Earnings call transcript Q1 2023

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Operator

Good day and thank you for standing by. Welcome to the Wix Q1 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Davis, conference Head like speaker to now Rona today, PR would hand over the your I & Communications. ahead. go Please

Rona Davis

Thanks, to Welcome call. morning quarter good earnings Wix's XXXX and first everyone.

Zohar, results Joining today Abrahami, Co-Founder; COO; our to Lior our our me are and President discuss CEO Avishai and Shemesh, CFO. and Nir

Form we factors forward-looking current recent statements, call, assumptions. Please that included and and expectations our XX-F consider these release statements this our to During risk cause and may make the in press these on actual are materially differ could based forward-looking most results statements. from

do update these We forward-looking obligation undertake not any statements. to

In addition, and results financial on we will non-GAAP key operating metrics. comment

our all You Investor non-GAAP our the in website, Interactive Relations reconciliations section and of in GAAP Analyst between can our on the find results investors.wix.com. and earnings materials

I'll With Avishai. call the that, to over turn

Avishai Abrahami

everyone. good Thanks, morning, Rona, and

fantastic We our top based say our business, the we line exceeded to have XXXX. business. both the across had and drivers pleased many our a And were profitability. I'm on broad that this of quarter The across start expectation our to on areas results of

for and free in guidance. We of provide best to discipline. testament above of QX users strategy million, excluding execution of increasing our our cash product expectation. also while Difficulty] platform our to flow, the results grew one-time million $XX Revenues are a ahead generated to operational of charges efficiency our [Technical great $XXX These the and innovative strong

freelancers this Wix partnerships, main incredible announced Partners We the up Partners including quarter, by plans Partners, our focus. product year-over-year. with our for business. year. enterprise and marketing revenue growth This many product more also the growth designers, later have for and accelerated scaling of recently some Headless exciting announcements this this business driven strategic XX% Much including year, Partners, key was quarter and

outperformance very of encouraging. is The quarter this first

as full-year, free forward of cash well XXXX. revenues our many the flow for we profitable outlook for raising and our targets as are So, pulling

Rule Our profitability share XXXX. at and the I will firm, on boosted more the my Nir then this I Lior with our let detail Nir? about AI. quarter in of XX, achieving close will thoughts confidence and

Nir Zohar

and share more joining our everyone, for Avishai a this you, thank bit quarter. I'll performance details today. us Thank about you,

As strategy in some it shift user quarter relates to cohorts, operational on on color on marketing our update our an recently the our focus announced and efficiency. investment following the

Let's performance. start with user cohort

in collectively improvement smaller our cohort on stable and average clearly base user X.X the quarter highest retention. the more new And Easily cohort. well business, performed indicates collections This as this first of significantly the well user a the new in of than including million XXXX subscription inherent QX in same in booking million Our cohort. generating subscription, with quarter. bookings exceptionally $XX a as conversion size per fundamentals non-COVID

Diving higher shows deeper focus as revenue the and into adoption choosing subscription, returns continued and applications, monetization and take transaction partners, It bringing increased higher convert business our rates, higher from by from users strong of partnerships. result higher rates. a result solutions driven users the sales also more price BXB is of on intense of GPV at which these creative our fundamentals higher contribution

the in trends We coming year. expect these to continue this quarters

the testament year. implemented global success our Lastly, as shift and last scale of this brand a of strategy strength our performance the marketing is to in reflected

acquisition we tests will based stable summer, reduce even that we As marketing cohort if on half. we could a reminder, determined by spend new keep last we bookings started

marketing still therefore months We at After new are and the to in the new increasing marketing and perfecting in strategy, reduced more continued and XX% and quarter approximately year-over-year, X expanding year bookings. we strategy the acquisition than by beyond. levels rest results decreased this this this spend confident marketing of remain of while cohort throughout expect acquisition investment

marketing successfully intensified additional quarter, increase well in In savings and significant employees with the employees, the we hosting effectiveness, outlined We our fundamentals and also added We XX% to X,XXX XXXX. implemented business. realized strong our as addition cost operating year-over-year QX optimization as focus the continued QX last decrease nearly down to in opportunities efficiency on across X,XXX headcounts. driving for

will our With to over financials. more on hand now through it details that, Lior? walk Lior to I

