Q2 2023 Wix.com Ltd Earnings Call
Good day, and thank you for standing by.
Welcome to the weeks Q2 2023 earnings conference call.
This time, all participants aren't listen only mode.
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Now like the hand, the conference over to Emily loop.
Relations. Please go ahead.
Thanks, and good morning, everyone welcome to the second quarter of 2023 earnings call. Joining me today to discuss a result.
[noise] Hermie C E O and cofounder yours, O'hare, our president and C O L and New York's Amish R. C. S L.
During this call we may make well, we're looking statements and these statements are based on current expectations and assumptions. Please consider the risk factors include it in our press release and most recent form 20-F that could cause our actual results to differ materially from these forward looking statements.
We do not undertake any obligation to update these for the billing statement.
In addition, we will comment on non-GAAP financial results key operating metrics you can find all reconciliation between our gap and non-GAAP results in the earnings materials and in our interactive enlist center on the Investor Relations section of our website investor's Dot <unk> dot com.
With that I'll turn the call over to obviously.
Thanks, Emily and good morning, everyone. We continue.
Built up over the past few quarters English drunk future exceeding expectation is should we accelerated both profitability and growth for secrets, but.
For the third consecutive quarter.
If you're a detriment to our focus commitment to our growth strategy, while balancing operational efficiency revenue and give to group to $390 million above archive.
We generated more than $49 million or free cash flow or 30 per cent of revenues also after forming expectations.
Ah meaningful drivers of this drunk before marriage this quarter. It was our partners business, which group revenues 36%.
A year and cute too.
For the last several years that a partner businesses grow.
We have been listening to our partners.
And in a wedding on set of solutions tailored, especially for professionals.
This has led to the lunch or one of our most significant products released isn't there last few years, which studio the new corner store lots of them.
Partners.
Experience.
Which studio.
The first of its kind web creation and development platform men, especially especially.
Specifically for.
[noise] agency didn't feel that it is an orange one platform for professional to create websites.
Easily collaborate and delicate team.
Workflows and clients killed and grow their business more efficiently.
I Wanna share a bit more about how weak studio kept alive for years ago. We watch addict works Tuesday, we have gained significant traction, which agency and designers and have learned a great deal about the types of projects debut.
About their needs and designing control and about how the.
They are they.
They run their business.
We learned that agencies and freelancers need more than just a high end design environment, they need tools to monitor grow their business.
The knowledge, we have gained is enable us to make significantly forward you know offering for bonus, which we know deliver would wake studio, which did you bring so much more agencies are peanuts and one platform.
Then we.
We believe anyone else has ever offered.
The week studio addict or provide a super way to do complex things online with layers of control over all aspects of design.
While still a long in depth sophistication of it it just certification of editor eggs for the most advanced users one.
One of the hardest issues the agency had.
They should keep it consistent design of course Multiplus concerns we are greatly simplifying this challenge with US once you the item March.
Which studio.
Also includes a full set of native business solutions are supported.
Infrastructure.
Like which tours and week's bookings.
Well, there's the ability to it.
Williams.
For specific business logic that is sometimes made it for clients wait studio for developing nuclear abilities and tools to create custom applications better and faster for that we've introduced weeks I D. Okay.
A complete.
<unk> professional development and find bench or via scored utilized using weeks I D. Developers can extend the functionality of Venus solutions, using hundreds or a P. I.
[noise] integrations.
With integrated AI here as well developed that can use in a high powered could assistant derived cleanup quote and detect errors.
With weeks blocks partners can create custom component Richardson that can be reused on multiple sites.
<unk> can even sell the ops, they create using weeks blocks to millions of which users.
Finally, which studio he's made specifically for professional built sites for a living.
The week studio workplace includes powerful dashboard to manage clients projects and teams.
Which is also accessible dedicated week studio mobile app.
And for when an agency turns over the site, which do do includes a client facing dashboard an anecdote with features such as if we get it with July client to make changes to the site on their own and the ability for the agency.
<unk> for their client Justice video guys into Toyota.
These are just some of the many ways to get with all of our partner needs for barely Comex project to magic flying relationships.
All in one place these capabilities are built with all types of.
Agencies across all speciality and skill set in mind no.
Just design experts right credibly proud and excited for the release of week studio and.
