Q1 2022 Squarespace Inc Earnings Call
Litigation Reform Act of $19 95, which include but are not limited to statements related to our future financial performance.
These forward looking statements are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are further defined in our model.
Most recent Form 10-Q filings with the Securities and Exchange Commission any forward looking statements that we make on this call are based on assumptions.
Of this day May 12, 2022, we undertake no obligations to update these statements as a result of new information or future events, except where required by law.
I'll now turn the call over to Anthony.
Good morning. Thank you everyone for joining us today, we are quite pleased with our first quarter results, which exceeded our guidance in multiple ways.
As we provide tools like.
Everyday boot can sell anything campaign.
Which is a fantastic way to understand where square states is headed and the value we provide to our customers. Our marketing campaign centered around this concept that has delivered record impressions in the first quarter. Thank you to our marketing and creative teams for elevating the square states brand and powering our growth.
I hope you've had the opportunity to read our shareholder letter we issued this morning and take and some of the enhancements our product team has been delivering which will help us realize our long term goals for the business.
Related to our commerce offering we added new state and are encouraged by the momentum building on top.
Our unique solution for hospitality and time solid businesses.
We believe our efforts to expand our international revenue are supported by the global rollout of our everything to sell anything marketing campaign and enablement of website language translation within our platform.
One highlight coming up this summer I would like to achieve are some fundamental enhancements to our core content management system, or CMS, which will enhance square spaces core usability express ability to.
Over the next few weeks.
As always we will continue to operate square space by balancing our strong cash flow with sustainable growth both of which Marcello will cover in more detail given how we're situated we're delighted to announce that our board has approved a $200 million share repurchase program, which underscores the confidence we have in our business and our opportunities for future growth.
Lastly, I'd like to thank our solid for her leadership with square face. She has been a great partner to me, helping execute on our public listing and aligning our tactical goals with our long term priorities I'm pleased to be with us through July and we wish her the best in her next endeavor.
Now I'll pass to Marcela to share some financial highlights.
Good morning, everyone and thank you Alonso.
We are delighted to share my thoughts with you. This morning that exceeded our guidance for the first quarter of 2022.
Our strong customer retention, the adoption of higher value subscriptions and new customer additions fueled our topline with Todd.
Unlevered free cash flow outperformance demonstrates our commitment to deliver value to our shareholders. As we continue to empower our loyal customer base of $4 2 million unique subscription.
We exceeded the high end of our revenue guidance by approximately $2 8 million.
This outperformance was a result of nonrecurring drivers.
Including the accelerated delivery of new features uptalk and higher than anticipated dnb.
Increased transactional revenues signals, a growing contribution from Mccormick, which further validates our investments.
We expect these transactional revenues to increase even further when we deliver our white label payment solutions.
In 2023.
Finally from the quarterly financials that we havent presented in our shareholder letter.
We anticipate marketing and sales expenses will decrease significantly compared to Q1 in the second half of the year.
Q1 represents a high level of spend as squealing.
The year with an extension to our macro everything to sell anything campaign at the Super Bowl.
Okay.
Research and development expenses increased in Q1 athlete annualized headcount that was incorporated last year.
non-GAAP G&A expenses are increasing about $6 million year over year, mostly related to the insurance additional public company expenses.
Consolidation of stock and the amortization of added head count for 2021.
Now turning to guidance for the second quarter of 2022.
The range of $208 million to 213 million tonnes to 9% growth year.
They are already here.
As noted on our fourth quarter call, we mark the trough in <unk>.
Our year over year revenue growth comparison.
And we anticipate accelerating year over year revenue growth for the balance of 2022.
Okay.
For Q2 with project, we project, our Unlevered free cash flow to be in the range.
It's $7 million, which implies.
Singh of 16, 6% at the midpoint of the range.
Unlevered free cash flow margin is reducing Q2, mainly due to the timing.
Okay.
