Wix(US:WIX)2025-11-19 14:30Financial 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][16] - Total revenue increased to $505 million, also up 14% year-over-year, exceeding the high end of guidance [15][16] - Non-GAAP gross margin in Q3 was 69%, down slightly from 70% in Q2 [18] - Free cash flow was $159 million, or 32% of revenue, an increase from 30% last quarter [20] 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 from low single digits in June to over 10% in October [11][12] Market Data and Key Metrics Changes - GPV grew 13% year-over-year to $3.7 billion, with partners contributing approximately 55% of total GPV [16] - 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][11] - The company is focusing on building a comprehensive brand and marketing function for Base44 to capture a larger market share [12] 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] - Expectations for free cash flow are approximately $600 million for 2025, or 30% of revenue [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 potential M&A opportunities [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 on monthly subscriptions, with expectations that as trust builds, more users will transition to annual plans [26][27] Question: Churn rates and subscription dynamics - Churn is currently higher than Wix's standard, but management is optimistic about future retention as the product matures [27][28] Question: Pathway to improving Base44 margins - Management indicated that as Base44 matures, margins are expected to improve, with a focus on reducing AI costs and optimizing the customer mix [49][53] Question: Impact of hyper-growth on margins - Management acknowledged that while there will be short-term margin pressure due to high growth, they expect margins to improve as the business scales [56][66] Question: Delays in the new self-creator tool - The delay is attributed to fine-tuning technology and addressing technical challenges, with a confident outlook for a launch in early 2026 [70] Question: Retention trends for Base44 cohorts - Early retention trends for Base44 are similar to those seen in Wix's early days, with expectations for improvement as brand visibility increases [43][44]