Lior Shemesh

Sure. Thanks, Nir.

expansion XXXX path allowed us these was to basis points, importantly, significant efficiencies quarter XXXX targets Even we profitability optimization This by with by and us hosting QX, than on grew In by achieving firmly fantastic savings. among gross our a profitability XX earlier cost much to margins marked Rule that other driven more of our margins. steps XXX improvements in nearly achieve anticipated. put headcount

XXXX, declined than We XX% entire across QX our QX percentage operating in cost operating our significantly drove drove on executing income headcount, by just This our savings further generation operating resulting strategy, flow Non-GAAP marketing reducing revenue anticipated. non-GAAP finish in XXXX in to highest to and leverage higher XX% new cash operating in under expenses from effort a history. implementing as of the structure. free

and aspects this past year, significantly. cost management, leverage to us operating to of flow across expand expenses our efficiencies commitment quarter's Looking momentum enable operational margin our expect advancing across we by this mostly organization, continue to cash further our drive will all continued

to excited particularly to to that deliver us our profitability the addition initiatives, our enable business in on In about Partners growth of our I'm the years. strategic focus continue will improvements, the continued very coming execution also

was quarter, year-over-year. remained of fundamentals up for revenue. our to exceed with guidance removing prior the range in to a of difficult year-over-year. growth Total this a compared bookings quarter of quarter, top-end up amount XX%, bookings on year FX Remember that business indication strong the this XXX signed Total to our quarter. neutral X% million year-over-year LegalZoom of revenue in last was from quarter. XXXX, in Now, partnership the QX XX% XXX our our comparison were the we details us this million better The creating QX this year, which led bookings growth of QX, our

to this Payments was driven growth as up as revenue XX.X GPV transaction XX% X.X tech growth year-over-year in acceleration continue of billion, merchant high quarter well of adoption as to increase. This an Wix overall saw year-over-year, by higher rate million. X% up We

As increase monetization couple GPV. Avishai projects year. more growth an mentioned, particularly the of generate Partners in up is a us agencies revenue is XXX.X to this of as Partners and quarters professionals, million, more This major area developers and to acceleration our and we on increasingly as for compared prior of they growth Wix grew build XX% year-over-year. focus

also early, over still partnership but revenue the minimal some contribution to of from the quarter, began couple very see BXB past we years. This we signed

quarter, across earlier operational By driving to More impressively intensified we year, in allow achieve quarter, quarterly milestones the hosting planned it introduced profitability XXXX. last the as us the focus actions as strategy These margin gross to and our gross saving in QX. in business. well this much non-GAAP QX, optimization the implementing headcount making efficiencies, for the cost increased since highest on efficiencies additional later XX% margin

basis creative later were in cost along QX, creative gross an of points of the Growth for targets XXX discipline year. year-over-year, for originally margin margin revenue non-GAAP subscription gross to XX% both these subscriptions anticipated drove in with above in increase the

highest Our earlier, our structure cost about or across non-GAAP the savings continued along our this with that operating resulted additional implementation revenue. operating of XX% XX.X of our spoke in income new quarter million of history marketing quarterly Nir strategy in

footprint in and As the we mentioned our with last February headcount charge we as reduction a our quarter, million impairment related one-time announced to take releases related to did we operating needs. of align account $XX.X we charges

result million focus free a of on growth of generated cash we As of of efficiency, flow and revenue. XX% higher a operational $XX

cash to in million as the well our the the XX of severance our of was headquarters, give excludes of about This which us expected confidence the QX. as I and cash ability in charges flow to performed X.X related than build-out XXXX. more portion better achieve Rule in just discussed, one-time Free CapEx

me outlook finish QX let for QX XXXX. our – with for Now, and

year-over-year approximately XX% be to XX% XXX expect in We million to XXX to total million, QX revenue growth. representing