We are increasing our guidance for the full year 2022 for both revenue and Unlevered free cash flow.
With regards to revenue, we now expect that to be in the range of 867 million.
Again to $879 million representing 11.
Ralph.
Okay.
On our Q4 call we outlined our expectation.
As for 2022.
Today, we are executing well against our plan and we have.
Some update to these expenses as we look to the rest of the year or for the remainder of 2022.
We anticipate our non-GAAP gross margin to remain at or close to the first quarter level for the remainder of 2022, However, if our transaction.
Okay.
Four months.
Marketing and sales expenses in 'twenty.
22, we anticipate the ratio of between 32% to 35%.
Percent of the total revenue versus the previous guidance of 30% to 35%.
For research and development, we expect to 85% versus the previous guidance of 25 revenue.
This is Steve.
She is in the ways of working.
Thanks Lyne.
For G&A, we still expect that will represent approximately.
The 11% of revenue.
Yes.
No we'd be between $156 million to 169 million.
Representing an 18, 6% margin at the midpoint.
Our guidance assumes significant free cash flow leverage in the second half of 2022, as we benefit from reduced marketing and sales expenses, having preloaded much of our analyst events in the first half of <unk>.
Due to the Covid related demand.
And 2020.
However, we are very excited and confident about our ability to capitalize on the large market opportunity.
As a reminder, during the last two years, we have had a tailwind related to the pandemic and have grown our top line 27.
7% on a compound annual growth basis.
Those tailings made us even stronger with our customer base has expanded significantly and we continue to retain them.
And serve our customers with tools that help them stay in business through the pandemic.
We reached in 2024 with regards to revenue growth into the mid to high teen crossing the 1 billion Mark in revenues in 2023.
In summary, the fundamentals of our business remain which have a long operating history of profitable growth.
Consistently strong gross margins and with a large and growing customer base.
We believe the introduction of new products combined with the optimization of existing offerings will accelerate our growth in the back half of this year as we look into the future.
We now look forward to your questions. So operator, you can open the line.
Yeah.
Thank you.
Thank you very much and our first question for today comes from Matt Pfau from William Blair.
Your line is now open if you would like to proceed with your question.
Okay.
Okay, great. Thanks for taking my question guys. Just wanted to ask in terms of how the quarter progressed I think on the fourth quarter call you called out a bit of softness in January did you see any change.
Through February March and April .
Hi, Thank you for our yogurt into what we had originally expected in the quarter and what we had guided.
Elliot.
It'll veto better news coming into into March.
And so far we are pleased with them, we say growth that we have having immune subscriptions on overall, how how the final cutwater.
Yeah.
Okay, Great and then.
On top of that.
Oh go ahead, sorry, just on top of that.
<unk> is now comprised of multiple different revenue streams, each of which are kind of reacting differently too.
Different phases of the pandemic in different macro world events and so.
While we are really pleased with the quarter.
Like things like the revenue is coming in the top traded right now so youre, saying that youre seeing.
A positive effect there.
Got it.
Yes reservation fee you introduced.
Just for talk just maybe some more details on what youre seeing with that.
Positive reception.
What we're doing there is an issue.
<unk> for the booking fee covering charge stacks up to a certain amount for.
The businesses that are.
But on the other end of that so so far so good.
Yes, we are actually very.
Very pleased with the results that we have seen talk this quarter. You may have you may remember that we talked in the last quarter about the investments that we were doing on the top team has been able to deliver these enhancement ahead of what we had originally expected. So we're very happy with the investments that we are doing there.
They are paying us.
Okay.
Great guys I appreciate it thanks.
Sure. Thank you.
Thank you next question is from Trevor Young with Barclays.
Your line is now open. Please proceed.
Great. Thanks first on the <unk> guide.
9% growth at the high end I think that would imply to accelerating year on year growth on an organic.
FX basis, I think FX headwinds working gear.
