Wix.com Ltd. Q2 FY2025 earnings call

• AI-driven advancements are lowering barriers to digital creation, with new cohort growth improving top-line growth trajectory. - Developed proprietary algorithms for AI visibility, setting a first-mover advantage. - Acquired BASE44 in June, which is on track to generate $40-50 million ARR by end of 2025, unlocking new markets like vibe coding. - Strong cohort behavior in Q2, with new cohort bookings up 14% year-over-year compared to Q2 2024, driven by key markets like the U.S., U.K., and Europe. - Existing cohort users performed well with stable retention and longer subscription periods. - AI offerings like the AI marketing agent and Astro drove adoption and monetization.

Total bookings in Q2 2025 grew to $510 million, up 10% year-over-year. Total revenue reached $490 million, up 12% year-over-year. Partners revenue grew 24% year-over-year to $183 million. Transaction revenue was $64 million, up 18% year-over-year with GPV at $3.6 billion, up 11% year-over-year. Non-GAAP gross margin in Q2 was 70%, up from 69% in Q1. New user cohorts showed growth, with over 5 million new users onboarded in Q2, up 6% year-over-year.

• Raised full-year booking outlook to $2.04 billion to $2.075 billion (11%-13% year-over-year growth). - Updated revenue outlook to $1.975 billion to $2 billion (12%-14% year-over-year growth). - Expect Q3 2025 revenue to be $498 million to $504 million (12%-13% year-over-year growth). - Anticipate non-GAAP total gross margin ~69% and non-GAAP operating expenses ~49% of revenue for full year. - Continue to expect free cash flow of $595 million to $610 million in 2025 (30%-31% of revenue).

• Potential impact of intense competition on growth. - Execution risks related to AI initiatives and integration of acquisitions like BASE44. - Uncertainties in organic search traffic trends and their effect on user acquisition.

Q: Dig into GenAI, vibe coding and BASE44, asking if vibe coding replaces drag-and-drop editor.

A: Avishai states it's complementary, with vibe coding strong for applications but website building still needing visual elements.

Q: Asks about Base44 contribution to booking acceleration.

A: Lior says Base44 contribution is not the majority of guidance raise, with growth mainly from new cohorts.

Q: Inquires about AI trends like organic search decline and AI-driven layoffs impacting business.

A: Avishai discusses need for tools to be visible on LLMs and complexity of LLM backends.

Q: Asks about Base44's market fit and TROI.

A: Avishai says Base44 is a strong product with best-in-class experience.

Q: Asks about Studio enhancements and value capture.

A: Avishai talks about Studio roadmap with enhancements for partners.

Q: Asks about Base44's position in the market.

A: Avishai explains Base44 targets non-developers or developers wanting quick prototyping.

Q: Asks about pricing strategy and retention.

A: Nir states retention is stronger than expected and pricing changes had limited impact.