Most of the company’s revenue comes from monthly and annual subscription sales
When Squarespace was founded in 2004, the idea was to give companies an easy and hassle-free way to build their websites. Of course, the internet has changed quite a bit in the last 17 years, and now the company is doing a lot more than that so that companies can grow their brands and manage their businesses all over the internet.
Squarespace’s platform offers websites, domains, e-commerce, and tools for managing a social media presence, marketing tools, and planning capabilities. Tools and features include template designs, custom domains, social integrations, SEO management, analytics, hosting, Dropbox integration, podcast support, pricing tools, and the ability to add a business to your website.
“We believe that design is not a luxury. Our beautifully designed, award-winning templates enable our clients to look professional from the start while offering extensive customization options so that no two websites look the same. This enables our customers to highlight and express their story and brand in beautiful, engaging, and consistent ways through digital channels including websites, social media, and email campaigns, ”the company wrote in its S-1 filing with the SEC .
Squarespace makes the majority of its revenue subscriptions from monthly and annual subscriptions, which accounted for $ 585.7 million, or 94.3% of total revenue of $ 621 million in 2020.
Subscription revenues are divided into two categories: presence and trade.
Income from the presence consists of subscriptions to the company’s plans that provide core functionality of the platform. Presence income also includes subscriptions to third-party software solutions, subscriptions to social media stories, and domain-managed services.
“Our intuitive design tools make it quick and easy to create a professional, mobile, desktop-friendly website, purchase a domain, and have a differentiated social media presence. Since our inception, we’ve invested aggressively in our design and creative teams A drive to create innovative, forward-thinking website designs that ensure our customers’ websites are considered the most sophisticated on the web, “the company wrote.
Income from the presence in 2020 was $ 477.8 million, or 76.9% of total revenue.
Commerce Revenue is subscriptions that provide all of the functionality of presence plans, plus additional marketing and commerce transaction tools, as well as subscriptions to the company’s planning services.
“Through our comprehensive trading solutions, we offer our customers everything they need to sell physical products, subscriptions, content or services online. Our trading functions are fully integrated into our presence products, so that no third-party tools are required,” says the S-1 of the company.
This source of income was $ 111 million, or 17.9% of all revenues.
The company also earns a small amount of non-subscription revenue, which is primarily composed of commercial transaction fees generated through revenue-sharing agreements with payment processors who process Squarespace customers’ commercial transactions. This also includes revenue from third-party services that offer Squarespace customers additional functionality.
Non-subscription revenue in 2020 was $ 32 million, or 5.1% of total revenue.
Squarespace went public on May 19 through a direct listing that opened at $ 48 per share and closed at $ 43.70 per share, down 9 percent. At the end of trading on Thursday, the company was trading at $ 54.93 per share, up 14.4% from its opening price.
Prior to going public, Squarespace had raised $ 578.5 million from investors including General Atlantic, Index Ventures, and Accel.
(Image source: sec.gov)