By Emily Bary
Squarespace Inc. exceeded expectations with its third-quarter revenue as the company highlighted growing interest in its commerce offerings despite supply-chain issues that are impacting merchants.
The company, which enables customers to make websites, generated third-quarter net income of $2.8 million, or 4 cents a share, down from $17.9 million, or 12 cents a share, in the year-earlier quarter.
Squarespace /zigman2/quotes/226569419/composite SQSP -5.48% saw revenue rise to $201.0 million from $162.3 million, while analysts tracked by FactSet had been projecting $197.8 million.
The company said that it has been making progress with its efforts to grow commerce through its platform. Commerce accounted for $210 million in revenue on a trailing-12-month basis and “represents an increasing percentage of our overall business,” Chief Financial Officer Marcela Martin said on the company’s earnings call.
Squarespace recently launched new marketing products such as a tool that makes it easier for businesses to create videos that promote their products. The company also has a Bio Sites offering, allowing users to make simple websites from their phones that they can use to engage customers on social media.
The company has been impacted by macroeconomic trends recently as new-business formation has been less robust than it was a year before, executives noted on the earnings call.
“We believe this had an impact on customer acquisition this quarter as compared to the previous year,” Martin said on the call, specifically highlighting a weaker dynamic earlier in the quarter. “The downward trends we saw in July and August recovered significantly in September, where business formation growth remained flat year-over-year.”
For the fourth quarter, Squarespace expects revenue of $203 million to $206 million, while the FactSet consensus was for $205.1 million.
Shares were off 0.4% in after-hours trading Monday.
Squarespace plans to hold an investor-day event on Nov. 18 at 1 p.m. Eastern
Shares have declined 4.4% over the past three months as the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.89% has risen 6.0%.