Wix.com's Q3 Earnings Surge: AI-Driven Growth and Improved Financial Outlook

Wix Q3 Earnings: Revenue Surge, Margin Expansion, AI Momentum, Raised FY24 Guidance & More - Wix.com (NASDAQ:WIX)

Creative Subscriptions revenue grew 10% to $318.8M, while Partners revenue surged 30% Y/Y, reflecting strong performance across key segments SaaS website builder platform Wix.com Ltd WIX reported its fiscal third-quarter 2024 results. Revenue grew 13% year over year to $444.7 million, beating the analyst consensus estimate of $444.0 million. Adjusted EPS of $1.50 beat the analyst consensus estimate of $1.43. Also Read: XPeng Q3 Earnings: Revenue Beat, 16% Deliveries Growth, CEO Eyes AI Leadership And More Creative Subscription revenue increased 10% Y/Y to $318.8 million. The Creative Subscriptions bookings climbed 15% Y/Y to $326.6 million. Creative Subscriptions ARR was $1.31 billion, up 11% Y/Y. Partners revenue in the quarter was $155.2 million, up 30% Y/Y. Business Solutions' revenue rose 22% Y/Y to $125.8 million, and bookings jumped 17% Y/Y to $123.1 million. The adjusted gross margin increased by 100 bps to 69%. As of September end, Wix.com generated $129.8 million in operating cash flow and held $961.2 million in cash and equivalents. Wix Co-founder and CEO Avishai Abrahami highlighted the company's continued success this year, attributing it to a sharp focus on innovation and the strong performance of key growth initiatives. Studio, a significant growth driver, delivered outstanding results, with bookings from Studio subscriptions showing notable quarter-over-quarter acceleration. New purchases and renewals were particularly robust, with 75% of new Partner bookings coming from Studio accounts, up from the prior quarter. Additionally, the AI onboarding process, featuring the AI Website Builder, significantly improved user experience, driving a 13% increase in conversion rates among recent Self Creator cohorts. Early results from the expanding AI business assistant suite also showed promise, enhancing conversion rates and customer care efficiency. CFO Lior Shemesh reported another strong quarter of accelerating growth and expanding free cash flow (FCF) margins, driven by the effective execution of strategic priorities. Bookings grew to 16% year-over-year, fueled by Studio's momentum, the expanding AI product suite, solid commerce activity, and strong fundamentals. Stable operations supported sequential FCF margin growth to 29% of revenue. Building on this solid performance, Shemesh announced an improved full-year outlook for bookings, revenue, and FCF. Second-half bookings growth is expected to reach 17% year-over-year, with an 18% growth rate anticipated by the end of 2024. These improvements reflect the success of product investments and strong customer cohorts. While surpassing the Rule of 40 this year, Shemesh expressed confidence in further growth acceleration and margin expansion in 2025 and beyond. Related: Wix Is Set for Growth With Expanding Margins and Cash Flow, Analyst Upgrades Stock Outlook: Wix.com expects fiscal 2024 revenue of $1.757 billion -- $1.764 billion (prior $1.747 billion -- $1.761 billion) vs. the consensus of $1.76 billion. Wix.com projects 2024 bookings of $1.822 billion -- $1.832 billion (prior $1.802 billion -- $1.822 billion). The company expects to generate free cash flow, excluding headquarters costs, of $483 million -- $488 million (prior view $460 million -- $470 million). Wix.com expects fourth-quarter revenue of $457 million -- $464 million versus consensus $457.08 million. Wix.com stock gained 56% year-to-date. Price Action: WIX stock traded higher by 12% at $206 premarket last check Wednesday. Also Read: Twitter's Chinese Peer Weibo Q3 Earnings: Beats Expectations, Advertising Stabilizes, VAS Growth Shines & More Market News and Data brought to you by Benzinga APIs

Why Wix.com Stock Jumped to a 3-Year High Today | The Motley Fool

Shares of website building platform Wix.com (WIX 14.93%) jumped on Wednesday after the Israeli company reported financial results for the third quarter of 2024. As of 10:50 a.m. ET, Wix stock was up nearly 14% and topped $200 per share for the first time since late 2021. In Q3, Wix generated more revenue than analysts had expected as well as higher profits. It turns out that the company's generative artificial intelligence (AI) is helping onboard more customers to create websites and adopt other software products. With adoption of its products rising, Wix's management took the opportunity to raise its full-year guidance for multiple metrics after just raising them in the previous quarter. The company previously expected full-year revenue growth of 13% to 14% but now expects 14% to 15% growth. And it also expects a free-cash-flow margin of 27% to 28%, up from its previous guidance of a 26% to 27% margin. In short, it was what investors call a "beat-and-raise" quarter for Wix. And when this happens, stocks normally perform well, as evidenced by the rise in Wix stock today. Investors in software companies such as Wix often focus on something called the "rule of 40." It's a way to balance expectations for top-line growth and free-cash-flow generation. Investors want to see the growth rate and the margin add up to at least 40 because that indicates a good balance of growth and profits. Wix is on pace to hit the Rule of 40 in 2024 -- a full-year growth rate of 14% to 15% and a margin of 27% to 28% adds up to at least 41. But more importantly, Wix is hitting its target a year earlier than expected, which contributed to today's excitement.