billion, full-year, XX% expectation an increase we're $X.XX billion $X.XX or of to revenue prior growth. increasing This be year-over-year our the billion $X.XX XX% now outlook. growth. approximately to expect to to X% from our billion total is representing For to $X.XX We approximately XX%

drive also are non-GAAP XX% updating expected. expectations across our expect to XX% We to is XX% cost up our margin to gross be efficiencies profitability Creative operating previously non-GAAP structure. from subscription full-year We now continue for year, as previously now from for to expected. we the increase up the XX% expected the margin gross

and sales XX% previously to of operating down in XX% expected operational expected, efficiencies. are now Non-GAAP XXXX marketing XX% incremental compared to expenses be to to as revenue to by year-over-year driven and general XX% lower of revenue, expenses

XX% free are exiting a increasing flow of XX% XXX to cash XXXX million a for As to we or with XX%. of million more the to flow year free cash result, than revenue outlook our XXX

our expectation our of costs, exclude that an restructuring X.X XX% outlook and XX%. free build-out exit well compares margin to as XXX costs. approximately revenue This million of flow of as previous or XX% $XXX million cash of to to million our Note to XX% cash headquarters

in XX% of stock XXXX, revenue to XXXX. down from compensation XX% to from expectation based Finally, to our and decrease XX% revenue to previous of is expected of down XX% XX%

and anticipated. I'm very outlook more with As for remainder results revised headcount across quarter the of declines the our year. originally happy organization this than our the

now And to Avishai. I'll it turn back

Avishai Abrahami

about of getting Thanks, a lot I've questions lately. Lior. AI been

Wix want computing why share so today. advanced [Our the to recent prior breakthrough close development AI find to exciting. was So, including background] AI, time our [ph] in the which to I is of out I algorithm, my thoughts

data at directly and AI here report to me. fact, the Wix groups In

and the My more X, on in with summarized points. decade, AI teams IBM, the and three key at based we've thoughts been best collaborating planet AI, others. Over unlocking the also past be on can on while more OpenAI, breakthrough, opportunities Google

is goal First, our the for remove to better it to is easier friction. is. website, user build at our Wix Wix The

for for this make goals. products AI proven as their We including we our to users easier have before of the software achieve development and times many it

platform] goes user XXXX, satisfaction up, up, goes up, grows. based In goes we [titration Their and Wix retention monetization of [ph]. up, value Wix goes an ADI, the AI launched conversion

pages sense equivalent images build the their In personalized site The to they enters business. the prompt a to recommend and to generate using that site. some the information basic and and fact, about makes user then text business a it's

of with in generation text a open – [gen compared that naive us institutional AI, AI text Obviously, initial [ph] knowledge bit year. AI, was established due AI tools] recent and this of to to earlier it the replace text tech the our generation to introduced we tool creation, ability for team, were today. long That said, XXXX ChatGPT easy for our which

to result opportunity We few embed that friction bigger this Today, even value for impossible years to When it in ago. some almost reduce many our solve areas platform, more in believe new into opportunity customers. technology will technologies our a increased emerging AI market an addressable and users. is creating were increased we satisfied these

to innovation XXX both We users for model and deployed AI full have internal many simplify processes AI design, efficiencies. and user site enhancement, many to more. platform, power including complex on improve workflows technology search, over forecasting development site ours, This our Gen analysis, of and user and model creation, our site recommendation sentiment manipulation, and engines, support, semantic classification, text and creation,

full will It introduce only e-commerce, include business [LLM] you integrate will site and but the [ph] not be also powered layout. everything design the SEO, also need proprietary tools months, run as scheduling, more. AI content, algorithms, by such coming and more fully to with we generate to a that creation and which of the will, In course, even

amount for That today website. able demonstrated and there for huge is a the point already been with The that. content even create websites, is that not AI important in to growing. will possible Wix has second of question many The years. when is fully software, complexity ADI it's be our

the fully which happened today the from, fully and if I functional question is still software AI example, big e-commerce needed what still are code we The AI a something, far need be can maintain to website? products, to run very when when manage a content For code gateways many work, someone more website, sure make manage quote the of could to for wants ship deployed and to to run to the database payment a continues buy to for and server the to security, with the to site to partner code, is a functional there generate order believe even things. to

even and a and in my So, of the that third that build able it much if have final those even have you you to gets will software still lot if code, something of less, can more. to AI That content disrupt And pages automate far point. is, is need and all to future, industry.

