Wix.com Ltd. Q3 FY2024 earnings call

Avishai Abrahami highlighted accelerating growth, noting 16% year-over-year bookings growth. He discussed the AI-powered Website Builder available in 20 languages, with over 50% of new users using the AI onboarding process, and 29 AI assistants across various use cases. Nir Zohar provided an update on user cohorts, mentioning nearly 5 million new users in Q3, Q1 '24 cohort outperformance, and ARPS increase. He also noted Studio bookings acceleration with 75% of new partner bookings from Studio accounts. Lior Shemesh walked through financials, stating non-GAAP gross margin was 69% in Q3, and revised full-year guidance for bookings, revenue, and free cash flow.

Bookings grew to $450 million, a 16% year-over-year increase. Revenue was $445 million, up 13% year-over-year. Partners revenue accelerated to 30% year-over-year, reaching $155 million, with 75% of bookings from new partners coming from Studio accounts. Self Creators had revenue acceleration for the second consecutive quarter, driven by AI tailwinds and cohort behavior. Commerce GPV growth accelerated to 14% year-over-year, with Partners contributing over 50% of GPV in Q3.

Full-year bookings outlook revised to $1,822M-$1,832M (14%-15% year-over-year growth), revenue to $1,757M-$1,764M (13% year-over-year growth), and free cash flow (excluding headquarter costs) to $483M-$488M. Expect continued growth from Studio, AI, commerce, and Self Creators initiatives, with Studio strength expected to translate into Partners momentum and Self Creators growth accelerating while profitability improves.

Q: Trevor Young on free cash flow margin and Self Creator investment A: Lior Shemesh discussed free cash flow margin and investment in Self Creators, noting Self Creators is highly profitable and Partners is improving, with margin expansion expected for Partners long term Q: Ygal Arounian on Studio contribution and WordPress impact A: Lior and Avishai talked about Studio contributing 75% of new partner bookings and WordPress losing market share historically due to conflicts Q: Andrew Boone on marketing efficiencies and commerce products A: Nir Zohar discussed marketing step-up tied to demand and commerce as a horizontal offering with wide array of offerings including events, invoicing, etc.

Q: Ken Wong on bookings acceleration and AI monetization A: Avishai spoke about bookings acceleration from Studio adoption, retention, and AI, while Lior mentioned AI products monetizing for both agencies and Self Creators Q: Elizabeth Porter on Self Creators AI innovations A: Lior Shemesh discussed AI innovations for Self Creators, influencing acquisition and website completion, with new products to be released Q: Bernie McTernan on price increase and AI monetization A: Lior Shemesh noted price increase impacts revenue, with Partners having more impact on growth, and AI products next year expected to generate significant value Q: Robert Coolbrith on Partners large agencies and Business Solutions A: Nir Zohar mentioned pursuing large agencies with Studio brand and innovation, while Avishai noted no major changes in Business Solutions seasonality beyond Google Workspace incentives Q: Clarke Jeffries on AI monetization and free cash flow margin A: Nir discussed AI monetization during website buildup and post-build phases, and Lior explained margin progression due to cost structure leverage with top-line growth outpacing cost increases