Q2 2024 Wix.com Ltd Earnings Call

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Operator: Good day, and thank you for standing by. Welcome to the Wix Second Quarter, 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press Star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Operator: Good day, and thank you for standing by. Welcome to the Wix Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Emily Liu of Investor Relations. Please go ahead.

Speaker Change: Good day and thank you for standing by. Welcome to the Wix Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised.

Operator: Please be advised that today's conference is being recorded.

Speaker Change: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Emily Liu of Investor Relations. Please go ahead.

Operator: I would like to hand the conference over to your speaker today, Emily Liu of Investor Relations. Please go ahead.

Emily Liu: Thanks, Amy, and good morning, everyone.

Emily Liu: Thanks, Amy. And good morning, everyone.

Emily Liu: Welcome to Wix's second quarter 2024 earnings call. Joining me today to discuss a result for Avishai Abrahami, CEO and co-founder; Nir Zohar, our president and COO; and New York Shemesh, our CSO.

Emily Liu: Welcome to Wix's second quarter 2024 earnings call. Joining me today to discuss our results are Avishai Abrahami, CEO and co-founder, Nir Zohar, our president and COO, and Nir Shemesh, our CFO. During this call, we may make forward-looking statements, and these statements are based on current expectations and assumptions. Please consider the risk factors included in our press release and most recent Form 20-F that could cause our actual results to differ materially from these forward-looking statements.

Emily Liu: Joining me today to discuss our results are Avishai Abrahami, CEO and co-founder, Nir Zohar, our President and COO, and Nir Shemesh, our CFO .

Emily Liu: During this call, we may make forward-looking statements, and these statements are based on current expectations and assumptions. Please consider the risk factors included in our press release in most recent form 20-F that could cause our actual results to differ materially from these forward-looking statements. We do not undertake any obligations to update these forward-looking statements.

Speaker Change: During this call, we may make forward-looking statements, and these statements are based on current expectations and assumptions.

Emily Liu: We do not undertake any obligation to update these forward-looking statements. In addition, we will comment on non-GAAP financial results and key operating metrics. You can find all reconciliations between our GAAP and non-GAAP results in the earnings materials and in our interactive analyst center in the investor relations section of our website, investors.wix.com. With that, I'll turn the call over to Avishai.

Emily Liu: In addition, we will comment on non-GAAP financial results and key operating metrics. You can find all reconciliation between our gap and non-gap results in the earnings materials and interactive analyst center on the Investor Relations section of our website, investors.wix.com.

Speaker Change: In addition, we will comment on non-GAAP financial results and key operating metrics.

Avishai Abrahami: With that, I'll turn the call over to Avishai. Emily, and good morning, everyone. I'm very pleased to share that we finished the first half of 2024 with excellent Q2 results. And by successfully executing our strategy and delivering innovative solutions to our users, we were able to drive impressive year-over-year bookings growth of 15%. This is a significant acceleration from the 10% bookings growth we saw in Q1 and underscores our leading position as the go-to platform for any user or business to create, grow, and succeed online.

Avishai Abrahami: I'm very pleased to share that we finished the first half of 2024 with excellent Q2 results. And by successfully executing our strategy and delivering innovative solutions to our users, we were able to drive impressive year-over-year bookings growth of 15%. This is a significant acceleration from the 10% bookings growth we saw in Q1 and underscores our leading position as the go-to platform for any user or business to create, grow, and succeed online. We also generated 12% revenue growth, which again exceeded the top end of our guidance.

Speaker Change: And by successfully executing our strategy and delivering innovative solutions to our users, we were able to drive impressive year-over-year bookings.

Avishai Abrahami: The strong top-line results reflect the encouraging reception and performance of our key product initiatives that are continuing to propel our momentum. I'll share some updates on Wix Studio and our AI strategy before letting Nir dive into the incredible progress we've made in expanding our commerce platform. First, we continue to see outstanding results from Studio as we steadily add new features and enhancements. This quarter, we rolled out new dynamic no-code design expressions, business enablement capabilities, and tools to help partners work better with their clients and grow their business.

Speaker Change: The strong top-line results reflect the encouraging reception and performance of our key product initiatives that are continuing to propel our momentum.

Speaker Change: I'll share some updates on Wix Studio and our AI strategy before letting Nir dive into the incredible progress we've made in expanding our commerce platform. First, we continue to see outstanding results from Studio as we steadily add new features and enhancements. Wix.com

Avishai Abrahami: First, we continue to see outstanding results from Studio as we steadily add new features and enhancements. This quarter, we rolled out new dynamic, no-code design expressions, business enablement capabilities, and tools to help partners work better with their clients and grow their business. Most notably, we announced a highly anticipated Figma plugin, a top partner request. Partners can now leverage studios, no-code animations, built-in business and AI solutions, CMS, and workflow management tools to transform their Figma designs into powerful and dynamic... The number of studio accounts and rate of new partners joining the Wix platform through Studio continues to outperform expectations.

Speaker Change: This quarter, we rolled out new dynamic no-code design expressions.

Speaker Change: business enablement capabilities and tools to help partners work better with their clients and grow their business.

Avishai Abrahami: Most notably, we announced a highly anticipated Figma plugin, a top partner request. Partners can now leverage Studio's no-code animations, built-in business and AI solutions, CMS, and workflow management tools to transform their Figma designs into powerful and dynamic websites seamlessly. Feedback has been very positive following this launch. The number of studio accounts and rate of new partners joining the Wix platform through studios continues to outperform expectations. We also saw an acceleration in the pace of studio subscription purchases. This, along with strong retention of existing subscriptions and the ramping of partners purchasing their second, third, and fourth studio packages, drove Guarder OverQuarter Studio Booking's growth of 20%.

