Core Insights - Wix.com Ltd. is experiencing strong business fundamentals despite a significant decline in stock price, with cash flow and growth metrics indicating a healthy operational performance [1][11][12] Company Overview - Wix.com Ltd. is a leading provider of cloud-based website development and business management solutions, serving hundreds of millions of registered users globally [6] - The company operates on a scalable, subscription-driven business model, offering a comprehensive suite of tools for users to build and manage their online presence [6] Financial Performance - In the third quarter, Wix reported a revenue increase of 14% year-over-year, reaching $505 million, with bookings growing at the same rate [11] - Free cash flow for the quarter was $127 million, approximately 25% of revenue, and could have exceeded $159 million excluding certain costs [11] - Annual Recurring Revenue (ARR) from Creative Subscriptions rose to $1.46 billion, while Business Solutions revenue increased by 18% [11] Investment Activity - Elwood Capital Partners increased its stake in Wix by acquiring 17,710 shares, bringing its total holding to 40,033 shares valued at $7.11 million as of September 30 [2][3] - The new position represents 4.34% of Elwood Capital's assets under management [3] Market Context - As of the latest data, Wix shares were priced at $105.43, reflecting a 53% decline over the past year, significantly underperforming the S&P 500, which rose by 15% during the same period [3] - The stock has decreased approximately 70% from its 2021 highs, indicating a disconnect between market sentiment and the company's underlying fundamentals [12] Future Outlook - Management anticipates that the AI-driven product Base44 will generate at least $50 million in ARR by year-end, with potential growth towards $100 million due to strong early adoption [11]

It has been about a month since the last earnings report for Wix.com (WIX) . Shares have added about 4.8% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Wix.com due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.WIX's Q3 Earnings Beat EstimatesWix reported non-GAAP ear ...

Core Thesis - Wix.com Ltd. is positioned for growth in the no-code website building market, with a strong user base and innovative offerings driving potential upside in valuation [1][5]. User Growth and Market Position - As of 2024, Wix has 282 million registered users and 6.2 million paying subscribers, benefiting from a user-friendly drag-and-drop interface and a growing professional user base [2]. - Despite a decline in user conversion rates from 2.7-2.8% in 2022 to 2.2% in 2024, overall user growth remains solid at 7% year-over-year, with strong momentum from professional partnerships growing around 30% annually [3]. Financial Performance - Average Revenue Per User (ARPU) has increased approximately 10% annually, driven by subscription price hikes and growing payments adoption, with payments contributing to 20% annual growth on $12.3 billion in Gross Merchandise Volume (GMV) [4]. - Wix's acquisition of Base44 for $80 million is expected to add $40-50 million in Annual Recurring Revenue (ARR) by 2025, contributing an additional 2-3% to organic growth [5]. Valuation and Market Potential - Wix is currently trading at a 6.5% free cash flow yield and 3.8x next twelve months (NTM) revenue, appearing undervalued compared to Squarespace's 5x takeout multiple [5]. - With potential revenue acceleration in 2026, Wix offers a projected upside of 30-50%, driven by innovation and expanding professional adoption [5].

Summary of Wix.com Conference Call Company Overview - **Company**: Wix.com (NasdaqGS: WIX) - **Event**: 2025 Conference on December 02, 2025 Key Points Acquisition of Base44 - **Base44 Acquisition**: Base44 is described as an innovative vibe coding platform that allows users to create applications without coding knowledge, similar to how Wix enables website creation [3][4][5] - **Market Opportunity**: The acquisition opens a significant opportunity for Wix, as applications are more numerous than websites, indicating a larger potential market [5] - **Current Performance**: Base44's annual recurring revenue (ARR) is projected to exceed $15 million by year-end, up from $3 million at the time of acquisition, with expectations to reach $100 million in the near future [15][16] Unit Economics and Market Share - **User Base**: Base44 targets a diverse audience, including freelance developers and small design teams, rather than just traditional developers [9] - **Market Share Growth**: Following the acquisition, Base44's market share in AI-powered application building has increased from low single digits to approximately 10% [10] Marketing Strategy - **Brand Development**: Wix aims to replicate its successful branding strategy for its website builder with Base44, focusing on different customer intents [11][12] - **Marketing Channels**: Investments will be made in various marketing channels, including YouTube, to build brand awareness for Base44 [12] Financial Performance and Margins - **Gross Margin Outlook**: The core Wix business is expected to improve gross margins in 2026, with a projected free cash flow margin in the mid-20% range [26] - **Impact of Base44**: The integration of Base44 is expected to leverage Wix's existing infrastructure, minimizing the need for additional headcount while supporting growth [20] - **Cost Management**: Marketing and AI costs are variable and can be adjusted based on demand, with a current gross margin for paying users estimated at 30%-40% [21][22] Core Business Growth - **Core Business Revenue**: Wix's core business generated $2 billion, with growth driven by improved customer intent, conversion rates, and a stronger brand presence [31][32] - **SEO and Discoverability**: The platform's capabilities in SEO and AI integration are highlighted as key factors for attracting new customers [32][33] Future Outlook - **Product Launches**: A new Self-Creator product is set to launch, with marketing investments expected to be moderate and focused on driving adoption [41] - **Share Buybacks**: Wix has spent approximately $1 billion on share repurchases, with plans to continue this strategy to manage dilution and take advantage of current share prices [38][40] Competitive Landscape - **Market Position**: Wix believes it is gaining market share against competitors like Squarespace, with a focus on enhancing visibility in AI search engines [46] Additional Insights - **Tax Considerations**: The company anticipates a corporate tax rate of around 15% due to OECD Pillar Two regulations coming into effect [44] - **Working Capital**: Current free cash flow margins have benefited from favorable working capital changes, which are expected to normalize over time [28][29] This summary encapsulates the key insights and financial outlook discussed during the conference call, highlighting Wix's strategic initiatives and market positioning.

