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Squarespace S1
- chdaniel 6y agoProfitable since 2016, ~$621m in revenue 2020, $30.5m profit in 2020 Curious to see how the reception'll be for this, given they're not on the 'if we're not on a loss, we're not spending enough money to grow' path
- 55555 6y agoFor the curious and lazy. where'd that money go? 168 million on R&D, 260 million on marketing&sales, 54 million on running the business, 10 million in interest payments Wonder what all that R&D is for. Maybe they are working on a coronavirus vaccine.
- mrcarruthers 6y agoSponsoring YouTube videos :P
- masklinn 6y agoThat would be the 260m marketing & sales budget I expect.
- european321 6y agoDoes R&D include things like salaries for engineers/product?
- Cshelton 6y agoI haven’t read the S1 yet, but typically yes. Unless they have a separate breakout, the R&D in this case would include engineering salaries.
- gen220 6y agoIt usually does. If a company really cares to follow GAAP to the letter, teams are supposed to estimate how much of their work should be categorized as maintenance or keeping the lights on, and that counts towards OpEx, while development work counts towards CapEx (R&D). Context is that Companies prefer to spend capex, because it produces “depreciable assets” (your soon to be legacy software system), that make financials look better. Then they use this to allocate a proportion of the salary towards one bucket or another. Of course the lines are fuzzy and arbitrary in many cases, but 80/20 Cap/Op is the typical net distribution in departments that employ software engineers, from what I’ve seen.
- otoburb 6y ago>>If a company really cares to follow GAAP to the letter, teams are supposed to estimate how much of their work should be categorized as maintenance or keeping the lights on, and that counts towards OpEx, while development work counts towards CapEx (R&D). The problem with following US GAAP 350-40-05-1D[1] to the letter is that if you capitalize development costs then you generally should only do this for internally developed software. If you "externally market" said software (which is now a capitalized asset on the balance sheet), which usually means selling to external customers upon which your revenue is then derived, you have to derecognize the capitalized asset before you can record any revenue. IFRS differs from FASB (US GAAP) in this regard; it's more in line with what you noted. Having said this, since Squarespace is based in the US and subjects themselves to US GAAP, they expense all of their R&D costs. Skimming the S-1 it was interesting to note the $10.6MM in R&D credits for 2020 only (possibly due to the pandemic; not sure). [1] https://fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176170115612&acceptedDisclaimer=true https://fasb.org/jsp/FASB/Document_C/DocumentPage?cid=117617...
- texasbigdata 6y agoOnly covers US W-2 labor. So perhaps that’s why. If only X% of labor force is elligeable and Y% of your FTE base is devs and Z% of their time is legitimate incremental novel work (defending one of those audits requires pulling GitHub/Jira/technical documentation support) then $11M is perhaps a reasonable number. YRMV.
- ryanSrich 6y agoSpending on sponsorships for what feels like 100% of all podcasts in existence.
- simias 6y agoSurely that's marketing&sales, not R&D.
- ryanSrich 6y agoAccounting can get weird for tax purposes, but you’re probably right.
- topicseed 6y agoYup, and some of these I'm not sure the audience is even into having their own website.......
- arcturus17 6y agoThe point of the solution is that it crosses the line between B2B and B2C so pretty much anyone can be a potential customer...
- spike021 6y agoNot just podcasts. Many of my favorite Youtube channels have websites built with it and then usually have an in-video advertisement with a promo code.
- ProAm 6y agoThere were VERY early on the podcast revolution. I would say they helped make the landscape we see in podcasts today possible.
- weego 6y agoI my bet is they'll be spending money like water on AI research to build base websites automagically for people based on their taste and industry and nothing will ever come of it.
- politician 6y agoCubespace. They're redeveloping their solution for 3D/AR/VR.
- rokob 6y agoR&D == software engineer salaries
- eloff 6y agoR&D is basically the expenses for software development - the cost of the product for a software company.
- markdown 6y ago$168M though? It's just a website.
- thebean11 6y agoIt's a tool to build and host websites, pretty big difference
- markdown 6y agoYes, but two devs in a garage could build this website that builds websites. Certainly not $170M worth of development.
