Wix(US:WIX)2024-05-20 14:45Financial Data and Key Metrics Changes - Total bookings in Q1 2024 reached $457 million, growing 10% year-over-year and exceeding expectations [31] - Total revenue was $420 million, up 12% year-over-year, also above guidance [31] - Free cash flow margin reached a record 26% this quarter, driven by strong top-line growth [30][53] - Non-GAAP gross margin was 68%, consistent with expectations for the full year [13] - Non-GAAP operating income increased 43% year-over-year, representing 17% of revenue [13] Business Line Data and Key Metrics Changes - Partners revenue grew 33% year-over-year, significantly contributing to overall growth [31] - The Q1 2024 user cohort generated over $32 million in bookings, 6% higher than the Q1 2023 cohort [7] - Average Revenue Per Subscription (ARPS) increased due to robust commerce growth, with Gross Payment Volume (GPV) growing 14% year-over-year [9] Market Data and Key Metrics Changes - The company is experiencing strong performance from existing user cohorts, with the Q1 2023 cohort generating over $83 million over five quarters, 5% higher than the previous cohort [8] - The take rate improved to 1.58%, an all-time high, as more merchants opted for Wix payments [9] Company Strategy and Development Direction - The company is focusing on AI product innovation, with a strong emphasis on the AI website builder and other AI tools to enhance user experience [24][25] - Wix Studio is performing ahead of expectations, with over 1 million accounts created, indicating strong market share growth [25][31] - The company plans to continue investing in its Studio brand and AI capabilities to drive future growth [14][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the macro environment, which has allowed for the execution of growth initiatives [29] - The company anticipates accelerating bookings growth in the second half of 2024, with expectations for strong revenue growth in 2025 [12][32] - Management noted that user retention following recent price increases has been better than expected, contributing to increased guidance [98] Other Important Information - The company is committed to allocating 50% of free cash flow generation through 2025 to share repurchases [33] - The anticipated share count by the end of 2024 is projected to be between 62 million and 63 million [15] Q&A Session Questions and Answers Question: How does the company view the Studio and partner opportunity today compared to six months ago? - Management indicated that Studio is performing better than predicted, with significant growth in registered accounts and market share [18] Question: What is the impact of AI tools on monetization and user retention? - Management noted that AI tools have led to better retention and monetization, with expectations for accelerated creative subscriptions as a result [37][38] Question: How does the company expect to achieve revenue growth acceleration in 2025? - Management stated that most of the acceleration in bookings is expected to come from creative subscriptions, driven by the adoption of Studio and AI tools [55] Question: What is the sustainability of the marketing efficiency? - Management expressed confidence in the sustainability of marketing efficiency, attributing it to the strength of the global brand and ongoing optimization efforts [87] Question: How is the company addressing the competitive landscape? - Management believes that most market share is coming from agencies using legacy systems, and they plan to enhance brand awareness and product innovation to capture more market share [70]