Group 1 - The article discusses the investment potential of Wix.com (WIX), highlighting a "buy" rating due to expected growth in user adoption of its platform [1] - The author emphasizes the importance of sustainable, growth-driven companies in maximizing shareholder equity, aligning with the investment strategy of a family office fund [1] - The article mentions the author's background in high-growth supply-chain start-ups and venture capital, indicating a strong foundation in investment strategy and user acquisition [1] Group 2 - The author has a beneficial long position in WIX shares, indicating confidence in the company's future performance [2] - The article is presented as an independent opinion, with no compensation received for the analysis, reinforcing the credibility of the insights provided [2] - There is a focus on democratizing financial literacy, suggesting that the author aims to make complex financial concepts more accessible to a broader audience [1]

Group 1 - The company aims to invest in firms with strong qualitative attributes, purchasing them at attractive prices based on fundamentals, and holding them indefinitely [1] - The investment strategy focuses on maintaining a concentrated portfolio to avoid underperformers while maximizing exposure to high-potential winners [1] - The company plans to publish articles on selected companies approximately three times a week, including extensive quarterly follow-ups and constant updates [1] Group 2 - The company may rate high-quality firms as 'Hold' if their growth opportunities do not meet the required threshold or if the downside risk is deemed too high [1]

Core Insights - Wix.com Ltd. has acquired Hour One, a leader in generative AI media creation, marking a significant step in Wix's evolution towards AI-driven digital experiences [1][3] - The acquisition provides Wix with advanced technologies that will enhance web and visual design capabilities, positioning the company at the forefront of scalable content creation [1][2] Company Overview - Wix is recognized as the leading SaaS website builder platform, established in 2006, offering a comprehensive suite of tools for users to create, manage, and grow their digital presence [4] - The platform includes features such as advanced SEO, marketing tools, and commerce solutions, enabling users to maintain control over their brand and customer relationships [4] Hour One's Technology - Founded in 2019, Hour One specializes in technology that allows for the creation of studio-quality content at scale, integrating generative AI with advanced 3D rendering [2] - The platform supports personalized video and interactive experiences, enhancing storytelling and real-time engagement [2] Strategic Implications - The acquisition is expected to accelerate innovation within Wix, allowing for higher quality control over technologies and reducing reliance on third-party providers [3] - The integration of Hour One's team, which possesses deep expertise in generative AI and media infrastructure, is anticipated to push the boundaries of content creation [3]

Core Viewpoint - Wix.com Ltd reported fiscal first-quarter 2025 results with a revenue increase of 13% to $473.7 million, exceeding analyst expectations, but adjusted EPS of $1.55 fell short of the consensus estimate of $1.60 [1] Financial Performance - Quarterly revenue reached $473.7 million, representing a 13% year-over-year growth, surpassing the analyst consensus estimate of $472.9 million [1][5] - Adjusted EPS was reported at $1.55, which missed the analyst consensus estimate of $1.60 [1] - Free cash flow was reported at $142.4 million, exceeding the consensus estimate of $135.4 million, reflecting a 30% margin [5] Segment Performance - Creative Subscriptions revenue grew 11% to $337.7 million, while Business Solutions growth slowed to 17.7% year-over-year from 21.5% in the previous quarter [5] - Partners revenue accounted for approximately 50% of GPV, showing a year-over-year growth of 24.0%, down from 29.2% in the previous quarter [5][7] - Self-Creator revenue implied at $302.0 million grew 7.3% compared to 6.8% in the last quarter [5] Guidance and Outlook - Wix reiterated its fiscal 2025 revenue outlook of $1.97 billion to $2 billion, slightly below the analyst consensus estimate of $2.02 billion [1] - Analysts project second-quarter adjusted EPS ranging from $1.38 to $1.84, indicating a cautious outlook for the upcoming quarter [4][6][8][10] - The company expects an acceleration in the second half of 2025, driven by underlying cohort strength and improved Partner trends [3][9] Analyst Ratings - Needham analyst reiterated a Buy rating with a price target of $250 [2] - Piper Sandler maintained an Overweight rating but lowered the price target from $262 to $225 [2] - Cantor Fitzgerald and Citizens analysts maintained Overweight and Market Outperform ratings with price targets of $200 and $250 respectively [2]

Core Insights - Wix.com experienced a significant stock price drop of 16% following the release of its quarterly results, which disappointed many investors despite the overall market decline being only 1.6% for the S&P 500 index [1] Financial Performance - In Q1, Wix.com reported revenue of $474 million, a 13% increase year-over-year, driven by a 12% rise in total bookings to $511 million [2] - The company's non-GAAP net income rose to just under $94 million ($1.55 per share), up from $77.3 million in the prior year [2] - The revenue exceeded Wall Street's consensus expectations of $472 million, but the adjusted net income fell short of the anticipated $1.63 per share [4] Growth Drivers - Wix.com attributed its revenue growth to several factors, including advancements in its artificial intelligence capabilities and the popularity of its Wix Studio design platform [5] Future Guidance - The company maintained its full-year guidance, expecting bookings for 2025 to be in the range of $2.025 billion to $2.06 billion, indicating at least 11% growth over 2024 [6] - Projected revenue for 2025 is estimated to be between $1.97 billion and $2 billion, with the lower end representing a 12% growth [6] - Wix.com anticipates generating free cash flow of $590 million to $610 million but did not provide a net income forecast [7] Market Reaction - Despite Wix.com’s performance exceeding its own expectations, the market's reaction was viewed as overblown, suggesting a potential reassessment of the stock may be warranted [8]

