Squarespace Faces a Soft Near-Term Outlook but Invests for Growth; $17 FVE Maintained

No-moat Squarespace delivered a reasonable third-quarter fiscal 2022 result as robust demand for website building and hospitality solutions offset foreign exchange headwinds and weak gross merchandise volume growth. Revenue grew 8% year on year, or 13% in constant currency, aided by a mix shift to higher-value solutions and resilient retention despite the gradual initiation of price increases for existing customers. This top-line growth and a pullback in marketing spending underpinned 190 basis points of operating margin expansion year on year to 5%, partly offset by increased internal hiring.