675
Total operating lease payments	93,509
Less: imputed interest	(10,385)
Total operating lease liabilities	83,124
Held-for-Sale
Lessee, Lease, Description [Line Items]
Total operating lease liabilities	$ 18,636

Stockholders’ Deficit (Details)	3 Months Ended				6 Months Ended
Stockholders’ Deficit (Details)	Jun. 30, 2024 USD ($) $ / shares shares	Mar. 31, 2024 USD ($)	Jun. 30, 2023 shares	Mar. 31, 2023 USD ($)	Jun. 30, 2024 USD ($) vote $ / shares shares	Jun. 30, 2023 USD ($) $ / shares shares	Feb. 26, 2024 USD ($)	Dec. 31, 2023 $ / shares shares	May 10, 2022 USD ($)
Class of Stock [Line Items]
Repurchase and retirement of Class A common stock, consideration	$ (4,147,000)	$ (12,164,000)		$ (25,321,000)
Class A Common Stock
Class of Stock [Line Items]
Number of votes for each share of common stock \| vote					1
Common stock, par value (in dollars per share) \| $ / shares	$ 0.0001				$ 0.0001			$ 0.0001
Common stock, authorized (in shares) \| shares	1,000,000,000				1,000,000,000			1,000,000,000
Share repurchase program, authorized amount (up to)							$ 500,000,000		$ 200,000,000
Repurchase and retirement of Class A common stock (in shares) \| shares	(153,582)		0		(474,375)	(1,256,170)
Repurchase and retirement of Class A common stock, consideration	$ (4,147,000)				$ (16,311,000)	$ (25,321,000)
Repurchase and retirement of stock, commission expense	$ 2,000				$ 9,000	$ 25,000
Stock repurchased and retired during period, average price per share ( in dollar per shares) \| $ / shares	$ 36.53				$ 34.36	$ 22.04
Remaining authorized repurchase amount	$ 483,689,000				$ 483,689,000
Class B Common Stock
Class of Stock [Line Items]
Number of votes for each share of common stock \| vote					10
Common stock, par value (in dollars per share) \| $ / shares	$ 0.0001				$ 0.0001			$ 0.0001
Common stock, authorized (in shares) \| shares	100,000,000				100,000,000			100,000,000
Common stock, share conversion ratio					1
Class C Common Stock
Class of Stock [Line Items]
Common stock, par value (in dollars per share) \| $ / shares	$ 0.0001				$ 0.0001			$ 0.0001
Common stock, authorized (in shares) \| shares	1,000,000,000				1,000,000,000			1,000,000,000

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Total Accumulated Other Comprehensive Loss
Beginning balance	$ (266,273)	$ (260,352)	$ (318,335)	$ (302,991)	$ (260,352)	$ (302,991)
Other comprehensive income/(loss) before reclassifications	(454)	17	(296)	474
Other comprehensive income/(loss)	(454)	17	(296)	474	(437)	178
Ending balance	(242,869)	(266,273)	(291,196)	(318,335)	(242,869)	(291,196)
Total Accumulated Other Comprehensive Loss
Total Accumulated Other Comprehensive Loss
Beginning balance	(826)	(843)	(1,191)	(1,665)	(843)	(1,665)
Ending balance	(1,280)	(826)	(1,487)	(1,191)	(1,280)	(1,487)
Foreign Currency Translation Adjustments
Total Accumulated Other Comprehensive Loss
Beginning balance	(799)	(843)	(1,191)	(1,449)	(843)	(1,449)
Other comprehensive income/(loss) before reclassifications	(374)	44	(296)	258
Other comprehensive income/(loss)	(374)	44	(296)	258
Ending balance	(1,173)	(799)	(1,487)	(1,191)	(1,173)	(1,487)
Net Unrealized Losses on Marketable Securities
Total Accumulated Other Comprehensive Loss
Beginning balance	(27)	0	0	(216)	0	(216)
Other comprehensive income/(loss) before reclassifications	(80)	(27)	0	216
Other comprehensive income/(loss)	(80)	(27)	0	216
Ending balance	$ (107)	$ (27)	$ 0	$ 0	$ (107)	$ 0