One is that how youre thinking about it and two it looks like a little bit of a wider range for the quarter than in prior quarters about a $5 million.
Spread there is that indicative of greater uncertainty from here.
Thank you Trevor for further questions.
Question on your first question, yes, the uncertainties.
ECS and the second question.
What we had anticipated we have seen so far versus what we had anticipated is that macro impact on some headwinds coming from FX that has not played.
We are in our favor so we are putting a little bit more conservatism in the second half of the year.
Just because the macro environment is it's a little bit unstable, we exit execution wise, we have been executing according to what we had expected so.
We are quite happy with that.
Unfortunately.
FX has moved negatively in the first quarter and.
And that that put us where we want to take a prudent position on that regard.
Great. That's really helpful. And then just last one on the $200 million share repurchase authorization should we expect some accelerated repurchases near term in light of where the stock is trading.
Touch on your appetite for M&A right now given that public and private market stance appear to be coming in a bit.
We're excited about where the businesses.
Situated in long term.
Believers in it and that's the driver behind.
The share repurchase.
We're probably not going to get into the exact strategy of that repurchase, but it's there and we intend to use it.
Regarding impacts on M&A I think there is three ways you can look at cash right, we can do a dividend which.
<unk> is not.
I don't think well situated to square space right now.
You mentioned M&A potential, which is definitely still on the table, we don't feel constrained.
From an M&A perspective, with the authorization of the $200 million repurchased most of our M&A targets.
Have been kind of sub $100 million sub 70 million sort of.
Sort of move talk up obviously being the exception.
We continue to pursue a number of.
Smaller ideas and tuck ins and this doesn't constrain us from that and anyway. So we thought it was.
We are excited to be able to issue it yes.
The defense Profiler for square spaces really great with regards to delivery of cash and you can see that.
Our confidence so the share buyback program and also on the fact that we have increased guidance for for the full year.
Great. Thank you both.
Thanks Trevor.
Thank you very much and our next question is from Ron Josey of Citigroup.
Ron Your line will be open now if you would like to proceed.
Great. Thanks for taking the question Anthony Marcella I wanted to follow up on the subscriber growth and the visibility from what we just talked about I think coming out of <unk> you talked about more modest growth <unk> results were certainly better in terms of sub editions and more so I think you just said the macro was better but still unstable. So can you help us understand.
A bit more about the visibility and subscriber growth given <unk> was better maybe better marketing and the Super Bowl campaign.
And then as we think about <unk> and beyond would it be fair to think about subscriber growth maybe following the revenue growth trajectory that you outlined are similar and then I have a quick follow up thank you.
I would think that related to the subscriber related revenue growth I mean, the key strategy.
And what we've been doing is.
To give.
Give people more ways to sell and then be more involved in our customers' transactions and how they grow their business. So from a macro perspective, a long term perspective.
I think that you should see the revenue growth outpaced the subscriber growth as we get more into.
<unk> things like member areas different ways to sell different subscriptions and so.
I would think those would.
Diverge a bit right now.
Yes definitely.
With us to Q2, we had anticipated that the trough was going to be for Q2, and then closer to like you said that we are adding a second backup in the second half of the year is not related to subscription.
<unk>.
As I said, we have performing are performing a little bit better.
We see some headwinds with regards to.
Euro dollar the impact of the euro.
Currently 29% of our revenues higher.
Then eliminated.
In euro so the.
Under lying growth of the international business is still strong this quarter has been 16% year over year.
We are quite happy with the progress that we have been making in countries.
Like Australia.
The U K, Canada, we have also deliver local marketing campaigns this quarter in Germany, and France. So we are firm believers that international is a huge opportunity for us, but as the revenue size is quite.
Quite significant wins on FX that we have seen in the first quarter.
Got it.
That's very helpful. And then my last question is just on pricing.
Or any update on there given what we just talked about maybe the unstable macro we talked about bundling new pricing later this year coming out of another couple sort of running right now.
