Release Date: May 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Wix.com Ltd (WIX, Financial) launched Wixel, a new stand-alone visual design platform that leverages generative AI, marking a significant product innovation.
- The company reported a 12% year-over-year increase in Q1 2025 bookings, reaching $511 million, indicating strong demand for its platform.
- Wix.com Ltd (WIX) introduced Astro, an AI assistant within the Wix dashboard, expected to enhance user engagement and reduce churn.
- The company saw a 7% year-over-year increase in new users, adding nearly 5.3 million users in Q1 2025, driven by strong product innovation.
- Wix.com Ltd (WIX) achieved a milestone free cash flow of over $142 million, representing 30% of revenue, showcasing strong financial health.
Negative Points
- Despite strong Q1 results, Wix.com Ltd (WIX) expressed caution due to macroeconomic uncertainties, particularly affecting its Business Solutions segment.
- The company faces headwinds from a small subsidiary affecting GPV, with a two-point headwind expected to persist throughout the year.
- Wix.com Ltd (WIX) maintained a conservative outlook for the rest of 2025, despite strong demand trends, due to potential macro volatility.
- The partners revenue growth decelerated to 24% in Q1 2025 from 29% in the previous quarter, impacted by FX effects and slower GPV growth.
- Wixel, while promising, is still in its early stages and may take time to significantly impact Wix.com Ltd (WIX)'s revenues.
Q & A Highlights
Q: Can you provide more details on the expectations and monetization of Wixel, your new visual design platform?
A: Avishai Abrahami, CEO, explained that Wixel is in its early stages and aims to expand Wix's market by attracting users who need sophisticated image editing. Wixel is a separate subscription with its own pricing, and partnerships with companies like Microsoft and OpenAI indicate a strong market need for AI-driven image and video editing tools.
Q: How do you see the AI landscape evolving in web design, particularly with the concept of vibe coding?
A: Avishai Abrahami noted that vibe coding is an exciting but early-stage concept. While it has potential, it currently lacks stability and speed. Wix aims to stay ahead by integrating AI into its platform, allowing for custom code without traditional coding, which could expand market reach.
Q: How should we think about the progression of free cash flow margins throughout the year?
A: Lior Shemesh, CFO, stated that free cash flow margins are expected to increase modestly as the year progresses, driven by revenue growth and operating expense leverage. The company anticipates a slight acceleration in revenue and bookings in the second half of the year.
Q: What level of conservatism is built into your guidance given the strong momentum in April and May?
A: Lior Shemesh emphasized that while Q1 cohort results are strong and improving, macroeconomic factors like FX and trade are unpredictable. Therefore, Wix is maintaining a conservative approach to guidance to account for potential volatility.
Q: How does Wix plan to differentiate Wixel in the competitive design software market?
A: Avishai Abrahami highlighted that Wixel is not just another drag-and-drop tool but is designed with a long-term vision of AI-driven content editing. This approach requires significant changes to user interfaces and underlying technologies, which Wix believes will offer a better experience for users interested in AI-based editing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