Core Insights - Wix.com Ltd. is considered one of the best upside stocks to buy currently, despite a recent price target reduction from $220 to $160 by Oppenheimer analyst Ken Wong, who maintains an Outperform rating on the shares [1][2] - The company's Q3 2025 performance showed a 14% year-over-year increase in total bookings to $515 million and total revenue also increased by 14% to $505 million, driven by the strong performance of its Base44 product [3] Financial Performance - Total bookings for Q3 2025 reached $515 million, marking a 14% increase year-over-year [3] - Total revenue for the same period was $505 million, also reflecting a 14% year-over-year growth [3] - Base44, a recent acquisition, attracted over $2 million in users and is projected to achieve at least $50 million in annual recurring revenue (ARR) by year-end [3] Investment Considerations - The market reacted negatively to Wix's performance due to higher-than-expected costs related to AI development and increased sales and marketing investments for Base44, which were anticipated to remain flat [2][3] - Despite short-term spending concerns, there is optimism regarding Wix's core business and its potential for AI monetization leading into 2026 [2]

Financial Performance - Wix.com reported quarterly earnings of $1.68 per share, exceeding the analyst consensus estimate of $1.47 per share [1] - The company achieved quarterly sales of $505.194 million, surpassing the analyst consensus estimate of $502.682 million [1] - Wix.com raised its FY2025 sales guidance from $1.975 billion-$2.000 billion to $1.990 billion-$2.000 billion [1] Strategic Initiatives - The CEO of Wix, Avishai Abrahami, emphasized the company's mission to democratize technology through advanced AI and natural-language development with the introduction of Base44 [2] - The company aims to eliminate barriers of complexity in accessing advanced technology [2] Analyst Reactions - Needham analyst Bernie McTernan maintained a Buy rating on Wix.com but lowered the price target from $200 to $140 [5] - Citizens analyst Andrew Boone maintained a Market Outperform rating and cut the price target from $210 to $185 [5] - Benchmark analyst Mark Zgutowicz also maintained a Buy rating while lowering the price target from $230 to $185 [5]

Core Viewpoint - Wix.com raised its full-year bookings and revenue outlook following strong third-quarter results, driven by increased demand from its AI coding platform Base44, despite a significant drop in share price [1][2]. Financial Performance - For 2025, Wix expects bookings to be between $2.06 billion and $2.08 billion, an increase from the previous range of $2.04 billion to $2.08 billion [2]. - The full-year revenue forecast has been raised to $1.99 billion to $2.00 billion, compared to the earlier guidance of $1.98 billion to $2.00 billion [2]. - Third-quarter revenue was reported at $505.2 million, with total bookings rising to $514.5 million [4]. Growth Metrics - For the fourth quarter, Wix projects revenue between $521 million and $531 million, indicating a year-over-year growth of 13% to 15% [3]. - Creative Subscriptions revenue increased by 12% to $356.2 million, while Business Solutions revenue grew by 18% to $149 million [4]. - Creative Subscriptions annual recurring revenue reached $1.48 billion, reflecting an 11% year-over-year increase [4]. Cost and Margin Expectations - The non-GAAP gross margin for the year is expected to be between 68% and 69%, influenced by increased AI-related costs from Base44 [3]. - Non-GAAP operating expenses are projected to be approximately 50% of revenue, with free cash flow expected to reach about $600 million, or around 30% of revenue [3].