Core Insights - Wix.com reported revenue of $473.65 million for Q1 2025, a year-over-year increase of 12.8% and a surprise of +0.40% over the Zacks Consensus Estimate of $471.78 million [1] - The EPS for the same period was $1.55, compared to $1.29 a year ago, but fell short of the consensus estimate of $1.66 by -6.63% [1] Financial Performance Metrics - Total Bookings reached $510.91 million, slightly above the average estimate of $508.62 million [4] - Creative Subscriptions ARR was reported at $1.37 billion, slightly below the estimate of $1.38 billion [4] - Total Bookings for Business Solutions were $141.44 million, compared to the average estimate of $142.88 million [4] - Total Bookings for Creative Subscriptions were $369.47 million, exceeding the average estimate of $368.37 million [4] - Revenues from Business Solutions were $135.98 million, above the average estimate of $135.06 million, representing a year-over-year change of +17.7% [4] - Revenues from Creative Subscriptions were $337.68 million, slightly above the average estimate of $336.71 million, with a year-over-year change of +11% [4] - Non-GAAP Gross Profit for Business Solutions was $41.87 million, below the average estimate of $42.66 million [4] - Non-GAAP Gross Profit for Creative Subscriptions was $283.98 million, slightly above the average estimate of $283.35 million [4] Stock Performance - Wix.com shares have returned +17.6% over the past month, outperforming the Zacks S&P 500 composite's +12.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Total bookings for Q1 2025 were $511 million, reflecting a 12% year-over-year increase [22] - Total revenue reached $474 million, up 13% year-over-year, exceeding the high end of guidance [23] - Non-GAAP gross margin for Q1 was 69%, consistent with expectations [26] - Free cash flow for Q1 was over $142 million, representing 30% of revenue [27] Business Line Data and Key Metrics Changes - Partners revenue grew 24% year-over-year to $172 million, driven by increased subscription purchases and adoption of business applications [23] - Transaction revenue in Q1 was $59 million, up 19% year-over-year, supported by increasing GPV and improved take rates [24] - Core GPV growth, excluding the impact of a small subsidiary, was 12% year-over-year in constant currency [25] Market Data and Key Metrics Changes - The new user cohort generated $36 million in bookings, a 12% increase over the previous year's cohort [14] - Nearly 5.3 million new users were added in Q1, representing a 7% year-over-year increase [16] - The company maintained a high proportion of high-intent and commerce-oriented users, indicating strong demand in key geographic regions [16] Company Strategy and Development Direction - The company launched Wixl, a new visual design platform, aiming to democratize visual design similar to how Wix democratized website building [6][8] - The introduction of Astra, an AI assistant, is expected to enhance user engagement and reduce churn [11] - The company is focused on continuous product innovation and strategic momentum aligned with long-term growth [5][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand trends observed in early 2025, with expectations for continued growth in new cohorts [19] - There is a cautious outlook regarding macroeconomic uncertainties, particularly affecting the Business Solutions segment [20] - The company aims to achieve a time to return on investment of four to five months for the Q1 2025 user cohort, indicating effective acquisition strategies [17] Other Important Information - The board authorized an additional $200 million for share repurchases, reflecting confidence in cash flow generation and commitment to shareholder value [29] - The company expects total revenue for Q2 to be between $485 million and $489 million, representing 11% to 12% year-over-year growth [28] Q&A Session Summary Question: Can you provide more details on Wixl's rollout and monetization expectations? - Management indicated that Wixl is in early stages, with plans for separate subscription pricing and partnerships to drive user acquisition [32][35] Question: What are the factors behind the deceleration in partners revenue growth? - Management noted that FX impacts and lower-than-expected GPV growth contributed to the deceleration, but remains optimistic about future growth [53][55] Question: How does the company view the competitive landscape for design software? - Management believes that Wix's focus on future-oriented AI capabilities differentiates it from traditional design tools, which may struggle to adapt [60][62] Question: What are the expectations for free cash flow margins throughout the year? - Management anticipates a modest increase in free cash flow margins, driven by revenue growth and operational efficiencies [47] Question: How does the company plan to address macroeconomic uncertainties in guidance? - Management emphasized the importance of conservatism in guidance due to unpredictable macro factors, while remaining confident in current demand trends [49]