And we believe it would be a meaningful drive it.
Well continue to grow with partners.
In addition to week studio, we also made it meaningful strides in all of our AI innovation squares, we did not smoke Oh, Hey, I saw generator and AI system for businesses.
Just two of among many other exciting products in our pipeline, we'd be rolling out to a user let it issue.
They said.
Ready robust suite of AI, and Ginny I'd products developed over the past decade.
Image that keep part of our growth strategy for both Securitas and partners alike.
There are so many more exciting features and highlights of weeks studio.
As well as our AI pipeline and vision.
And we'll be shaved more details and some demo next week I'm always day I Hope you will join us there.
Excellent.
First half of the year behind Us I'm confident in our ability to continue this momentum and even axelrad profitable growth for the rest of 2023, so again, raising our revenues and free cash flow.
The familiar.
The outperformance of the last few quarters put us on the path to achieving.
The rule of 42025.
They are a very exciting thing still to come this year and only made possible by incredible team here that works. So thank you for your hard work and dedication to all users with that I'll turn it over to New York to speak more about per day fondant business milk.
Thank you I'll be shy and thank you everyone for joining us today I want to start by sharing a bit more about the significance of weeks studio for business.
And then I'll share more about the this quarter's performance.
Why professionals have always use the weeks platform over the last several years, we've invested significantly into infrastructure product development and marketing to expand our town by building to go to platform for professionals.
Last year, we presented how the partner cohorts generates compounding growth.
This compounding growth is inherent to the difference between partners and south creators.
Partners take on more and more projects over time, and therefore, each partner generates more subscription revenues over the lifetime of the cohort.
Partners websites also deliver higher G. P V and they have a deeper grasp of advanced capabilities adopting more business solutions and generating hire a a a R. P S across the board.
We continue to see this behavior and we still <expletive> and we will share more it's our analysts day next week.
But can I shall results from all of these have been outstanding as partners now make up 30% of our total revenue and continued to grow.
Growth is a testament to the success for foreign investment.
Rick studio represents an important milestone in this journey.
With weak studio, where not only delivering to partners and updated powerful design and development experience with AI technology. We are also bringing something completely new that means their specific needs.
We do weeks to do your work space and a set of new work flow tools that will help agencies manage their business scaling grow we believe week studio is a unique offering that no one else provide.
And there will be much more to come we will continue to add products and tools two weeks studio as our partners grow with us.
We believe that this product will enable us to enhance the partner corporate behavior I described before as well.
Grabbed even more market share and accelerate the penetration into this massive tan.
Moving onto the quarter, starting with a cohort performance.
R Q1, 23 use a cohort generated $42.5 million in accumulated bookings any first two quarters, ending and cute too.
This was approximately six per cent higher than that of the Q1 22 court in its first two quarters <unk>.
Despite the.
Q, what 23 chords containing about 13% fewer users compared to the Q1 22 court and lower acquisition marketing investment.
Benefited from solid conversion of new and existing users and continued growth in bookings for subscription and stable retention.
These fundamental showed the positive returns from our focus on bringing higher intense self theaters.
And black partners, which convert it's higher rates as well as higher monetization driven by favorable pricing mix.
Adoption of business solutions applications more transaction revenue as a result of higher G. P V and increased decreased.
And continued concrete contribution from our B two b partnerships.
Finally, this quarter's performance again demonstrates the strength and scale of our global brand is reflected in the success of our marketing strategy shift implemented last year.
With that I will now hand, it over to the or to walk through our financial and outlook Your <unk>.
<unk>.
I'll show, you mentioned and we continue to make progress in the D. C trying to execution of profitable growth strategy in Q2.
With growth and profitability accelerating for another consecutive quarter.
Continuing to meaningfully expand margin will ultimately drive us to reach the full 225 under a variety of scenarios.
As our analysts a day next week I will show you, how we plan to reach <unk> from where we are today.
This quarter, we accelerated gross profit margin further.
Nearly 580 bakery spoons year over year, as we continue to hosting optimization and benefited from the cost efficiencies completed over the past year.
non-GAAP operating expenses as a percentage of revenue decline meaningfully from 66% in Q2 2022, 51% in the queue to 2023.
This decline was the result of continued execution O'farrell streamline marketing strategy and decor savings actions executed over the past year and completed last quarter <unk>.