Key Points Wix.com stock fell as much as 21.7% despite beating Q3 earnings expectations and raising full-year guidance. CEO Avishai Abrahami admitted he's "clearly unhappy" about delaying a flagship product from summer 2025 to 2026. Wall Street wanted evidence of accelerating growth from Wix's new initiatives but didn't get it. 10 stocks we like better than Wix.com › Shares of Wix.com (NASDAQ: WIX) took a hard fall on Wednesday, Nov. 19. The Tel Aviv-based company, which provides software-as-a-se ...

Core Insights - Wix.com Ltd. is a leading global platform for creating and managing digital presence, offering services like website building, hosting, and design tools, competing with platforms such as Squarespace and WordPress [1] Financial Performance - On November 19, 2025, Wix reported an earnings per share (EPS) of $1.68, surpassing the estimated $1.45, indicating strong financial health and operational efficiency [2][6] - Wix's revenue for the period was approximately $505.2 million, slightly below the estimated $526 million, suggesting potential market challenges or impacts from strategic investments [2][6] Growth Metrics - The company experienced a 14% year-over-year increase in total bookings and revenue, driven by strong new cohort behavior and the success of its coding platform, Base44 [3] - Base44 has rapidly gained popularity, with over 2 million users and more than a thousand new paying subscribers joining daily, positioning it to achieve at least $50 million in annual recurring revenue (ARR) by year-end [3] Valuation Metrics - Wix's price-to-earnings (P/E) ratio is approximately 42.67, reflecting investor confidence in its earnings potential [4] - The price-to-sales ratio stands at about 3.78, indicating the value placed on each dollar of sales, while the enterprise value to sales ratio is around 3.94 [4] Financial Structure - The company has a negative debt-to-equity ratio of -8.50, suggesting a distinctive capital strategy [5] - Wix's current ratio is approximately 0.81, indicating its ability to cover short-term liabilities with short-term assets [5] - An earnings yield of about 2.34% demonstrates a solid return on investment, underscoring its financial stability and growth potential [5]

Financial Data and Key Metrics Changes - Total bookings grew to $515 million in Q3 2025, up 14% year-over-year, driven by robust new user cohorts and better-than-expected results from Base44 [15][22] - Total revenue increased to $505 million, also up 14% year-over-year, exceeding the high end of guidance [15][22] - Non-GAAP gross margin in Q3 was 69%, slightly down from 70% in Q2 [18] - Free cash flow for Q3 was $159 million, or 32% of revenue, an increase from 30% last quarter [21] Business Line Data and Key Metrics Changes - Partners' revenue grew 24% year-over-year to $192 million, driven by traction among professional designers and solid Studio adoption [16] - Transaction revenue was $65 million, up 20% year-over-year, driven by 13% growth in GPV [16] - Base44's share of audience traffic increased to over 10% in October, up from low single digits in June [10][12] Market Data and Key Metrics Changes - Organic traffic improved as more users searched for Wix online, indicating enhanced brand awareness [9] - Base44 serves over 2 million users globally, translating to more than 1,000 new paying subscribers daily [12] Company Strategy and Development Direction - The company aims to democratize software creation through Vibe Coding, enabling users without coding knowledge to build applications [3][5] - Base44 is positioned as a leader among low-code tools, with significant growth potential in the AI-powered app building space [6][10] - The company plans to enhance its marketing efforts to capture stronger-than-anticipated demand for Base44 [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of the core business and the ability to enter new markets effectively [14] - The company raised its full-year bookings outlook to $2,060-$2,078 million, reflecting strong performance from Base44 [22][23] - Management anticipates improved operating and free cash flow margins over time as AI costs decrease and marketing investments normalize [21][24] Other Important Information - The company issued $1.15 billion in 0% convertible senior notes due 2030, with plans to use the cash for business purposes and share repurchases [22] - The anticipated launch of a new flagship product has been delayed to early 2026 due to technical challenges [7][70] Q&A Session Summary Question: Dynamics of monthly vs. annual subscriptions for Base44 - Management noted that most Base44 users are currently on monthly subscriptions, with expectations that they will transition to annual plans over time as trust in the platform grows [28][30] Question: Cost management and AI compute expenses - Management acknowledged that while AI costs are currently high due to new user consumption, they expect to reduce these costs over time through various strategies [31][35] Question: Vision for Wix in the AI era - Management highlighted efforts to ensure that all Wix websites are indexable by LLMs and to continuously add new e-commerce standards to enhance visibility [39][40] Question: Cohort retention trends for Base44 - Management indicated that retention trends for Base44 are similar to those seen in early Wix cohorts, with expectations for improvement as brand recognition grows [42][43] Question: Pathway to improving Base44 margins - Management discussed the need for time to see improved margins as the user base matures and costs stabilize, with expectations for better profitability in the future [48][53] Question: Impact of hyper-growth on margins - Management confirmed that while there will be short-term margin pressure due to high growth and new customer acquisition costs, they anticipate margin improvement as the business scales [56][66]