believe longer management value very far need Wix many will are no there before and for And will a cloud management opportunities create be server in I You and that. we computing. then, to AI for database that from our users. leverage more

[indiscernible] your the a to ChatGPT that, story to [mid-journey] not the web. create for not is do to their It's our create [ph], to of about to capture add [ph] what ChatGPT images To helping user that that [mid-journey] today their use it text user and story. generate. to bring is using aligning It's It text we tell business. their version

you of example, need an yoga amusement and image park. your studio For like an amusement studio your yoga park, or

be are sold. and products real to and here the and Wix. your of do do to images The story story be the need a turning to big is online part needs you that how have site, e-commerce value of real it at well, we your that what images For being of

As business. power you is will our that our can create and excited AI opportunities tell, and the about and major I'm for power the it bringing the of tremendously users AI

will you take Thank questions. your now and joining, for we again

Operator

Ygal [Operator Arounian And first Certainly. from question our Instructions] Citigroup. come will of

Your open. line is

Ygal Arounian

a good value Hey that just and want AI, the come more. we on talk and AI more leverage to point, lot this afternoon. has of about last question I all over would evolves? the to good into future good point on the that add and talk couple you color guys focus bit. expand to we maybe of to opportunities want kind as users for maybe bit I that guess, A little of little more further And on up a weeks, specifically on morning past even, this as investors

websites start that some some think where can all folks as and you is stuff the they larger things of these biggest and the the go develop started to to AI that their fear some the develop I build stuff AI and to of more. they do happens in players capabilities, of

to improved, envision just And you to talk maybe has So, AI how the come Wix? to expect continue why you users that? about capabilities

Avishai Abrahami

users. happy just course, finger we've the more finished say right? XXXX, they few the a actually by Of start stay proven, on AI [indiscernible] it's lot how very what right? course. Well, that the is And for to is first did one. I the right and the And those increase of that of we many people leverage better of think that build part the that first do with – thing the is we about Wix about to I the question longer your experience, the in kind want the get, the And of the customers try we I'll first but It's of about monetization. with are to customer will website opportunities website generating AI things. ratio, a the a us, right, with, better to

and we the the text, increased the images we conversion. and which layouts, did So

allow it even I think current do technology us further. will the to

combination and is So, a it things, at just I many way look – of as the website to text. not a

ChatGPT help structure, right So have images. way the the and the user still but to of some you have the design it, right right us visuals, use right layout, to the

the creation is think And there. on a lot this work – So, first the part, of right, there's so website. I the

because I don't part replace edit standard of The want you to write it want it. third and point image, it’s website. the – modify easier want you use generate to beginning. to how it's image a to on is, There an want something bit the – use and harder ticks the next you can and you the and don't replace and do any click fifth you column, please go on actually And to to change the the all to models

to You just want part. specific do the

do you can well. proved So, when it this AI. very having requires do and it works complex that ADI But lot a of well, you it,

sites satisfaction. to better finished think the was being I and part. site going user I this is the and to creation happier more So faster first users see

The the thing right? understand, second is when take help to know can you like find cool what demonstrating of can to to to But today, really actually and part do on with yourself, want then do to how things, then what AI next more for another a Copilot we our AI, can and to of you you you lot kind use actually do way level. things Because Microsoft it. need Excel, we and to for how it example, you with guide software if to a start and Copilot you add is, of have capabilities,

take the next So, just stronger have can we valuable. think is ability than have to way of the that AI quickly everything fact platform that a creates more now more the we for that a the part, to have important because deeper actually more you tools, utilize better also type finish I and a lot if software become certain content actually users itself which have way layer how in the now and that you is of platform And not make ways. you the more use the a and power news more within the the you

us their in make sites result, as a very think so, And as users, company. I more optimistic us that more place a our enable better we to – a power And will successful. for us are this give actually put make

people chance if why to correctly your it? website, to understood or companies the second I think the part about build – AI I the was I misunderstood moving what is of