Financial Data and Key Metrics Changes - Total bookings for Q1 2025 were $511 million, reflecting a 12% year-over-year increase [19] - Total revenue reached $474 million, up 13% year-over-year, exceeding the high end of guidance [20] - Non-GAAP gross margin for Q1 was 69%, consistent with expectations [23] - Free cash flow for Q1 was over $142 million, representing 30% of revenue [24] Business Line Data and Key Metrics Changes - Partners revenue grew 24% year-over-year to $172 million, driven by increased subscription purchases and adoption of business applications [20] - Transaction revenue in Q1 was $59 million, up 19% year-over-year, supported by increasing GPV and improved take rates [20] - New user cohort generated $36 million in bookings, a 12% increase over the previous year's cohort [12] Market Data and Key Metrics Changes - Nearly 5.3 million new users were added in Q1, marking a 7% year-over-year increase [13] - Strong traction was noted in high-spend geographic regions, particularly in the US and parts of Europe [13] Company Strategy and Development Direction - The company launched Wixl, a new visual design platform, aiming to democratize visual design similar to how Wix democratized website building [5][6] - The introduction of Astra, an AI assistant, is expected to enhance user engagement and reduce churn [9] - The company is focused on continuous product innovation and strategic momentum aligned with long-term vision [4] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand trends observed in early 2025, with expectations for continued growth in new cohorts [16] - There is a cautious outlook regarding macroeconomic volatility, particularly affecting the Business Solutions segment [17] - The company aims to maintain a conservative approach in guidance while acknowledging the potential for strong performance [25] Other Important Information - The board authorized an additional $200 million for share repurchases, reflecting confidence in cash flow generation and commitment to shareholder value [26] Q&A Session Summary Question: Expectations on the rollout and monetization of Wixl - Management indicated that Wixl is in early stages, with plans for separate subscription pricing and partnerships to drive adoption [29][32] Question: Thoughts on the AI landscape in web design - Management acknowledged the evolving AI landscape and emphasized the need for stability and maturity in AI tools before they can be widely adopted [34][39] Question: Free cash flow margins progression through the year - Management expects a modest increase in free cash flow margins, driven by revenue growth and operational leverage [42][43] Question: Factors affecting partners revenue deceleration - Management noted FX impacts and lower-than-expected GPV growth as contributing factors to the deceleration in partners revenue growth [49][51] Question: Differentiators for Wix in the design software market - Management highlighted Wix's focus on future-oriented AI capabilities rather than traditional drag-and-drop editing environments as a key differentiator [58][60] Question: Drivers for self creator growth and conversion - Management emphasized improving the editing environment and simplifying user journeys as key drivers for growth in self creators [82][84]

Core Insights - Wix.com Ltd reported non-GAAP EPS of $1.55 for Q1 2025, missing the Zacks Consensus Estimate of $1.66, but up from $1.29 in the same quarter last year [1] - Quarterly revenues increased by 13% year over year to $473.7 million, surpassing the Zacks Consensus Estimate of $471.8 million and management's guidance of $469-$473 million [2] Financial Performance - Creative Subscriptions revenues, accounting for 71.3% of total revenues, rose by 11% year over year to $337.7 million, while Business Solutions revenues increased by 18% to $136 million [4] - Non-GAAP gross margin improved to 69% from 68% in the prior year, with Creative Subscriptions achieving 84% and Business Solutions at 31% [6] - Non-GAAP operating income was reported at $99.8 million, compared to $69.4 million in the previous year [6] User Engagement and Market Position - As of March 31, 2025, Wix had 288 million registered users, with shares gaining 8.7% over the past year, outperforming the Zacks Computer-IT Services sector's growth of 8.1% [3] - Partners' revenues increased by 24% year over year to $171.6 million, driven by the Wix Studio platform's strong adoption [5] Cash Flow and Shareholder Returns - Cash flow from operations was $145.5 million, up from $113.8 million in the previous year, with free cash flow at $142.4 million [9] - The company repurchased $200 million worth of shares in January 2025 and has authorized an additional $200 million for share repurchase, totaling $400 million [9] Future Outlook - Wix maintains its 2025 revenue growth guidance of 12-14%, estimating revenues between $1.97 billion and $2 billion [10] - For Q2 2025, revenues are expected to be between $485 million and $489 million, indicating an 11-12% growth from the prior year [12]

Core Viewpoint - Wix.com reported quarterly earnings of $1.55 per share, missing the Zacks Consensus Estimate of $1.66 per share, but showing an increase from $1.29 per share a year ago, indicating a -6.63% earnings surprise [1] - The company posted revenues of $473.65 million for the quarter, surpassing the Zacks Consensus Estimate by 0.40% and up from $419.78 million year-over-year [2] Financial Performance - Over the last four quarters, Wix.com has surpassed consensus EPS estimates three times [2] - The company has also topped consensus revenue estimates three times in the last four quarters [2] - The current consensus EPS estimate for the upcoming quarter is $1.84 on revenues of $488.2 million, and for the current fiscal year, it is $7.53 on revenues of $1.98 billion [7] Stock Performance - Wix.com shares have declined approximately 15.3% since the beginning of the year, contrasting with the S&P 500's gain of 1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Outlook - The Computers - IT Services industry, to which Wix.com belongs, is currently in the top 37% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Wix.com's stock performance [5]