Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Wix.com Ltd (WIX, Financial) reported a 15% year-over-year bookings growth, a significant acceleration from the 10% growth in Q1.
- The company achieved 12% revenue growth, exceeding the top end of their guidance.
- Wix Studio saw a 20% quarter-over-quarter bookings growth, driven by new features and strong partner engagement.
- The introduction of 17 AI business assistants has received positive feedback, with more AI tools set to launch later this year.
- The commerce platform experienced a 21% year-over-year growth in transaction revenue, with a record take rate of 1.68%.
Negative Points
- There is a general conservatism in the outlook due to macroeconomic unpredictability and FX volatility.
- Despite strong adoption, there is a noticeable difference in AI tool uptake between new and existing users.
- The company is facing tougher year-over-year comparisons as they lap the initial success of Wix Studio.
- The expansion into new verticals and onboarding larger merchants may require sustained investment and resources.
- The company acknowledges that achieving a seamless AI integration across all products is still a work in progress.
Q & A Highlights
Q: Can you share more about the new types of customers coming on board with the commerce packages and the opportunity with larger merchants?
A: As we gain more traction with Wix Studio and Wix Partners, we're attracting larger merchants across various verticals, including bookings, e-commerce, and events. This reflects the maturity of our commerce offerings and increased market penetration. (Nir Zohar, COO)
Q: What are you seeing in terms of AI product adoption among self-creators, and are there any KPIs indicating better conversions or higher ARPU?
A: We have KPIs showing continuous improvement. Our experience with AI tools since 2016 has shown that integrating AI into the product lifecycle improves user interaction and conversion rates. We are optimistic about the potential for continued improvement. (Avishai Abrahami, CEO)
Q: Can you speak to the sustainability of Wix Studio's momentum and how AI might impact the Studio and Partners opportunity?
A: We are seeing significant results from Wix Studio, with new agencies joining and existing ones buying more subscriptions. AI tools for agencies focus on streamlining design and content creation, which differs from self-creators' needs. Both agencies and self-creators will continue to grow. (Avishai Abrahami, CEO)
Q: Are you seeing different adoption rates or behaviors from new versus existing customers for AI solutions?
A: Yes, new users are more likely to adopt AI tools as they may not have the design or writing skills that existing users possess. This opens Wix to a broader customer base. (Avishai Abrahami, CEO)
Q: Can you provide context around the view for exceeding the Rule of 40 in 2025?
A: We expect a combination of revenue growth and margin expansion. Revenue growth will outpace payroll expenses, and we will see leverage in marketing and other costs, leading to significant surpassing of the Rule of 40 next year. (Lior Shemesh, CFO)
Q: Is the back-half conservatism in the guide due to general macro concerns or specific volatility?
A: It is general conservatism due to macro and FX considerations. There is no specific issue for Q3 or Q4, but we always factor in potential macro impacts when providing guidance. (Lior Shemesh, CFO)
Q: Are there any levers to improve the Wix Payment take rate?
A: Increasing adoption of Wix Payments and introducing new capabilities and verticals will help. We aim to reach a take rate similar to best-in-class industry standards, around 2.25%. (Nir Zohar, COO)
Q: What are you seeing in terms of SMB health and geographic trends?
A: We see stability in SMB health and consistent trends across geographies. Some verticals like scheduling and events are growing faster, but there are no major shifts indicating macroeconomic changes. (Nir Zohar, COO)
Q: Can you elaborate on the 17 AI assistants and their impact?
A: All 17 AI assistants are customer-facing, providing quick answers and performing tasks. They streamline customer experiences and reduce friction. We plan to integrate these assistants across Wix for a coherent user experience. (Avishai Abrahami, CEO)
Q: How should we think about the monetization curve for Wix Studio?
A: Agencies typically start with a new project on Wix Studio and return for subsequent projects if satisfied. The rate of projects depends on the agency's size and customer base. We see strong signals of repeat usage, indicating satisfaction with the product. (Avishai Abrahami, CEO; Lior Shemesh, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