Ygal Arounian

doing create on the build people website – builders stay why use and their leverage they what capabilities and you're of so Wix? Essentially some Yes. and AI replicate

Avishai Abrahami

Yes.

look are that there at AI, can if you do two with – okay, today actually you so So changed dramatically. what – but things

of The that. said, as small a images very generation, use one right? do you as right, been dramatically. that a do, do ChatGPT, the I e-commerce, good changed to images, it text, part create invent how the Because And is course, is for nearly But which in very creation not we've time. same what as tech this first can has And of but not long we which of and you doing right?

to a you okay, use and of you So, sign to processes do do we it? the way you by that. repayment things, think How scheduling about covered to edit that make much need not on contracts, is on top of engine? How pretty all Just run that. work what that develop, right, X%

You need your well. site to be running

You you need need security. have well, you e-commerce all leads, transaction, scheduling collect to the are need need to you the And to be to need to have slideshow then do you have ability to content, of covered. not and managed SEO, update those ability

those all So, is basic micro you pay] very essentially pages, what that with always could of simple is right, is, which you support. do and the do lending already tools But [static can kind level create a with get [ph]. like

can publish and text it it put as in company. the and HTML You take go just and hosting some

So simple those do one okay. that, – very been guys lines. basic never have just do our that competitors, The and The

portion And can you it small those fact, business. very in do In a Wix. of our is

AI at years few than is to years of and very few our look quite a that kind starting until of the – very you quite just majority that probably still think more cover business, we the I there see is a if software. a – So,

Ygal Arounian

you. That's Thank helpful. Great. really

in this talked the follow-up Maybe [ph] of as ads, quarter. growth the expand that little more. near-term. and just A meaningful could on the partners but news – a on more you a being quick the little about you the around [indiscernible] really a up open And then the Business because could bit opportunity with interesting products Solutions. if potentially announcements was Google number contributor a interesting to [tier] bit Just some

well. just Thank if you. So, maybe that on could as you hit

Avishai Abrahami

need for demo are in you AI advertisement to you right. we a an a to use to reduce learn this Google not a and value for anything our by And fully way skill to read real to create for that, need what great advanced we [indiscernible] actually in bring very have successful friction create power we bring us user a that for the It's and to doing our for and good of more do is what utilizing is algorithms understand Google for time, running – advanced you. that Well, and and about to takes it's – algorithm generate to the the well, order it users. users, you

their is, opportunities. [as is of we more that the is users And successful. for because professionals it of using funny It call a more – And even of also monetization it being business we means have [ph] lot course, used we and the that that that lot us, reduction is them, as] web and result it much for a are that more happier by what labor of as partner provides friction value agencies the see so product. it's

Operator

Aaron you. question open. come Kessler your Aaron, James. is line Thank for from And Raymond And will next moment one of our question. our next

Aaron Kessler

Great. of seeing, a questions. environment second, updated thoughts right guide. just just non-GAAP a the Maybe comment bit and Thank the you couple with And in OpEx the now. on especially little the there your kind just SMBs we're maybe just of macro Maybe letter, you.

think given relatively it conservative to performance but strong guide. still I the you a lowered bit, there, QX that looks little

Just any you. for updates the year Thank as OpEx the on well? non-GAAP

Nir Zohar

second Hey regards in Aaron, the follow it's the Nir. I'll on can take part Lior part OpEx. up the and to first

top as it's in behavior The still well recovery board growth the existing early. improvements and is demand macro both side, the the funnel, new kind – the the cohorts revenue, relatively of in seen – of I say, some That of of some So, the terms on said, terms cohorts. of – little modest. the some we've in modest as in GPV, a bit transaction increase subscription in environment, would across the being

point little So, a bit of seeing but a to cautious recovery, we're do we're it. not we that it being out call

Lior Shemesh

mind, will to This think this my of going the that OpEx – achieve. With is I the we most be regard that is Hey of XX%. and is one the to in targets will our Lior. OpEx, around and year, OpEx amazing percentage to XXXX, non-GAAP manage things brings to of one Aaron. of revenue OpEx into that XX. trend which down to believe ability we I this continue me the that set for XX% confidence meet And the taking as this of a XXXX the Rule

continue So, and you revenue a should couple it even years will expect next it as to the of decline of in percentage be significant.