- ZephyrBlu 6y agoI really hope this is a bad attempt at trolling.
- dna_polymerase 6y agoSo, why don't you do it then? Seems like there is a nice amount of money waiting for you.
- yreg 6y agoSo is Facebook.com
- machello13 6y agoThat's gotta be a joke?
- reggieband 6y agoR&D = Research and Development. In many orgs product development falls under R&D. That would include all of the people involved in developing the product including engineers, product owners, QA, graphic design, etc. One tidbit I recall about that is there are often tax grants for business development that include R&D expenditures. So while it often feels weird to think of your primary product as tangental to "research", there are potentially some tax benefits to categorize it as such.
- bostonsre 6y agoDisclaimer: I don't know much and I'm probably wrong. > CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (In thousands) Doesn't that mean they're not profitable? Or am I reading that wrong?
- nrmitchi 6y agoYou're reading it wrong. The section includes income, or loss, depending on the situation. Losses (negative income values) are typically represented with parenthesis. Income of $25000: 25 Loss of $25000: (25)
- bostonsre 6y agoThanks.
- bootwoot 6y agoThey're indicating explicitly that it's parentheses here with the text "INCOME/(LOSS)"
- computerphage 6y agoThe claim about typicality was to add addition information, not to speculate about this particular case.
- yreg 6y agoIf I considered investing, I certainly would not be worried about this company not spending enough on marketing.
- avipars 6y agotoo many superbowl ads
- kevinob11 6y agoI love Squarespace. I find it to be as close to the perfect mix of flexibility, usability and beautiful defaults that I've ever seen in a website builder. I can hand off management of the site to someone with almost zero technical skill (my 70 y/o father with almost no technical knowledge manages a Squarespace site I built him!) and when I look back in 2 years the site will still look pretty good and will still work on mobile. Chances of the site being hacked are much much lower than on Wordpress. Prices are reasonable. The layout engine is exactly what I want, it looks nice on all devices and can handle most layouts, which is a totally worthwhile tradeoff for the few times that something just doesn't quite look the way I want it to without custom css. I know people say this stuff: "You can't transfer your site away" - I know, but I can build a reasonable site in ~2 days, so the tradeoff is worth it and the sunk cost is lower "But I want a fully custom design" - Yeah, fair enough, there is a cap on the high end of design with it but I think that cap is pretty high, especially in 7.1 "But it is making the whole internet look the same!" - Not really, between colors, photos and sections in 7.1 I just don't think this is true. If you use unsplash for all of your photos then maybe, but if you are doing that you are probably too small to care, worry about that when you hit 2MM in revenue "But Wordpress is user friendly too" - No it isn't As I write these I think that maybe it is just the perfect thing for my subset of clients (SMB), so read this from that perspective. I know this isn't really the discussion on this thread, I just wanted to see what experiences of others have been.
- arkitaip 6y agoSounds like you know what your customers want and deliver on that. That's better than most devs who want to shove their favorite language/framework down the throat of their poor customers.
- arkitaip 6y ago> We may acquire or invest in companies, which may divert our management’s attention and result in additional dilution to our stockholders. We may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions. Squarespace and Shopify would be an super combo. Individually they currently suck at the other's main area of focus - Shopify has weak design capabilities, Squarespace e-com is too basic - but together they would offer great value in terms of online presence for businesses and still keep their edge.
- pavlov 6y agoShopify's market cap is $146 billion, so any acquisition would certainly be them buying.