<unk> drove us to log in your record how you for quarterly non-GAAP operating income.
Additionally, we achieved the first quarter of positive GAAP operating income in weeks and weeks history.
This milestone demonstrate strategy, we've taken <unk> profitability, which we believe we are very close to achieving.
non-GAAP operating expenses also declined more than 300 basis points sequentially from increased operating leverage our revenue grew 13% year over year, while operating expenses remains stable.
This outperformance in Q2 pets, often incredibly strong first half to 2023 with free cash flow generation of 93 million or 12% of Avenue, which was better than expected Excitingly, we expect to accelerate margin expansion into the back half of the year as we drive further.
We live rich.
Now onto the details of the quarter total revenue of 319 million exceeded top end of our guidance range by 5 million is that we continue to execute no strategic initiatives without <unk> business performing exceptionally well that'll <unk> 398 immediate in the queue to up 12%.
Year over year.
And also a bulb I'll look for that station.
If you just heard Neal speak about in detail.
Almost business continue to outperform as it remained a key strategic focus through us due to better fundamentals and increase output.
True increased beasley solution attachments, and mold GPC generation, thousands revenue growth accelerated to 76% year over year.
We expect meaningful to continuously improve the week experience for proficient us two new product payload for their needs such as a new studio platform.
Both of those G P regrowth strange across Geography's, a cool mil severity colors as well as I ever. It should you be refill cited drove overall G. P V to increase 10% year over year to 2.8 billion in queue to idle G. P V and it continued increasing decorate as <unk>.
More merchants choose weeks payments will be loaded in accelerating the transaction revenue growth of 21% year over year more than $44 million.
Strong growth and creative subscription a L. L continued this quarter accelerating through 10% year over year as we continue to benefit from strong cold behavior price increases and growing revenue contribution for positive <unk>.
<unk> knew a growth in Q2 2023 was approximately 66% yoga you. We expected letting you are to continue its meaningful year over year growth through the rest of the twin twenty-three as incremented subscriptions from all ramping thousands of business Leah into our course.
Self created obese.
On top of accelerating revenue in booking could walk. We also saw an acceleration in mountain expenses as well in Q2.
To continue the hosting optimization and benefits from previously completed headphones deficiencies throughout the past year.
non-GAAP gross margin increased to 68% it didn't get another 160 basis points on top a few unrecorded height, and approximately 580 basis points a year over year.
non-GAAP, creating subscription gross margin increased to 83 per cent, marking at 230 basis for an expensive sequentially and malden 700 basis points year over year.
This improvement was driven by strong revenue wrote in this segment as well as continue hosting efficiencies.
Not a gap operating margin improved nearly 470 basis points quarter over quarter to 18% of revenue in queue to this was mainly driven by continued execution of a streamline marketing strategy focused on hiring <unk>.
Q to surpass last quarter record the iPhone non-GAAP operating income.
As a result of continued growth and profitability acceleration, we generated over 14 90 million dollar will free cash flow or 17% of revenue. This exclude capex related to the build out of headquarters as well as the remaining cash portion of the one time February charges related to the headphones redux.
Can we announced in February .
Free cash flow performed better than expected again this quarter, giving the full confidence you know.
Ability to achieve do the 14th 2025 accelerating free free facial growth in explaining <unk> over the past three quarters demonstrates the strength of our business and the success of cost efficiency action executed over the past year.
Which has been completed.
Now, let me finish with our outlook for Q2 and 2023, we expect total revenue in Q3 to be 386 million 391 million, representing approximately twist to 17% <unk>.
For the food you we are increasingly I'll outlook again, we now expects total revenue to be approximately 1.543 billion to $1.558 billion.
Presenting.
Proximity, 11% to 12% year over year growth. This is an increase from our privacy expectation of 1.52 billion to 1.5.
Four $3 billion or 10% to 11% growth with this new guidance, we expect revenue growth in the second half of the U two accelerate compare to the first half of the year.
Additionally, we are also operating profitability expectation for the food you as we feel operating leverage from the cluster actions completed over the past year as we scale, we know anticipate non-GAAP gross margin it'll be approximately 68% for the 40 year up from a previous expectation with 67%.
Driven by increased profitability across the both creating subscriptions and business solutions.
