Key Points
- Revenue for Q2 2024 was $435.7 million, exceeding management's high-end guidance of $435 million.
- Q2 2024 bookings increased 15% y/y to $458.4 million, aligning with updated guidance.
- Q2 2024 free cash flow was $112.8 million, contributing to the updated full-year FCF guidance of $460 - $470 million.
Wix.com (WIX +4.22%), a leading web development platform, released its Q2 2024 earnings on August 7, 2024. The company reported revenue of $435.7 million, surpassing the high end of management's guidance ($431 - $435 million) with a 12% year-over-year increase. Bookings for the quarter were $458.4 million, representing a 15% increase from the prior year. Additionally, free cash flow for Q2 was $112.8 million, reflecting robust operational efficiency and aligning with the updated full-year guidance. Overall, the quarter depicted strong performance driven by innovative product initiatives and strategic growth in key areas.
| Metric | Q2 2024 | Management's Expectation | Q2 2023 | % Change y/y |
|---|---|---|---|---|
| Total Revenue | $435.7 million | $431 - $435 million | $390 million | 12% |
| Total Bookings | $458.4 million | $1,802 - $1,822 million (full year) | $398.5 million | 15% |
| Free Cash Flow | $112.8 million | $445 - $455 million (full year) | $78.1 million | 44% |
| GAAP Net Income | $24 million | $(10.4) million | n/a | |
| Source: Expectations based on management's guidance, as provided in 2024-05-20 earnings report. |
Company Overview
Wix.com Ltd. provides a comprehensive web development platform enabling users to create, manage, and grow their online presence. Its offerings range from website builder tools to business management applications and integrated e-commerce solutions. The company's primary focus areas include enhancing user engagement through AI-driven products, expanding its commerce platform, and driving higher conversion rates among users.
Recent strides include the launch of Wix Studio, an advanced platform for agencies and designers, along with AI Business Assistants aimed at improving user experience and operational efficiency. The company’s monetization strategy revolves around an array of products and services like Wix Payments and other business solutions driving diversified revenue streams.
Q2 2024 Performance Highlights
During Q2 2024, one of the most notable achievements was an increase in revenue to $435.7 million, which exceeded management's high-end guidance and showed a 12% year-over-year growth from $390 million in Q2 2023. Bookings for the quarter rose to $458.4 million, a 15% increase year-over-year, driven by robust demand for both creative subscriptions and business solutions.
Creative Subscriptions Revenue rose to $312.1 million, up 9% year-over-year, while Business Solutions Revenue increased by 20% year-over-year to $123.6 million. Transaction Revenue within this segment saw a noteworthy rise of 21% year-over-year, hitting $53.9 million. This increase in diverse revenue streams demonstrates the company's ability to attract and retain a broad user base, adding multiple subscriptions per account.
The company also saw significant advancements in its product offerings, notably with the new Wix Payments partner contributing to a record take rate of 1.68%. Moreover, AI-driven products enhanced the user creation process while reducing support costs, allowing the company to maintain technological leadership in the competitive web development space.
On the expense side, Non-GAAP Operating Expenses were approximately 50%-51% of revenue, indicating operational efficiency. Free Cash Flow for the quarter was $112.8 million, with an adjusted FCF of $117.8 million once HQ costs were excluded.
It’s crucial to note that Wix.com Ltd. also witnessed margin improvements with its GAAP Gross Margin at 67% and Non-GAAP Gross Margin at 68%. These high margins underscore effective monetization strategies and sustained profitability.
Looking Ahead
Looking forward, management increased its full-year 2024 revenue guidance to $1,747 - $1,761 million, reflecting a 12-13% year-over-year growth. Q3 2024 revenue is expected to be between $440 - $445 million, indicating similar growth momentum. The company also updated its full-year bookings guidance to $1,802 - $1,822 million, suggesting continued acceleration.
Further margin expansion is anticipated, with Non-GAAP Gross Margin expected to be 68-69% and free cash flow projected at $460 - $470 million or 26-27% of revenue. Investors should keep an eye on sustained developments in AI integration, new product launches, and improved monetization strategies, which are likely to drive progression in the coming quarters.
