Wix.com Ltd’s Earnings Call: Positive Growth Amid Challenges

Wix.com Ltd ((WIX)) has held its Q2 earnings call. Read on for the main highlights of the call.

Wix.com Ltd’s recent earnings call paints a picture of optimism amidst challenges. Despite facing hurdles such as a decline in organic search traffic and increased operational costs, the overall sentiment remains positive. The company has shown strong new user cohort growth, successful integration of AI and BASE44, and has raised its revenue and bookings guidance, indicating robust business fundamentals and promising growth prospects.

Strong New User Cohort Growth

Wix.com reported a 14% year-over-year growth in new user cohort bookings for Q2, with further acceleration observed in late Q2 and early Q3. The U.S. market, in particular, demonstrated significant strength, with improvements noted in cohort size, conversion rates, and monetization.

AI and BASE44 Integration

The acquisition of BASE44 is expected to contribute significantly to Wix’s growth, with projections of generating $40-$50 million in annual recurring revenue (ARR) by the end of the year and a trajectory towards $100 million ARR. The integration of AI-powered offerings and BASE44 is anticipated to drive substantial growth in 2026 and beyond.

Revenue and Bookings Growth

Wix.com achieved a total revenue of $490 million in Q2, marking a 12% increase year-over-year. Total bookings also saw a rise to $510 million, up 10% year-over-year, showcasing the company’s strong financial performance.

Partners and Transaction Revenue Growth

The company experienced a 24% year-over-year increase in partners’ revenue, reaching $183 million. Additionally, transaction revenue grew by 18% year-over-year, driven by an increase in Gross Payment Volume (GPV).

Positive Outlook for 2025

Wix has raised its full-year bookings outlook to between $2.04 billion and $2.075 billion, projecting an 11% to 13% growth. The revenue outlook has also been increased to between $1.975 billion and $2 billion, marking a 12% to 14% growth.

Decline in Organic Search Traffic

Despite the positive developments, Wix noted a decline in organic search traffic to individual websites, highlighting the challenges of maintaining visibility amidst the increasing use of LLM-based search engines.

Increased Operational Costs

The company reported an increase in non-GAAP R&D and sales and marketing expenses due to headcount growth and the integration of acquisitions, impacting the overall cost structure.

Forward-Looking Guidance

Wix’s guidance for the future remains strong, with total bookings for Q2 growing to $510 million, driven by new user cohorts and AI adoption. The company expects revenue for 2025 to be between $1.975 billion and $2 billion, with Q3 2025 revenue projected to be between $498 million and $504 million. Free cash flow is anticipated to remain within the range of $595 million to $610 million for 2025.

In summary, Wix.com Ltd’s earnings call reflects a positive outlook, with strong growth in new user cohorts, successful integration of AI and BASE44, and increased revenue and bookings guidance. Despite challenges such as declining organic search traffic and rising operational costs, the company’s robust fundamentals and growth prospects remain promising.