Wix.com 2025 Q1 Earnings Strong Performance as Net Income Surges 41.9%

Wix.com Ltd. reported its fiscal 2025 Q1 earnings on May 21st, 2025. The company posted a total revenue of $474 million, beating expectations with a 13% year-over-year increase. This growth was driven by continued demand for Wix's services and the successful launch of its new AI-powered platform, Wixel. Wix maintained its full-year guidance, projecting revenue growth between 12% and 14%. Despite strong Q1 results, Wix's cautious outlook reflects macroeconomic uncertainties, particularly in the Business Solutions segment.

Revenue

Wix.com's total revenue climbed 12.8% to reach $473.65 million in Q1 2025, compared to $419.78 million in the same quarter of 2024. The Creative Subscriptions segment contributed $337.68 million, demonstrating notable growth, while the Business Solutions segment added $135.97 million to the overall revenue, underscoring its robust performance.

Earnings/Net Income

Wix.com experienced a significant rise in its earnings per share (EPS), up 41.9% to $0.61 in Q1 2025 from $0.43 in Q1 2024, reflecting ongoing earnings growth. The company's net income also showed impressive progress, increasing by 40.7% to $33.77 million in Q1 2025 from $24 million in Q1 2024, marking a notable record for fiscal Q1 net income. The EPS improvement indicates a positive earnings trajectory.

Price Action

The stock price of Wix.com has tumbled 9.21% during the latest trading day, has plummeted 19.66% during the most recent full trading week, and has climbed 3.99% month-to-date.

Post-Earnings Price Action Review

The strategy of investing in Wix when there is a revenue miss and holding the stock for 30 days has shown poor results. This approach yielded a negative return of -2.65%, which is a stark contrast to the benchmark return of 88.13%. The excess return was -90.78%, indicating significant underperformance. The strategy also exhibited a high maximum drawdown of -83.80% and a Sharpe ratio of -0.01, highlighting the considerable risk and negative returns associated with this investment method. Such metrics suggest that investors may need to reassess their approach when considering Wix's stock, especially following earnings announcements that miss expectations.

CEO Commentary

Avishai Abrahami, CEO and Co-Founder, expressed strong optimism about Wix's performance in Q1 2025, highlighting robust demand for the platform despite evolving macroeconomic conditions. He noted significant growth drivers, including the successful launch of Wixel, a visual design platform utilizing Generative AI, aimed at democratizing visual design. Abrahami emphasized a commitment to innovation, stating, "Our goal is to give total control over photo and video editing to everyone." He acknowledged ongoing challenges but maintained a positive outlook, asserting Wix's essential role in helping small businesses succeed online.

Guidance

Wix expects Q2 2025 revenue between $485 million and $489 million, reflecting approximately 11% to 12% year-over-year growth. For the full year, bookings are anticipated to be between $2,025 million and $2,060 million, indicating 11% to 13% growth. Revenue guidance remains at $1,970 million to $2,000 million, or 12% to 14% growth year-over-year. Free cash flow is projected at $590 million to $610 million, representing 30% to 31% of revenue in 2025, as the company adopts a conservative stance amid macro uncertainties.

Additional News

Wix.com recently announced an expansion of its share repurchase program, increasing the authorization by $200 million to a total of $400 million. This move reflects confidence in the company's ongoing operational performance and commitment to returning value to shareholders. Additionally, Wix has launched Wixel, a standalone AI-powered visual design platform, marking a significant expansion beyond website creation. This strategic initiative aims to enhance product offerings and capture a broader user base. Furthermore, the company continues to ramp up its investments in AI technology, focusing on innovation to bolster its competitive edge in the SaaS industry. These developments highlight Wix's proactive approach to sustaining growth and adapting to market trends.