Now some of those were successful.
You see that reflected in the pricing on our farm site that gives US also more leverage when it comes to what you were referring to.
Question, which is the legacy pricing updates, which we still expect to happen in the second half of this year frankly, it gives us more confidence that there'll be successful because we can now point it frankly.
Our view quite modest price increases that are actually kind of keep a lot of customers still below the list price that you would answer Ed.
The new customer and bundling stuff is a longer term project in full effect. So it really big believer there that we have a lot of products that we have made at our end market.
Yes.
Due to the our release timeline over the years.
Behind another subscription another subscription on a subscription.
Whereas we took these things that are already there and built put them in the bundles made them a little bit more accessible from a getting started perspective. So that when you are signing up for square signing up for basically the business starter kit somebody who wants to sell courses I go and sign up for that.
<unk>, which enables us to then grow with you as you use more and more of that suites big believers.
Not a lot of complexity there much more mature.
Difficult for us than just.
Pricing update of our price testing new customers. So still excited about both of those but you don't see the impact of either of them in Q1 or Q2, thus far but they will occur in the second half of the year.
Yes.
I mean, the success that we have had with them scheduling tools and a number of areas has been quite quite good very solid very strong products.
Sometimes theyre, then that new unit subscriptions online truly reflecting the actual growth because we can't unique asked us actually unique.
But these products have been growing really nicely as well as marketing campaigns.
The main growth on <unk> for example has been driven by the growth in our scheduling again, where I believe we are very well positioned to continue to lead in.
Providing.
Services.
For customers and for our pro customers that manage time slotted weaknesses.
Yes, well Marcellus highlighting there is I think a really important point as well which is that.
<unk>.
Depending on which competitor you pick that GMP breakdown is very very different and we've said kind of over and over again on these calls and kind of as part of the marketing campaign that yes, physical product sales are very very important of course is we've got a big investment in that product that will continue but there's so many other ways to transact.
The appointment's product.
<unk> is doing for time solid businesses in hospitality.
Transactions are happening around the appointments that are flowing through our platform that we see a big opportunity in getting onto our platform. So invoicing basically all of the.
<unk> related to services that we're going to be able to tap into that we're targeting that is a little different than if we were just pure play physical.
Physical physical product commerce.
Thank you guys and wishing you the best Marcellus.
Thank you.
Thank you. Our next question is from Milan <unk> from Wedbush.
Your line is now open which you thought should proceed now com.
Comment.
Look one layer deeper and.
Think about that.
Growth in <unk>.
The food and scheduling versus what Youre seeing in.
And.
Okay.
These are more traditional product build.
Obviously, that's been an area that's been under a lot of pressure. So is there anyway to kind of help understand the puts and takes between those two sides a little bit better.
So.
While we don't break it out I can make some macro comments.
You are leaning into what you saw in <unk>.
Various other earnings releases recently, which is that there was sort of a return to some in person commerce.
A bit of a <unk>.
A softening in e-commerce, but even though it is still incredibly strong and it's obviously going to be a huge staying over the next decade. So there's that but part of what makes square space really strong and well positioned is.
<unk>.
Insofar as you're like Oh, so some of the E. Commerce stuff is returning to <unk> percent, while our businesses like Toc and time side of the business.
An appointment and the more we can get there.
The transaction related to that appointment flowing through square space in many cases, which doesn't it right now.
That stuff will be countercyclical to that other trend and so we've just tried to set ourselves up by serving the needs of a broad array of businesses and ones that operate with services and I think that that will that positioning will continue to play out very well over the next couple of years, even as these things.
Sort of ebb and flow because at the end of the day I still believe that if you take any one of these topic areas E Commerce invoicing appointments.
Scheduling.
Any area, where we operate I, just see them, all being bigger and more online.
Yes, and transactions flowing more to online sources over the next couple of years. So.
We are happy with our we're situated there.
Thanks, Yes, certainly the well rounded well rounded message.
