The current pandemic has accelerated the need for smaller businesses to expand their online presence. New York-based Squarespace (NYSE: SQSP) is helping the SMB segment expand its digital presence through its easy-to-use digital solutions.

Squarespace’s Offerings

Squarespace was founded in 2003 by Anthony Casalena as a website building and e-commerce platform. The idea behind Squarespace came to Anthony when he was designing a website for himself and realized that the tools available for building websites were very cumbersome. He wanted to create a solution that allowed anyone to publish elegant websites using simple tools. Thus, the do-it-yourself Squarespace was born as a powerful platform that helps users leverage the power of the Web.

Squarespace’s platform allows customers to build their brand and transact with end consumers. It offers websites, domains, e-commerce, tools for managing a social media presence, marketing tools, and scheduling capabilities through an easy-to-customize and design-first platform in about 180 countries. Individual entrepreneurs, creatives, and marketing professionals have the ability to manage projects and businesses through its products.

Its solution focuses on integrating three key functions within a website – presence through intuitive design tools, commerce – through comprehensive commerce solutions that allow customers to sell products, subscriptions, content or services online; and marketing where it provides integrated marketing solutions to drive traffic, sales, and conversion.

Squarespace believes that it has a big market to address. According to recent reports, there are over 800 million small businesses and self-employed ventures globally. Within the US alone, that number grows by nearly 540,000 each month. But nearly 46% of the SMBs still do not have an online presence. Squarespace is targeting to increase the online presence of these companies through its easy-to-use tools.

Unfortunately, for Squarespace, this is a highly fragmented market with plenty of competitors offering similar products and services. Companies like Wix and Weebly offer simple DIY website building services. Wix, for instance, is one of the bigger vendors that has built more than 110 million websites and claims to be one that offers the most tools and capabilities to the builders. It even offers a free website builder plan that allows users to build an ad-supported website for free. Weebly claims to have built 50 million websites and is known for the simplicity it offers.

Squarespace’s Financials

Squarespace has seen rapid growth in its revenues. It reported revenues of $484.8 million in 2019 that expanded to $621.1 million in 2020. During the same period, net income contracted from $58.2 million to $30.6 million, while adjusted earnings grew from $97.6 million to $116.7 million.

The company recently reported its second-quarter results where revenues grew 31% to $196 million. Adjusted EBITDA grew from $39.5 million a year ago to $42.6 million in the quarter.

By segment, revenues from unique subscriptions grew 15% to 3.9 million, while average revenue per unique subscription (ARPUS) grew 6% to $193. Its Commerce revenues were up 31% to $58.7 million.

For the third quarter, Squarespace expects revenues of $193-$198 million. For the fiscal year, it forecasts revenues of $772-$780 million. The market expects revenues of $196.01 million for the quarter and $778.43 million for the year.

Squarespace went public in May this year. Before going public, it had raised $578.5 million in four rounds of funding. The most recent round was held in March this year for $300 million. At the time of its IPO, it was valued at $7.4 billion, where it sold its stock at a list price of $50 each. It is currently trading at $43.36 with a market capitalization of $6 billion.