Aaron Kessler

Got it. And it though, think a non-GAAP just XX% did be the in of I XXXX any XX%, lower in terms you terms that OpEx. of guess QX wouldn't I for in full-year? XX% reason than

Lior Shemesh

we the time, regard Yes, second we the that are to mentioned to do Partners we of in for the more in half do especially we plan year. as because vertical. that the with year, the going branding second of half weeks, invest And to last said the

So, it's that. reflect

Aaron Kessler

Great. Thank you.

Operator

question of from Mahaney ISI. And our question. for Mark come will moment next our one Evercore next And

is line Your open, Mark.

Mark Mahaney

revenue about outlook that talk Thanks, in order XX. Rule two you Great. Could questions. to the get of growth to

materiality potential of think I implies the very that? Thank three or the you you revenue or mid-teens could of the over the through does, for levels? what to then are And biggest or the to two just ads, on if the that? be mechanics two Google drivers the And next just secondly, would that much. factors it years very cause of talk get there the, guidance growth acceleration, full-year three that kind could for rate modest back maybe your

Lior Shemesh

Okay.

see in the didn't must growth terms to will and in-line what growth leverage order mostly Rule but XX, Day, of the that from partners of coming I Mark, in a For you the XX%, my said both meaning acceleration approximately the business, by first plan achieve margin, of XX obviously in in Analyst Rule question, with much our or achieved operating tell we that very efficiency more I we tremendous gross margins. but into of mostly growth model revenue be during

we It one is started a the as it's of is look, this driver is exact it's for Google – to provide With the of of and but our that of this to don't solutions. mentioned, growth I great our our millions regard monetization ads, business a the customers. dollars. want great Avishai exciting very amount, funnel something

Mark Mahaney

Okay. Thank you, Lior.

Operator

next will our question. question come Stanley. Elizabeth of for next our from moment Morgan One And Porter

is open. line Your

Elizabeth Porter

replacement emerging Thank actually kind helpful very why, referenced current of Wix, AI but harder platform the the much. for you increase technologies, to also market. providing addressable Great. Really is Wix’s you AI opportunity on color

So, could you provide incremental you TAM that who be your today? more type and color to is than expect address that different to user that's able how core on

Avishai Abrahami

course. Of

the to use to to ADI, time. there of I that the for if is sometimes, in we and how template, and the things end much we that have – think And things fix reason Wix personalize day, you the lot come see do of one have of to still users – too Wix go takes they you understand that have you At you lot and a they just it that the want. is finish that always that. to around are even many that a website have right? the of can't reasons that, Some of

understand You for interface the works need user how that? to

complexity advanced making less or addressable users of direction that have reduction don't more is Wix So that of to that are think and something market. the available is that time increasing we one

understand that side functionality. actually well, don't The know opposite use is it exists, it I platform users more right? advanced cannot use the is of but the exactly whether that not the pretty other

an Because think obvious and [ph]. the does opposite, users Wix. that of right? that to or you the don't users I a have specific, need Oh, the and And and actually Wix to time have those have sophistication. – do And are that one on on something have here, on side, to these come it you about, it's we are you you [sophistication] lot not how time application So, to cannot find

Velo using [quoting] to actually website. be they'll [ph] example, into the For

they we answers should I actually more the questions. way have Here, we ability with AI, where think advantage guidance complex them be expose more And give to and that them, into the we get ask detailed going. can

market So, the get quickly, in finish think more towards the go both expansion [indiscernible] and addressable just more people functionality. website other users, I do And a ways of that then advanced to want for words, results. advanced will that

those are allow think into. I both it directions that expand us will to

Elizabeth Porter

of starting Great. you impact that small in partnership year into we model. mentioned the about of BXB it's the And the think XXXX? impact, this today, should And the while then revenue on building how through kind magnitude it's to side,

Lior Shemesh

be in is bookings past, it some you believe see that, I we XXXX, And growing of had to of deals, But growing, this will growing more very dollars. are segment very dollars. overall and going of and we that that Elizabeth, So, able already meaning guess it's and sign if millions nicely. the the more of fast, tens already and that the millions is are more we mentioned like take actually to we XXXX, deal I it

we mention their agreement. start of to people want Wix customers. do to we a to see for and I Nevertheless, less Wix for see to are that multi-year that sign willing actually many moving them

Elizabeth Porter

you. Thank Great.