We know anticipate creative subscription gross margin to be approximately 82% up from our previous expectation of 81%.
So business solution, we expected gross margin of approximately 28%.
Our previous expectations, 27%.
Full year non-GAAP operating expenses and I would expect it to be down year over U 256% to 57% of revenue compared to 57, 258% of revenue.
This the expected driven by low marketing expenses and operational leverage from previously completed close sections.
As a result of high revenue growth. In addition of profitability improvements we are increasingly outlook for free cash flow for clinical any 322 hundred.
Two $210 million or 13% of revenue exiting the year with a free cash flow of biology of approximately 15%.
This compares to a previous expectation of 172 million to 180 million or 11% to 12% of revenue and an exit margin of approximately 17%.
This I believe his guidance, we expect reschedule module to accelerating the second half of the year compared to an already very stronger profitable first half.
Without cost efficiency plan, now complete and behind us.
The operating cost in the second half of the year will reflect the necessary Ron right to drive meaningful operating leverage going forward and carry us to achieve the rule of faulty in 2025.
Additionally, stock based compensation is expected to decrease to 14% of revenue into any twenty-three versus a previous expectation of 14 to 15 per cent.
Finally, we are committed to increasing free cash flow pills show going forward all updated the guidance called bandwidth all share repurchase activity.
Year to date positions as well to generate over $3 or free cash flow bill sure into any twenty-three.
And if we can increase over 2022 free cash flow per share or 51 cents, we will share more about our plans to increase free cash flow <unk> 220, 25 at our upcoming analyst and Investor base.
I'm extremely pleased with the results and accomplishments we've made on all fronts over the first half of the year and I'm looking forward to continued growth profitability acceleration.
In the back half.
Okay now ready for questions.
Thank you <unk>.
Now conduct a question and answer session.
As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to.
To withdraw your question. Please press star one one again.
Please stand by while I compiled a roster.
Our first question comes from Matt for.
From William Blair. Please go ahead.
Okay, great. Okay, great. Thanks for taking my question.
Results wanted you ask first on which studio and what are the monetization plans here is it's something that you're gonna charge for some of these features separately or is it more of a plan to help her partner spring more subscription on your platform. Thanks.
Hey, Matt It's it's me or so in terms of how we think about the pricing of modernization. So the pricing for studio at this point is gonna be the same as it was for any sore X.
And the way, we think about the magenta monetization and I think it also Ah Ah tightly relate to what I spoke about before in terms of the corporate behavior partners.
We are by introducing studio we believe that we can we can be much more attractive for these bargainers supposedly designers and agencies that when a catering build projects for their clients. It means that you will have it will increase the adoption of partners into the platform and by increasing that adoption we will.
Just get more completed projects, which mean more websites and more and more subscription revenue coming out of it. We also know that these kind of websites much I have a much more higher higher likelihood to be commerce web sites I also drive G. P via in higher G. P V, which is another a great cause.
<unk> monetization and again these partners also a much more sophisticated in their general approach to most more complex business applications on the internet, which means that they adopt more of our business solution and therefore end up with a with a higher a R. B a R. B S. So all of that together.
As a driver for magnetization that we believe is going to not only continue the compounding effect of those chords, but hopefully even acceleration.
Yeah, an acceleration of that effect.
Great. Thanks for taking my question.
Thank you.
One moment for our next question.
Our next question comes from Ken Ken Wong from Opera and call. Please go ahead.
Great. Thanks for taking my question I wanted to take into the partner side of your business that doesn't it saw notable step up and transfer the acceleration can you help us walk through some of the moving pieces. There how much was maybe the beta be flowed through our or was there a lot of letting you a R. R that might've come through from.
The traditional partner channel as well.
Hi, this is.
So I think that in order to understand it I think that if you look at the net growth over the air out which was about 66% this quarter and two one was Ah more than 90% of the secret is to provide you with the right understanding the depth, we managed to generate any incremental revenue to our business.
Mostly coming from partners as you suggested it's a combination of both a b two b, obviously, but most of it is actually coming from <unk>.
Agencies.
The to move in two weeks and using weeks to build a website and we need to understand that these abuses has a compounding effect because once you get an agency.