It could be beneficial these days.
Okay.
Maybe you could just talk a little bit more about the you've got a lot of the letter.
And then I don't know if you'd be willing to.
And any more color around the CMS enhancements, but.
Just broadly speaking what are the areas and within these new features and functionality that maybe have you guys. Most excited.
In terms of how.
Due to the overall product mix.
Sure. So you know.
There's a lot of things.
Where to begin.
Yes.
A lot of what happens during the quarter, we frankly don't highlight on these calls because we just do a lot of blocking and tackling and a lot of releases. All the time that are important features for our customers that people might not.
Let's see immediately lets see so for international new languages launching.
<unk>.
<unk> being kind of fully rolled out user site translation available.
People asked about the insurance coverage in the <unk> that was great.
Win for us.
In the unsold products, we continue to innovate with bio sites.
Purchasing a large number of those.
<unk>.
And yes.
So I was alluding to.
In the transcript.
We have.
Some functionality and that hits at the core functionality of the content management system that we've really been working on for some time related to the core page building experience and it's really important because.
That functionality is like it hit every customer in every trial going to the web site product.
It's the most difficult thing to get right and it's the most important thing to get right because when you get it right you increase again usability of people using the product and express <unk> and I think what Youll see is that we have a strategy in the core and the core platform if not frac.
Maintaining that editing experience, we want fewer kinds of editing experiences with the right level of visibility for beginners, but also the express ability for professional users and circle members. So that they feel comfortable making more advanced sites on the platform.
So.
Some of that functionality is in beta right now.
Yes.
Did you go to on and on about it in the call just because.
I'd, rather show with visuals, because I think thats just better.
At that kind of stuff is just really important to us staying and being a world class performer in our space and so.
I'm really looking forward to that again, it's stuff that's been under development for a long time.
I would now.
One a disclose too much about it but on the <unk>.
We have our CFO members, we have already where sickle number suite, which is our global community of developers that gave us feedback and the reception of the product has been great. So far what we have seen in their reviews. We have received great feedback. So we are quite excited about these these changes that are coming on with <unk>.
Then we can announce them so yes.
Great. Thanks looking forward here.
Hearing words anymore.
Thanks Heiko.
Our next question is from the line of Catherine approaches of Goldman Sachs.
Your line is now open. Please proceed.
Hi, Good morning, Thanks for taking my question Anthony in Masala I'm, hoping you can share your observations on the folks that joined square space in 2020 in 2021 during the worst of Covid any observations around those cohorts from relative to your older cohorts either in terms of churn.
Willingness to grow and expand with this question is platform just curious what you're seeing relative to history in last call. It specifically.
Thanks Gorilla for the question I'm going to kick it off financing if you want to add later, so let me talk first about 2021 cash retention.
What we have seen.
For subscription cash retention is that it was stronger in 2021.
Versus what it was in 2020 and even at a constant FX basis.
Net retention was actually a better I mean of course as you can imagine 2020.
One really these cohorts so we're paying attention to how.
How they behave we have also looked at is at the 2020 cohort and how that has performed on a two year cash retention basis actually a little bit less than that because it has been inked.
Fully two years for all of the cohorts, but how those have performed compared to 2019 and <unk> has performed slightly better even than 2019. So we are quite pleased with the way that so far these cohorts have been behaving, which as I said represents a large number of customers on <unk>.
Think that this lease retention is a testament of of the stickiness of our platform on a loyal customer base that we have.
With regards to China, we have not seen changes in churn.
Overall, and I think one more piece of information perhaps is that we have seen this year.
More upgraded as sorry, let more people are coming directly to commerce.
And versus what we saw at first in 2020, where there was people are moving more from personnel to commerce, but we have seen a larger adoption of e-commerce versus what we what we sell in in the past with regards to upgrade.
Okay, that's very helpful color.
Okay.
No.
To summarize one Marcellus thing.