Operator

next One question. for our moment

next Jeffries will Our Piper Clarke from of come question Sandler.

Clarke. open line Your is

Clarke Jeffries

Hello. for question. the taking Thank you

really improvement there. color in drive ask QX might subscriptions Wondering is apart is improvement changes churn one to maybe to QX? question I but QX if in to ARR. page inflection helpful, is seems or maybe break ARR First cohort specifically the improvement? the jump that I ARR seem off to in you that from could doesn't the it the what for what reflect fully drove net new metric wanted the mean, mean, and creative Lior. the I around

Lior Shemesh

Well, reasons so a there for that. are few

building Wix of growth our might that a more customers. for agencies first better an in websites The I we users, agencies, existing and that we more business, And using creating more more say saw building and it's coming partners also subscriptions. the see one, from see their we existing conversion

point on The third is, also we more positive partnerships mentioned as see is, BXB coming a has from that. the we revenue before effect

three growth reasons. quarter, packages, positive increase like the a obviously a expensive So, more ARPU those that to was has reason] our see [ph] the main more are on impact was And meaning of subscriptions. shift that this the the [four happening like creative we

Clarke Jeffries

follow-up. one just then And Perfect.

the a free and Wondering revenue being you parse-out in cash of OpEx. you half half maybe another if splitting to self-creator of and between the expectations the business? of are and coming there where the of disproportionate self-creator, OpEx characterizing by that of revenue efficiencies amount driven could both you. either on Thank from cost cost terms cost increase from Partner your flow is Partners You're some savings or of

Lior Shemesh

Yes.

of So are this Partners to is We leverage growing. past them, mentioned see going mostly from but are what the I we more this it leverage coming where we both many from times leverage that see more it's in is lot seeing. because getting X more invested and obviously, to Partners. of last vertical the coming we it's And fact exactly years. the this see the mostly in we from Partners fruits a the of business. started building that from more And Partners. And of in and

Clarke Jeffries

Perfect. very much. Thank you

Operator

for our moment One next question.

of next question Trevor from Our will come Barclays. Young

Your open. line is

Trevor Young

Great. Thanks.

cash kind at north high teens, or the all color but maybe flow free after slowed now X% cost to slowing? a which cash the XX%, result on or prior started your you of Ukraine with break and is question. dovetailing Europe on more down Europe of Partner geo Any in-light despite create put mix, compares into just year-on-year Partners self-creator being in can kind the versus And just that a margin, actions, of still ex-FX, then still lapping self-creator Partners bit on First flow XX% some would would items still easier all that maybe modest, – why conflict. headwinds free quite of which negative. declines the that core On itself ex improving of one,

Lior Shemesh

you not are in time, this do the the of breakdown at between two, it Europe, do the of months we flow cash going right. quarter or couple of regard point will question, So, information. to with With and provide regard I'm a sales next promise the free the to provide to I that in first Partners creators or to all

it's the to but effect think the that a Europe war mainly QX the due that's of affecting business. comp I in we overall also obviously tough in see XXXX,

Operator

One our moment for next question.

will Thill question come next from Jefferies. Brent of Our

is line Brent. Your open,

Brent Thill

Thanks.