This continued to build websites for their customers and on top of it you are getting the new one but this is why we see that the actual growth of baldness is accelerating.
This is why do we still believe and do some business and the fact that it can be even more profitable than the self creators because it's compounding effect.
In addition to that.
We know that palaces growth.
He was also due to the fact that it's a different mix of customers, it's small businesses using the more business applications.
Generating the Moto G. P V in transaction revenue, which obviously also Ah quon.
Contribute to the growth of do some business.
It's also worth mentioning that we expect to do some business to.
To deliver a also higher growth in the future due to the fact that we just launched studio. So it will be interesting to see the result of it.
Alright, Thank you for those thoughtful insight.
Thank you one moment for our next question.
Our next question comes from.
Bernie Mccarney from Needham and cold.
Please go ahead.
Hi, This is Stephanie cresta, calling in for Bernie.
Can you just talk on the on the revenue acceleration you know what you're seeing in the macro environment and how much impact that that.
So we see some.
A modest improvement in the overall, you know economy, but it's only motive obviously most of the acceleration that we see right now in the revenue is actually coming from the fact that we are getting and taking the more market share in our partners for business I think that it's worth mentioning to draw.
The year over year basically people are 36%.
So yes, we see some modest.
Improvement in the overall economy ask people more bang more online, but it's really really modest I think that most of the growth is the attribute it to the fact that baldness business, he's going very well for us.
That's a great color. Thank you.
Thank you.
Question.
Our next question comes from Emily Elizabeth Porter from M. S. Please go ahead.
Alright, thank you so much.
Crap I'm, a part or side of the desk I like it took you to ask on the south creators and more specifically about your tapper final trends.
Getting back to kind of normal cadence after digesting the impacts from <unk> and can you also speak to any changing conversion range from paid customers could you use your base and you've been saying that he's been attracting a martial quality customer. Thank you.
Hey, Elizabeth It's me or so from the standpoint of the self theaters.
We've asked whether we are getting to normal.
Pre COVID-19 cadence from the top of the final the answer is not yet is your mentioned before on these comments on the macro economy, we have seen some improve proven to top a final, but Ah we we still not where it was pre COVID-19 and our belief is that there is still room for for for more.
Covering their you know over time and as the as the general the economy gets better and better in terms of conversion rates. Yes, we have seen conversion rates going up first of all because of the significant significant changes will be done to our marketing strategy.
And we're bringing much I intend to use it now so obviously that is paying off but you've also seen improvement simply for for you know due to the cadence of our product released an innovation that is aimed at helping users ah become more successful.
The introduction the February released of of of check GPT within the editor or is a good example for something that drove that and obviously we have many many of those coming so that's also another a positive effect on conversion.
Great. Thank you so much.
Thank you one moment for our next question.
Our next question comes from Chris Zhang from Credit Suisse. Please go ahead.
Alright, thanks for taking our questions. So the question is around the marketing expense guides switched it took thousands of problem.
27%.
Now 25% to 26%.
Linda previously you mentioned the second half increase of the bread marketing experience, which would represent probably 400 basis points start stop are you still expect to that or any changes in the stratosphere. Thank you.
Hi, Chris This is a little yes, we we do expect to see increasingly marketing.
Due to the fact that we just launched studio.
So obviously, we are going to invest in order to accommodate died.
The amount of spending that we have in our plan yeah, we plan to increase the investment in marketing.
Ah, but going forward, obviously, it will be a reflection of how successful we are in in with this product.
That is Ah streaked variable cost.
Very linked and attached to the success that we're going to see in studio. So it's hard for me to tell you you know what will be the run rate, but obviously, yes, we are going to see some increase of our marketing investment in the second half of the year.
Thank you.
One moment for our next question.
Our next question comes from your golf around noon.
From Citigroup. Please go ahead.
Hey, good morning, guys with good afternoon. So first on studio can you, maybe just talk a little bit more about what you expect it to kind of hit general availability is there anything additional to share on the marketing efforts just talked about around it you know the agencies that are.
Currently partners.
Can you just switch them over.
<unk> on that kind of expectation that partner of growth accelerates or you know has more strength from here because it's because it's product yeah. What what is that <unk> south of the process and then just want to talk about giant Jenny I for a little bit you guys done a great job of late highlighting how its benefits thanks for doing.
Site generate a works.
