WIX Q2 2025: 5M New Users, 20% Cohort Growth Boosts Q3 Outlook
- AI-powered innovation and product expansion – Wix’s integration of AI elements, such as the AI onboarding funnel, AI marketing agent, and the complementary role of vibe coding and Base44, positions the company to tap into emerging markets and drive robust growth.
- Strong and accelerating user cohort growth – The transcript highlights healthy new user cohort performance with over 5,000,000 new users in Q2 and early Q3 cohort bookings growing more than 20% over prior-year levels, suggesting continued top-line momentum.
- Solid financial performance and margin discipline – The company delivered strong operating metrics—including free cash flow at 30% of revenue and stable conversion/retention trends bolstered by strategic pricing—which supports sustained profitability and investor returns.
- Integration and Clarity Risk with Base44: The Q&A highlighted that while Base44 is contributing to growth, management did not break down its specific impact, leaving uncertainty around how well it will integrate with Wix's core business and deliver expected synergies.
- Reliance on New User Cohort Momentum: Multiple questions underscored that the company’s outlook heavily depends on continued acceleration in new user cohort growth. If this cohort momentum slows or underperforms, revenue growth may be at risk.
- Pricing Strategy and Margin Pressure Concerns: Discussions around targeted pricing optimizations raised questions about the sustainability of pricing actions. Any future missteps or competitive pressures could challenge retention and adversely affect margins.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q3 2025 | $485 million to $489 million | $498 million to $504 million | raised |
Bookings | FY 2025 | $2,025 million to $2,060 million | $2,040 million to $2,075 million | raised |
Revenue | FY 2025 | $1,970 million to $2,000 million | $1,975 million to $2,000 million | raised |
Free Cash Flow | FY 2025 | $590 million to $610 million | $595 million to $610 million | raised |
Rule of 45 | FY 2025 | no prior guidance [N/A] | Achieve Rule of 45 this year | no prior guidance |
Non-GAAP Total Gross Margin | FY 2025 | no prior guidance [N/A] | approximately 69% | no prior guidance |
Non-GAAP Operating Expenses | FY 2025 | no prior guidance [N/A] | approximately 49% of revenue | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
AI Product Innovation and Monetization | Q1 2025 featured products such as Wixel, Astro, and advanced AI tools for website automation. Q4 2024 introduced the AI Site Chat and specialized AI marketing agent. Q3 2024 emphasized an AI website builder and embedded AI assistants. | Q2 2025 highlighted transformative AI initiatives including proprietary generative engine optimization, an AI onboarding funnel, and an AI marketing agent that drive user success and monetization. | Sentiment remains strongly positive with continuous enhancement of AI products. The focus has evolved to include proprietary AI search optimization, indicating a major future growth driver. |
User Acquisition, Cohort Growth, and Conversion Efficiency | Q1 2025 saw nearly 5.3 million new users and strong conversion rates driven by AI onboarding. Q4 2024 focused on targeted marketing and AI-powered website builders to improve free-to-paid conversion. Q3 2024 reported improved cohort performance and a 13% uplift in conversion via AI tools. | Q2 2025 reported over 5 million new users, a 14% YoY growth in user cohorts, and robust conversion efficiency fuelled by AI-driven onboarding tools and marketing agents. | Consistent emphasis on growing user acquisition and conversion efficiency. The positive sentiment is sustained with AI innovations continuing to drive impressive cohort results. |
Financial Performance, Operating Leverage, and Pricing Strategy | Q1 2025, Q4 2024, and Q3 2024 showed steady revenue and margin improvements—with strong bookings, improved ARPS, and consistent operating leverage, complemented by strategic pricing adjustments. | Q2 2025 delivered strong financials with total bookings at $510 million, revenue at $490 million, improved gross margins (70% vs 69%), and modest, well-absorbed pricing optimizations. | Financial performance continues to be strong with incremental margin gains and controlled expense growth. Pricing strategies remain stable and effectively support revenue and profitability. |