Nir too early. it's on the question know mentioned back sustainability of a half. still Just I in demand

for visibility linearity And sense beat it us you actual a you but quarter Can can the recovery, like? into April what Lior, want the guidance in more the the to You the than maybe don't you and did raise quarter. of call looked give a to talk happened the just what just May? of ultimately, into

Lior Shemesh

Sure.

as increase is, on now as in us. any didn't that, strong see don't So, we acceleration was you we very see the to a believe We half the way we improvement year, improvement or But to or see take fundamentals I the guidance. improve second provided further now. due last And different what I comp for right in provide it. quarter growth year KPIs, because we count of of that QX guidance the right based the a we our that

a year coming So, to second the it's obviously, to from what again, right see of place due also is May on that. recovery cannot be now. than a I year-over-year about has more continue. looking if that it we been you at took are any kind April, than half more going that. say not stronger assumption basis, good the But of we and

Brent Thill

you. Thank

Operator

for question. of JMP come Boone from moment our Andrew next Securities. And our will question next One

open. Your line is

Andrew Boone

as maybe the the marketing. as of self-creator the to of business, do in ahead questions. AI, talked need out, for thanks context launching secondly, taking of other in you and back-end kind competitors defensible and in of solutions. make more the morning also built of already well terms about what thinking against that build solution, compete the back-end And terms in integration think Good business to my I importance you have guys the about head the then else Avishai, of

and you rest terms we spend about takes of be much. XXXX, the and As revenue think how puts so self-creator of marketing talk about the Thanks about growth? in can we thinking should

Avishai Abrahami

mean vendors? software to just want mean – to quick Headless just first vendor do you a question, the to clarify. a regards add AI to or in In you – I

Andrew Boone

more think broadly. I

think about defensibility of AI – terms else I that your if when think So, what the somewhat Headless back-end online, you coming think think those and you if connected in the about it's about solution, I about talked I creates why what to can but or that attract to that's more else you as dollars? as well need defensible, them Headless wrong, the guys maybe there? make guys platform build you more to I wrong thesis build is talk mean, about

Avishai Abrahami

Well, okay.

now. First of question the I think better all, I understand

the right? that So, things They sign model there's And with databases, you that start] very you things a [ph]. quite basic to to can AI you parts the about things that if basis, to cannot lot have code] thing have that, the to need Headless is [come And there's index is you But need few of a that. lot just do, a do then right, need current running one right, merchants first think [old the with And right, you of to and banks. need data website, booking, APIs. of scheduling right? contracts, so do, processing things also [ph],

to the for simplify because [excluded AI reduce we this provides allows So, the in algorithms going from of is even have to going don't course and while. when something Wix do aligned cost. a element that need better quite every say faster we're I [ph] it's future. But do I to us we'll while, think by] take that like And – just value to quite it That's that a quite that, it something yet. the to get

a on [indiscernible]. be to going lot opportunities there's of Now,

so we of we users have tens them of title] stacks that never and offered that As are [ph] being we quite for Wix. but built software quite fantastic, [on used are millions the itself, a by Headless few

like yes, manage and other have anything of some have. variety booking you to there's where quality some in similar that scheduling what events out e-commerce, like the really to things, But you really right, great and in we a competitors there. cases, have not Now – in case, have competitors ability

value. provide I together one, like business that something then big. and and actually So, on we us allow than which cart, is is quite quite is that There different based that create shopping all the there's one. is of and there because think another all base, we built offer that a think actually integration also them And and is are I to not the channel, think think the people there on the of ability not It's to professionals. not that in that on offered different have a thing is you the standard marketing so that e-commerce value mostly I long-term, website of can provides power And will very just and something the that elements use opportunity for a separate lot Wix. there

Nir Zohar

Andrew, it's Nir.

in as In side on as we Partner as marketing terms of mentioned an also second plan, marketing do in quarter, around segment initiatives the have expect in some increase so see previous and the the the of that half we illustrated Lior we year. the to

off. a cadence which a as quarter really we combination creators, this continue sales is done direct activity, the well that of we've terms as In we and strategy before marketing as paying the acquisition is current will see brand past similar the focus, between

Andrew Boone

you. Thank

Operator

now would remarks. for turn I like Davis to to the call closing back Rona

Rona Davis

and joining, good have a day. for you Thank

Operator

conference for participating. you today's concludes This call. Thank

disconnect. now may You

Wix.com (WIX) 17 May 232023 Q1 Earnings call transcript