<unk>.
They're not weird cohorts.
Okay.
Right right right.
Anderson and Marcella I know, it's early days, but any guidance on how we can think about the payments revenue stream in 2023, and how to model that.
Okay.
Okay.
Look I mean, we.
We are at the latest stages of choosing our primary the we have been going on on due diligence for a while and the reason is because we really have amazing partners that.
Potential partners the companies that we're talking to are really really.
Good company. So we have to make a tough decision. There. However, we have been developing payments.
From I believe we started last year sometime in October and the teams have been showing us a lot of progress. So far. So we are confirming that we will launch payments in 2020.
Most likely it's going to be in the second half of the year, but the piece that we have yet to figure. It out is what's the going to be our commercial policy because as you see in the market days a wide range of some payments and then sorry processing fees.
That different processors attached and so.
Dan.
Talk too much about how that that's going to plan, we've been working on the plans behind the scenes, but those decisions are still yet to be made because we have a year to go and we have to continue to look at market conditions and so on.
Okay, we will stay.
Thank you.
Thank you.
And our next question is from the line of Josh Beck of Keybank.
Your line is now open. Please proceed.
Thank you for taking the question.
I had a little bit of a question just maybe high level about.
President E Commerce revenue and try to put some guardrails, obviously, there's been a large gap.
Commerce revenue outgrowing presence.
Presents revenue between 20, and 40%, obviously, we're going through.
<unk> period, where we'll be.
Happy talk.
Some.
Some changes there so magical will converge to some degree but just any.
Any guidance you can give us just on how the to build out these two businesses.
For the remainder of the year.
So.
Okay.
Sure.
Without getting in the space I.
I think you can maybe take some of.
Piecing together some of what we answered in other.
Some of the other questions and sort of think about alright.
Of course this is obviously very interested in attracting.
Customers that are that are.
Transacting and we wouldn't be a part of that transaction and then theres different macro trends that are going to influence.
People attraction to those various business models and the performance of those various business models within.
The platform.
So I don't I don't know if I have any very specific guidance on how to.
Yes look I mean, what I can tell you is we provided a goal an investors day last year and we are now from our perspective, we are on track to deliver on that goal.
If there are no significant changes that are going to.
Move in between.
2002, and 2020, sorry in 2022 between transit and Commerce.
I don't expect that it's going to be quite quite dramatic.
But look I mean, we.
Very very happy and excited with the growth that we having presence as much as they want and we are having in commerce because.
Any anybody once we have that that customer into our platform. We can move that flat at that customer that decides to transact into into any friend defend plan.
Okay. Okay. That's helpful and then maybe just.
Following up on the prior question about the branded square space payments.
Push you a little bit more on the go to market I appreciate that it's early and you're still working on on the commercial arrangements, but what you do that.
Operating live are you thinking about it.
Most likely that new customers come into the platform will be.
The most likely candidates to adopt or do you think you can go back to the existing base that may have a different arrangement in place and get them to adopt it just unreal.
I realize it's early so.
Fairly preliminary but just curious on the go to market there.
Sure so.
No brainer for us to make it the default for all.
New customers coming to the platform I think we're going to.
Aggressively incentivize.
Existing customers to switch over to.
The payment stack I think.
For the most part the feedback we've heard from people is that they kind of prefer to have everything in one place. They don't want different vendors the trust square space.
They want one relationship.
Insofar as they kind of walk that from a product experience and we can make it beneficial for them to switch over from us.
On the commercial side of things.
I mean I think.
It would be our goal to have 100% of all of our customers eventually using our payment stack.
Zach.
Excellent.
Russell.
Thank you Josh.
Thank you and our next question is from the line of Brad Erickson of RBC.
Your line is now open. Please proceed.
Hi, Thanks, just a couple of follow ups on the subscription business I think given the macro factors going on there's just a lot of worry right now about the health of the overall SMB up there.