Stock-based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended				6 Months Ended		79 Months Ended
	Apr. 15, 2021	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Taxes paid related to net share settlement of equity awards		$ (13,262)	$ (24,022)	$ (6,915)	$ (13,369)
Stock-based compensation		32,798		29,479		$ 60,965	$ 51,605
Stock compensation capitalized						1,404	1,638
Property and equipment, net
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation capitalized		593		1,169		1,404	1,638
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation		8,157		9,235		15,694	17,751
Additional Paid in Capital
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Taxes paid related to net share settlement of equity awards		$ (13,262)	$ (24,022)	$ (6,915)	$ (13,369)	$ (37,284)
Class A Common Stock \| Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Taxes paid related to net share settlement of equity awards (in shares)		(300,446)	(769,189)	(233,544)	(573,862)	(1,069,635)
Restricted Stock Units and Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)						4,832,302
Added by performance targets achieved (in shares)						111,738
RSUs granted, weighted average grant date fair value (in dollars per share)						$ 32.57
2008 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option grants (in shares)								0
2017 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)						4 years
RSUs granted (in shares)						0
2021 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)						4 years
2021 Equity Incentive Plan \| Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)						3 years
2021 Equity Incentive Plan \| Performance Shares \| Class A Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs granted (in shares)						349,417
2021 Equity Incentive Plan \| Performance Shares \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percent						0.00%
2021 Equity Incentive Plan \| Performance Shares \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting percent						200.00%
Casalena Performance Award \| Chief Executive Officer \| General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation		$ 1,776		$ 4,869		$ 3,551	$ 9,685
Casalena Performance Award \| RSUs and PSUs \| Class A Common Stock \| Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)						4 years
RSUs granted (in shares)	2,750,000
RSUs granted, weighted average grant date fair value (in dollars per share)	$ 30.38

Stock-based Compensation - Option Activity (Details) - $ / shares	6 Months Ended
	Jun. 30, 2024
Number of Options
Outstanding beginning balance (in shares)	1,117,616
Exercised (in shares)	(1,030,422)
Expired (in shares)	(1)
Outstanding ending balance (in shares)	87,193
Weighted- Average Exercise Price
Outstanding beginning balance (USD Per share)	$ 2.56
Exercised (USD per share)	2.51
Expired (USD per share)	1.82
Outstanding ending balance (USD Per share)	$ 3.13
Stock Options Additional Disclosures
Vested (in shares)	87,193
Exercisable (in shares)	87,193
Vested (USD per share)	$ 3.13
Exercisable (USD per share)	$ 3.13

Stock-based Compensation - RSU Activity (Details) - Restricted Stock Units and Performance Shares	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Number of Share Units
Outstanding beginning balance (in shares) \| shares	10,025,607
Granted (in shares) \| shares	4,832,302
Vested (in shares) \| shares	(2,599,225)
Forfeited (in shares) \| shares	(733,200)
Outstanding ending balance (in shares) \| shares	11,525,484
Weighted Average Grant Date Fair Value Per Share Unit
Outstanding, weighted average grant date fair value beginning balance (USD per share) \| $ / shares	$ 28.31
Granted, weighted average grant date fair value (USD per share) \| $ / shares	32.57
Vested, weighted average grant date fair value (USD per share) \| $ / shares	28.61
Forfeited, weighted average grant date fair value (USD per share) \| $ / shares	29.91
Outstanding, weighted average grant date fair value ending balance (USD per share) \| $ / shares	$ 29.92

Stock-based Compensation - Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 32,798	$ 29,479	$ 60,965	$ 51,605
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	2,026	1,549	3,795	2,601
Research and product development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	19,025	15,650	34,675	26,337
Marketing and sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	3,590	3,045	6,801	4,916
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 8,157	$ 9,235	$ 15,694	$ 17,751

Net Income per Share - Basic and Diluted Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Numerator:
Net income	$ 6,133	$ 144	$ 3,660	$ 502	$ 6,277	$ 4,162
Denominator:
Weighted-average shares used in computing net income per share, basic (in shares)	137,760,693		135,302,409		137,348,777	135,111,072
Effect of dilutive securities (in shares)	4,382,325		3,469,204		4,070,744	2,902,382
Weighted-average shares used in computing net income per share, dilutive (in shares)	142,143,018		138,771,613		141,419,521	138,013,454
Net income per share, basic (in dollars per share)	$ 0.04		$ 0.03		$ 0.05	$ 0.03
Net income per share, dilutive (in dollars per share)	$ 0.04		$ 0.03		$ 0.04	$ 0.03

Net Income per Share - Antidilutive Securities Excluded from Computation of Diluted Net Income Per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net income per share	164,135	683,691	227,044	1,109,292
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net income per share	0	0	0	0
RSUs and PSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net income per share	164,135	683,691	227,044	1,109,292

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

SQSP Squarespace Inc