Wix.com Ltd. Q3 FY2025 earnings call

• Avishai discussed Vibe Coding, splitting the world into developer and non-developer spheres, and how Vibe Coding enables non-coders to create software. He also mentioned the delay in the new flagship product, expecting it early 2026.
• Nir highlighted robust new user cohort behavior in the core business, organic and paid traffic growth, and Base 44's strong user growth and marketing efforts, including establishing a customer care team and launching campaigns.
• Lior detailed financial results, Base 44's business dynamics (more monthly subscriptions vs. Wix's annual), cost structure impacts on free cash flow and operating profit, and updated guidance for bookings, revenue, and free cash flow.

In the third quarter, total bookings grew to $515,000,000, up 14% year over year. Total revenue reached $505,000,000, also up 14% year over year and above the high end of the guidance range. Partners' revenue grew 24% year over year to $192,000,000. Transaction revenue was $65,000,000, up 20% year over year with GPV growing 13% to $3,700,000,000. Base 44 had its first full quarter under Wix, with over 2,000,000 users globally and expected to achieve at least $50,000,000 of ARR by year-end. Base 44's share of audience traffic to AI-powered application builders is over 10%, up from low single digits in June.

• Raised full-year bookings outlook to $2,062,000,000 to $2,078,000,000 (13-14% y/y growth) from previous 11-13% expectation, driven by Base 44's outperformance.
• Revenue outlook updated to $1,990,000,000 to $2,000,000,000 (13-14% y/y growth).
• Base 44 expected to achieve at least $50,000,000 of ARR by year-end.
• Free cash flow expected ~$600,000,000 in 2025, 30% of revenue.

• Short-term headwinds from Base 44's monthly subscription mix affecting free cash flow and operating profit.
• AI processing and compute costs for Base 44, which are front-end heavy as new users consume more AI tokens.
• Uncertainty around churn for Base 44's monthly subscribers, though early cohorts are better than expected.

Q: Couple on Base 44, dynamics of monthly subs vs traditional annual subs for core Wix and churn expectations.

A: Avishai said at this stage Base 44 leans more to monthly subs, similar to Wix's early days, churn early but cohorts better than expected.

Q: Big picture on Wix reengineering web for AI era, making websites agent-ready.

A: Avishai said Wix websites now indexable by LLMs, adding new standards for e-commerce to be agent-friendly.

Q: Cohort retention trends of Base 44 vs Wix.

A: Nir said early days, similar to Wix's monthlies, better than early days, working on improving retention over time.

Q: WixVibe learnings and Base 44 margin pathway.

A: Nir said WixVibe beta, working on better solutions; Lior said margin drag from hypergrowth, but expecting improvement as growth continues and costs optimize.

Q: Q4 gross margin guidance and duration of margin drag.

A: Lior said drag from high growth, hard to pinpoint duration but margins expected to improve as demands and cost optimizations occur.

Q: Delay in new Self Creator tool.

A: Avishai said delay due to fine-tuning new technologies and AI stuff, entering closed beta soon, expected early 2026.

Q: 3Q cohort commentary and step down.

A: Nir said some seasonality, cohorts behaving as expected with ongoing strength into Q4.