- mcny 6y ago> Shopify's market cap is $146 billion, so any acquisition would certainly be them buying. Not that I know anything about this specific instance but the story can be... complicated. For example, would you say CenturyLink acquired Level 3 or did Level 3 subsume CenturyLink? If you read the news headline, you'd probably say CenturyLink bought Level 3. > https://archive.fo/rdNYn https://archive.fo/rdNYn > CenturyLink to acquire Level 3 for $34 billion > Telecommunications company CenturyLink is upgrading its network with the acquisition of Internet backbone provider Level 3 Communications in a deal valued at $34 billion. > In the cash and stock transaction, Level 3 shareholders will get $26.50 and 1.4286 shares of CenturyLink stock for each share of Level 3 stock. At $66.50 per Level 3 share, that represents a premium of about 42% over Level 3 closing share price of $46.92 on Oct. 26. Included debt brings the deal to $34 billion, the companies said. > When the transaction closes, expected by the third quarter of 2017, CenturyLink shareholders will own about 51% of the combined company, with Level 3 shareholders owning about 49%. However, the new CenturyLink/Lumen CEO is the Level 3 CEO. > Jeffrey K. Storey (born May 12, 1960) is an American business executive whose career has focused on the telecommunications industry. He was the president and chief executive officer of Level 3 Communications between April 11, 2013, and the company's acquisition by CenturyLink in 2017, at which point he became president and COO of the combined company. He became CEO of CenturyLink on June 1, 2018.
- deleted 6y ago[deleted]
- swyx 6y agopg 121 Accel/General Atlantic/Index Ventues own 80.8% of class A shares, but have total voting control of 14.8%. CEO Anthony Casalena owns 75.7% of class B shares, and has 68.2% of voting. this is what job security means.
- paxys 6y agoThat didn't work out well for Travis Kalanick.
- nexuist 6y agoThat seems to have been because he was Travis Kalanick, not because he had majority voting rights.
- tpowell 6y agoI got to meet their small core team in 2008 at SXSW (I was already a fan of earlier versions). They were young, with one 40ish exec in tow, and had just got their expen$ive new letter-pressed, laser-cut square business cards. I remember feeling whoa when they're first Super Bowl ad aired. Seeing the percentage Anthony was able to retain is another whoa moment. He really was a one-man-show starting out. I recommend his episode of How I Built This[1]. His Google Talk [2] is interesting as well. [1] https://www.npr.org/2019/02/28/699096835/squarespace-anthony-casalena https://www.npr.org/2019/02/28/699096835/squarespace-anthony... [2] https://www.youtube.com/watch?v=vC-dFd7Ekhk https://www.youtube.com/watch?v=vC-dFd7Ekhk
- gdsdfe 6y agoNever heard of class A vs class B shares, can anyone please explain? TIA
- bpodgursky 6y agoDifferent share classes have different voting rights. Way for founders to raise money without giving control of the company to VC firms / hedge funds.
- subpixel 6y agoI will pay them $100 - keep your stock - if they remove the insanely annoying feature that triggers login anytime a visitor hits the escape key on a site built with Squarespace.
- troymc 6y agoYou can turn that off: Settings - Advanced - Escape Key - flip the switch
- nacho2sweet 6y agoI used to do like $5000 wordpress websites on a side hustle just throwing up edited pre-bought templates and would always feel really dirty during it "thank god they don't know about squarespace".
- jypepin 6y agonow you can sell $5000 squarespace websites and it will be even easier!
- jmconfuzeus 6y agoHow did you do that?
- thedudeabides5 6y agoLove squarespace, but what's up with the wacky pro-forma vs 'actual' in the operating income on pg 8? Difference of $300m in operating income from sg&a (2020) and then $500m+ in balance sheet assets on the next page...
- josh_carterPDX 6y agoProbably something having to do with knowing they were going to go public and hoping no one would catch that!
- NationalPark 6y agoI think the pro-forma number includes the G&A costs associated with the public offering. See page 57.
- treis 6y agoTIL that Square and Squarespace are different companies.
- reducesuffering 6y agoNot only that but Square competes in the same market with their acquisition of Weebly, now branded as Square e-commerce sites.
- kentosi 6y agoSorry but I'm really not clued up on reading S1s. How does one find out when they intend on hitting the market?
- Etheryte 6y agoThe first page reads the following boilerplate text, but beyond that I don't think there's any more info available at the moment: > Approximate date of commencement of proposed sale to public: As soon as practicable after this registration statement is declared effective.
- tomlin 6y agoAs if it's an accomplishment to let go of internal creativity.
- Svoka 6y agoIf someone doesn't know what S1 is, it is a form required before going public and selling stocks.