Really interesting alright, you say any tangible evidence that uhm AI is helping.
You know drive more what website creation and <unk>.
We're building, helping your customers create better websites uhm. So far is it still too early for that thank you.
There you go and ask me or I'll I'll start with the first question about the studio. So the current the current launch pass that already we're already started this Tuesday.
Aimed to first open an invite our existing very large base of partners to adoptive adopted obviously to get feedback to introduce more improvements to iron out whenever it needs to be ironed out as as well as understand and and help them and help them.
Help educate them on this new platform, we'd go Oh first of all treat these people that had email us for many many years and already use our thoughts form in order to get into the to the needs and for up for some of their own customers that being said the next step will indeed.
<unk> to go to a general availability sometime in probably Q for we will determine what is the best path to do that as we became more more insights from the first phase of the launch received which is already happening I'm happy to say that already.
Yesterday, we started opening and adding Ah Ah partners into it in thousand many thousands and the initial feedback we are getting is very very encouraging we're getting very positive feedback on many many different fronts.
So we're very happy about that and we will continue to monitor that and make sure that you have a very smooth transition into it and then continue in the launch a plan towards the general public.
Oh no in regards to your question, if we see any tangible evidence the journey I, it's actually improving.
And business performance then, yes, we do we the amount and just goes all the details, but I'm just going to say that the finger Lisa and the first part of the year and late last year.
Where do you actually implementing business and keep your eyes. So.
So it makes it very optimistic and of course, the more we put those kind of technology and Furthermore, users. They expect that factor to grow but if you think about right. The core value of that three weeks brings us is reducing the friction when I tried to build the website.
When he was just a technology that can do tremendously well in order to improve diet coke value.
And then of course, we expect the results to be significant.
Okay. Thanks anything you can share on one side generator will be ready or can't do that.
Well like every a research project it always looks more.
Easier than than.
They're they're nah actually Asian reality, I can't say, we already managed to generate real websites with it. So it seems to be a part of the critical and hodgepodge knowledge about publishing it and making sure that it that.
Okay. Thank you so much.
Thank you.
One moment for our next question.
Our next question comes from Clark Jefferies from Piper Sandler. Please go ahead.
Hello, Thank you for taking the question.
I wanted to ask about profitability, certainly a brisk pace in terms of getting <unk> and she 18 per cent operating margins.
You know even going back to the last analyst day, you know I think it was contextualize that much of the profitability improvements you made it comes with a partner business.
Is that still tracking to be a case and has the recent revenue outperformance in that segment.
At <unk> at all to a faster paced cash flow breakeven.
Sort of a follow on to that I think it was interesting to see sequential dollar decrease in creative subscription Cogs.
<unk>, how much optimism do you have that the actual dollar value and colleagues could go down in the future. You know recognizing we have you know guidance here for for a gross margin on <unk> on the creative subscription side.
So so first of all let me start with saying that I will show you know analyst date.
A very detailed plan.
You know both for in terms of the profitability, both fulfill schedules and partners.
And will show exactly how we are getting this leverage I want to start and say that.
<unk>, but also self piedras.
So we managed to optimize the grill small gene bye.
By keeping the costs fixed while revenues, increasing so there they get more and more leverage we are doing it by you know developing all kinds of tools in order to help us to.
Yes, I think that I believe that we are going to see more leverage also next year.
No obviously, it's not going to be huge but there will be some more leverage to our gross margin. Just from you know from the fact that Ah revenue will be growing more than the cost or more than developable cost.
Part of the cost.
I will show in the analyst day during the analyst date that.
We've already reached too.
To Ah to Ah in the second half of the year to our run rate in terms of our cost structure.
That will lead us to the rule of 40.
And this is something that is really important to mentioned, we don't need to do anything else, we simply going to see every quarter every year, some more leverage coming from the fact that revenue is growing.
But only available parts of course is growing which deliver.
Huge liver rich.
Our model.
And your <unk>.
Thank you.
One moment for our next question.
Next question will come from Andrew Boom.
J M. P Securities. Please go ahead.
Good morning, and thanks for taking my question I wanted to go back to gender to the AI cause you guys, putting us to market can you talk about how do you feel like your product will be differentiated versus the competition. Thanks, I'll pay I try to help others.
