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Squarespace Stock Drops on Wider-Than-Expected Loss

Squarespace also provided mixed third-quarter and full-year revenue estimates.
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Shares of website development service Squarespace Inc.  (SQSP) - Get SQUARESPACE, INC. Report dropped after hours after the company reported second-quarter bottom-line results below analyst expectations. 

The New York City company reported a net loss of $3.22 a share, well below consensus estimates of a loss of just 2 cents a share. Revenue for the period reached $196 million ahead of analyst revenue estimates of $188.7 million. 

"The market opportunity for the Squarespace platform remains large and growing, especially as we expand into helping support the many ways our customers around the world transact online," CEO Anthony Casalena said.

For the third quarter, the company expects revenue between $193 million and $198 million compared to FactSet estimates of $197.5 million. 

For the year, the company expects revenue between $772 million and $780 million compared to estimates of $773.6 million. 

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Unique subscriptions reached 3.9 million in the quarter, up 15% year over year. 

Squarespace debuted in May this year through a direct listing with a $50 reference price. The stock fell nearly 13% in its first day of trading. 

Since then, the stock has clawed its way back closer to its reference price, closing Monday's session up more than 2% to $49.50. Shares were down 5% to $46.98 after hours. 

Squarespace said in its prospectus that its revenue totaled $621.1 million in 2020, up 28% from $484.8 million in 2019. Subscription-based revenue soared 94%.

Net income dropped to $30.6 million from $58.2 million.