What do you think you guys are seeing from your core call. It F&B pipeline and what have you sort of qualitatively built into your guidance in terms of F&B headwinds essentially getting worse staying the same but maybe maybe even improving from recent levels.
That's one and then secondarily just on subscription how do you think that you guys are doing market share wise lately and that part of the business.
Sure so.
One thing to keep in mind regarding square space in.
Yes.
<unk> formation is it is going to be some correlation there, but there are a lot of people who are using square space that are not really going to get picked up in that number because they are either part of like a creator economy and their formation of their business is going to lag like incorporation and all that so just kind of getting started either with like <unk>.
The buy side.
Regular square facelift type of their testing remember areas and things like that so we service a large number of business models.
Great space and again, but not all of them are going to get picked up in these b formation numbers I don't think.
Sure.
And then.
Second the second part of your question with regards to guidance.
Youre right that the reason.
Of them additional conservatism versus the guidance that we provided during the previous call is related to FX headwinds that we that.
That we saw in Q1, but we remain with the same plan that we had with regards to subscriptions.
Yes, the subscription of new new new.
Customers.
Yes, again for the full year, we baked in all of REIT.
Yes, it has not it hasnt changed compared to the previous guidance that we have provided.
Got it and then maybe just a quick comment on how <unk> been doing market share wise.
Alright.
Very interesting number of ways to kind of.
Track that from.
Just I mean, Theres CMS reports out there that talk about how many.
Euro or powered by which platforms and all of that I think we've been doing.
I think it's good.
I keep thinking more about what is happening behind the urls and the value versus necessarily like are there 5 million scientist 6 million 7 million sites right. I mean, you could be powering the top 20000, most valuable sites in the world each of which process.
Affiliate and GMB and that would be very very valuable versus like the next million presents website that may not be transacting. So.
Aye.
I think of our kind of customer we attract I think about.
Getting people into that entry level that have a high appreciation for quality.
I think that and I referenced that earlier.
Verbally on the scripts and also as an answer to one of our questions.
Really confident with what we're releasing in the CMS and the unification of all the commerce package it together into one bundle over time.
And Tommy bias, but I really think this is the best product in the market and I think that is.
Going to be just the usability express is really what we do how we pushed your market forward from a visual in.
Creative standpoint remains really really important so.
I have more confidence than ever in the main tool.
We're a product company and we invest in that and have always invested in that and.
That's why I'm excited about the roadmap and what's coming out.
Got it thanks.
Thank you.
Our next question is from <unk> Khan of <unk> Securities. Your line will be open for Deutsche proceed.
Thanks.
Couple of questions. So it sounds.
You mentioned earlier that you did some price to.
And then some.
Some of them were kind of.
The other ones.
We continue to kind of be more more work there, but can you give us some color on.
What kind of testing.
The candidates for the new customers, new customers and to sign up.
You may not be getting as big of a discount or they might have in the past or is that generally an increase in the subscription pricing as well.
For the existing ones.
Sure. So tessa I'm, referring to are for new customers only.
<unk>.
Okay.
Changing that on an international basis versus a U S dollar basis.
So looking through the multiple currencies and testing elasticity there.
We have.
Other ideas around.
Ill prioritize support offerings that we're going to be seeing.
If people.
Have an attraction to and so yes.
Hope that gives some color on kind of what we've been doing and we sort of due to all the time trying to figure out what the optimal point is no market for us.
Yes.
Got it.
It sounds like.
Is that fair statement, and how big of a high debt might be.
Dave what was the second one what was the last thing you said.
How big of an increase they might see in good shape.
Yes, so so correct in the second half will be will be targeting.
Existing customers I think what we proven hope we can infer is that because people were.
New people coming in were good with the with an even higher price that we'll be able to say hey look we're not going to necessarily increase everyone's at those prices but.
We can kind of inch inch things up a little bit.
Hey look you've still got some and in many cases some version of a grandfathered price.
Bob.