Studio Platform and Partner Ecosystem Growth | Q1 2025 highlighted Studio adoption driving partner revenue and bookings growth. In Q4 2024 Studio garnered over 2 million accounts and dominated the partner segment, while Q3 2024 noted that 75% of new partner bookings came via Studio. | Q2 2025 showcased several enhancements to the Studio platform, contributing to 24% YoY growth in partner revenue reaching $183 million, along with continued strong partner ecosystem performance. | The trend remains strongly positive. Studio is consistently evolving and further cementing its role as a key growth engine for the partner ecosystem, with significant long-term impact. |
Integration and Execution Risks for New AI Initiatives | Q1 2025 raised concerns regarding early-stage challenges with emerging AI capabilities (e.g., instability in “vibe coding”). Q3 and Q4 2024 did not explicitly focus on these risks. | Q2 2025 did not explicitly mention any integration or execution risks, although there were references to ongoing investments for integrating initiatives like Base44. | While earlier discussions (Q1 2025) flagged potential integration challenges, the current period downplays explicit risks, indicating cautious optimism while continuing integration efforts. |
Competitive Pressure and Market Dynamics | Previous periods (Q1, Q3, Q4 2024) did not explicitly focus on competitive pressure or market dynamics. | Q2 2025 mentioned proprietary AI algorithms and the Base44 acquisition as ways to capture new markets, along with strong organic traffic and brand awareness improvements. | This is an emerging theme in the current period, showing increased focus on market positioning and differentiation, which could have a significant impact if sustained. |
Macroeconomic and FX Volatility Concerns | Q1 2025 and Q4 2024 included discussions on macroeconomic uncertainties and FX headwinds impacting revenue and bookings. Q3 2024 had minimal discussion on these concerns. | Q2 2025 did not reference any macroeconomic or FX volatility concerns [N/A]. | The diminished emphasis in Q2 2025 could indicate improved market stability or a strategic shift away from these themes in the immediate narrative. |
Shifts in KPI Focus and Subscriber Metric Evolution | Q4 2024 saw a strategic shift away from net subscriber counts toward focusing on cohort value and long-term bookings (e.g., the Q1 '24 cohort delivering $61 million in bookings). Q3 2024 referenced conversion and cohort performance without explicitly stressing KPI shifts. | Q2 2025 did not mention any shifts in KPI focus or changes in subscriber metric evolution [N/A]. | The topic is no longer emphasized in the current period, suggesting a strategic move away from net subscriber metrics towards other performance indicators in prior periods. |
Self-Creators Segment Growth Outlook | Q1 2025 indicated strong momentum for self-creators driven by improved user experience and product innovation. Q4 2024 outlined upcoming product launches and transformative initiatives aimed at driving double-digit growth. Q3 2024 reiterated positive trends and AI-driven improvements. | Q2 2025 did not provide specific details or a growth outlook for the self-creators segment. | The focus on the self-creators segment is reduced in the current period although previous periods demonstrated strong outlooks; future impact remains significant if upcoming product initiatives succeed. |
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Growth Acceleration
Q: What drives strong cohort growth?
A: Management emphasized that robust new user cohorts and solid organic demand, bolstered by strong brand recognition, are fueling accelerated bookings and revenue trends into Q3. -
Base44 Contribution
Q: How significant is Base44’s role?
A: Leadership noted that while Base44 contributes positively, its impact is modest compared to the overwhelming strength of the new user cohorts driving the booking guidance. -
Product Strategy
Q: Does vibe coding replace drag-and-drop?
A: The CEO clarified that vibe coding remains complementary—it enhances the platform by facilitating app and prototype development without replacing the traditional drag-and-drop editor. -
Organic Search & AI
Q: How is organic search affected?
A: Management mentioned a minor decline in organic search traffic, but stressed that the shift toward AI and LLM visibility creates new complexities that Wix’s technologies are well positioned to manage. -
Capital Allocation
Q: What is the plan for convert repayments?
A: The CFO confirmed that the company intends to repay convert obligations with cash from operations, ensuring financial flexibility without resorting to refinancing. -
Pricing & Retention
Q: Will pricing improvements boost retention?
A: Management indicated that recent pricing adjustments had a limited impact, as strong inherent customer value and enhanced conversion rates continue to drive solid retention.
Research analysts covering Wix.com.