Mentioning the AI.
And I. So Halloween is what we do in terms of generating websites right.
Ah is different than others.
So the one that we've seen until now are essentially.
During the following right.
The ticket template and that Jane generate a text with a template.
And that then they saved that it's a web site.
Essentially.
They're using judge a pretty dry text and then just put it inside of a template.
We started we did that and now I'm doing which adds up if you were doing it since last day I think November .
And we the 80 I would eat it of course I believe in a less sophisticated but even then we didn't just inject text template, we actually created layouts and the text, which is the other way around and in that case, a huge difference and why to generate because.
When you feel texts into a template you are creating essentially artificial texts that will fit the design, while I must catch me. If you think about building a business you did the other way around you create your marketing messages and then instead of designed to.
To fit that in and visually debate's massive defense efficiency of those website in Vegas.
So that is the first difference they added difference is that.
If you think about it.
Since 1998, you could write text in their word document and then Saturday. This HTML. Okay. So now you just build the web site and your <unk> and you have a very very basic website of course, you cannot run your business on top of that because it doesn't have everything you need to run a business without the name and the Lady she doesn't it in context.
Contact form it doesn't have an equal ratio transactions and all of those are the platform that makes it.
Into a real business.
And the last part is the question of how do you edit and this is an event, but I think at web site is not something that you could act once and he just publish it they didn't never go back to you constantly have things to do you change products.
Saturdays you change addresses you essentially remove things you need to add content she'll go go with like you and this is very very important for your for finding your business in Google and there's a lot of other things I actually need to be able to edit.
The content now when it comes to edit content you don't want to regenerate the website, Okay, which is the current flow you've seen all of the things that feel a template because it's normally about feeling a template now about editing the content and this is the thing that we.
We spent so much money I'm doing right back into technology to e-commerce and then the ability to go in and pointed shopping and edit or move it and drag. It. So those are the things that created wix <unk>.
And and and and those are I think still a differentiate it even if you generated a template with judge a picky and it looks great and for some magic original actually fit your a valued at the Martin Advisors Wanna put in your website editing it is not going to be possible related to current technology to us and then even more than that the ability to drive.
All of the applications on top of it that you wouldn't need to our business don't exist.
Thanks, and the letter talks about a growing number of partners.
Can you talk about the tobacco understood studios comments or was that more product did you guys do anything to come on the market.
Thanks, so much.
Right.
So in terms of the growing number of partners.
Yes, it's both product driven.
More than than marketing, we need to remember that we haven't really started with marketing campaign football cause I think that we build a business that is close to a half a billion dollars in a few years.
Without significant investment in marketing, obviously, you know now and we have the complete solution studio studio, we're going to invest more in marketing. So you know a different way to look at it. It's just that you know.
Open for us a much more opportunities in terms of the growth.
Thank you.
Thank you.
One moment for our next question.
Our next question comes from Brad <unk> from RBC capital markets. Please go ahead.
[noise] yeah. Thanks, Yeah. It's just a couple of follow ups I guess first that you speak to the acceleration in the second half growth I'm kind of looking into next year, maybe you just talk to the growth algorithm for bookings between.
As in price, particularly in the lap those price increases.
And then second just some housekeeping can you just where can you just speak to any effects changes that are assumptions that are contemplated in the guidance first last quarter. Thanks.
[noise], yeah, so little to everything with regard to the F. X was was not meaningful I mean, there is you know a car.
Kind of a few hundred thousand or a million dollar affects of ethics.
So it's not really a will you know spending time or overeating.
When we look at the second half of the year and some of the acceleration obviously the comfort different remembered that Q under the D C or the growth was about 10% over a very us to one quarter of last year.
So we are benefiting from a different phone.
But on top of it we are very encouraged to see the growth.
And the growth of our business solution. So it is usually know what we do and we provide the guidance. We see you know the cadence we feed the fundamentals that we have in front of US now and based on that we provide the guidance.
So it simply just sticking you know what we see right now without taking into effect any any appetite for example from the launch a studio.
So this is a which results with the acceleration.
[noise] got it thanks.
Thank you.
I'm showing no further questions at this time.
Now turn the conference back to the company for closing remarks.
Thanks, everyone.
Mm thank everyone for joining us today have a great day.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
Mmm.
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