Squarespace (SQSP) Reports Q1: Everything You Need To Know Ahead Of Earnings

Jabin Bastian /
2024/05/06 3:05 am EDT

Website and ecommerce tools provider Squarespace (NYSE:SQSP) will be reporting earnings tomorrow before market hours. Here's what investors should know.

Squarespace beat analysts' revenue expectations by 2.9% last quarter, reporting revenues of $270.7 million, up 18.3% year on year. It was a very strong quarter for the company, with an impressive beat of analysts' billings estimates and a solid beat of analysts' ARR (annual recurring revenue) estimates.

Is Squarespace a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Squarespace's revenue to grow 16.6% year on year to $276.3 million, improving from the 14.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.14 per share.

Squarespace Total Revenue

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Squarespace has a history of exceeding Wall Street's expectations, beating revenue estimates every single time over the past two years by 1.8% on average.

Looking at Squarespace's peers in the sales and marketing software segment, some have already reported their Q1 results, giving us a hint as to what we can expect. VeriSign delivered year-on-year revenue growth of 5.5%, meeting analysts' expectations, and GoDaddy reported revenues up 7%, topping estimates by 1.1%. VeriSign traded down 4% following the results while GoDaddy's stock price was unchanged.

Read our full analysis of VeriSign's results here and GoDaddy's results here.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 thanks to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the sales and marketing software stocks have fared somewhat better, they have not been spared, with share prices down 3.1% on average over the last month. Squarespace is down 5.5% during the same time and is heading into earnings with an average analyst price target of $38.5 (compared to the current share price of $35.24).

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