Speaker Change: Partners can now leverage Studio's no-code animations, built-in business and AI solutions, CMS and workflow management tools to transform their Figma designs into powerful and dynamic websites seamlessly.

Avishai Abrahami: We also saw an acceleration in the pace of studio subscription purchases. This, along with strong retention of existing subscriptions and the ramping of partners purchasing their second, third, and fourth studio packages, drove water over quarter, studio bookings, growth of 20 percent.

Avishai Abrahami: Our platform has been increasingly resonating with the professional community as we continue to deliver best in class innovations and grow our partner ecosystem. Second, we continue to build up our suite of AI capabilities as a result of the numerous AI initiatives and work streams across weeks. Last quarter, we introduced our plan to embed AI assistance across our platform and products. I'm excited to share that we have released 17 AI business assistance so far and to date. These assistance span a wide range of use cases to support users with minimal hands-on support that's streamlining their experience.

Avishai Abrahami: Our platform is increasingly responding to the professional community as we continue to deliver best-in-class innovations and grow our partner ecosystem. Second, we continue to build up our suite of AI capabilities as a result of the numerous AI initiatives and workstreams across Wix. Last quarter, we introduced our plan to embed AI assistance across our platform and products. I'm excited to share that we have released 17 AI business assistants so far.

Speaker Change: of 20%. Our platform is increasingly resonating with the professional community as we continue to deliver best-in-class innovations and grow our partner ecosystem.

Speaker Change: I'm excited to share that we have released 17 AI business assistants so far to date. These assistants span a wide range of use cases to support users with minimal hands-on support, thus streamlining their experience.

Avishai Abrahami: These assistants span a wide range of use cases to support users with minimal hands-on support, thus streamlining their experience. These conversational AI assistants act as a right-hand aid for users to guide them through the entire lifecycle of ideating, creating, and managing their online presence. Our offering includes an analytics assistant that can help Wix users find the data they need without having to search through dozens of reports, and an assistant that helps users create events through a conversational chat.

Avishai Abrahami: These conversational AI assistance act as a right hand aid for users to guide them through the entire life cycle of like the aiding creating and managing their online presence. Our offering includes an analytics system that can help Wix users find the data they need without having to search through dozens of reports and an assistant that helps users create events through a conversational chat. We have already received positive feedback on this first set of AI assistance, with dozens more set to launch later this year.

Avishai Abrahami: We have already received positive feedback on this first set of AI assistants, with dozens more set to launch later this year. Additionally, on the AI front, we launched AI creation capabilities for our mobile app builder in June. This new solution enables users to create and edit iOS or Android apps through an AI chat experience. Once AI understands the user's goals, intent, and desired aesthetic, our technology generates a branded app that can be customized and managed from the app editor.

Speaker Change: We have already received positive feedback on this first set of AI assistants, with dozens more set to launch later this year.

Avishai Abrahami: Additionally, on the AI front, we launched AI creation capabilities for our mobile app builder in June. This new solution enables users to create an edit iOS or Android apps through an AI chat experience. Once AI understands the user's goals, intent, and desired aesthetic, our technology generates a branded app that can be customized and managed from the app editor. We also recently released a suite of new AI features designed to help users identify relevant topics for blogs as well as generate outlines, content, and images for their target audience. With this new experience, users can swiftly turn ideas into new radio articles, significantly reducing the time and effort required to create engaging content and ultimately changing the blog creation experience.

Speaker Change: Additionally, on the AI front, we launched...

Speaker Change: AI Creation Capabilities for our Mobile App Builder in June . This new solution enables users to create and edit iOS or Android apps through an AI chat experience.

Speaker Change: Once AI understands the user's goals, intent, and desired aesthetic, our technology generates a branded app that can be customized and managed from the app editor.

Avishai Abrahami: We also recently released a suite of new AI features designed to help users identify relevant topics for blogs, as well as generate outlines, content, and images for their target audience. With this new experience, users can swiftly turn ideas into near-ready articles. Significantly reducing the time and effort required to create engaging content and ultimately changing the blog creation experience. Both self-creators and partners continue to show excellent engagement with our AI tools. As we expand the breadth of our AI technology, we expect it to continue to be a competitive advantage for us as well as a significant driver of growth going forward.

Speaker Change: With this new experience, users can swiftly turn ideas into near-ready articles.

Speaker Change: significantly reducing the time and effort required to create engaging content and ultimately changing the blog creation experience. Both self-creators and partners continue to show excellent engagement with our AI tools.

Avishai Abrahami: Both self-creators and partners continue to show excellent engagement with our AI tools. As we expand the breadth of our AI technology, we expect it to continue to be a competitive advantage for us, as well as a significant driver of growth going forward.

Avishai Abrahami: We have built up a lot of momentum in the first half of 2024, with many exciting and impactful innovations powering meaningful growth acceleration. We expect to continue this momentum into the back half of the year, with many exciting things still to come. Thank you to the entire Wix team for your hard work to make Wix the web creation platform of choice. And thank you to our users for trusting us to help them achieve their goals. With that, I'll turn it over to Nir.

Avishai Abrahami: We have built up a lot of momentum in the first half of 2024 with many exciting and impactful innovations, powering meaningful growth acceleration. We expect to continue this momentum into the back half of the year with many exciting things still to come.

Avishai Abrahami: Thank you to the entire Wix team for your hard work to make Wix the web creation platform of choice. And thank you to our users for trusting us to help you achieve your goals.

Nir: Thank you to the entire Wix team for your hard work to make Wix the web creation platform of choice. And thank you to our users for trusting us to help you achieve your goals. With that, I'll turn it over to Nir.

Nir Zohar: With that, I'll turn it over to me here. Thank you, Avishai, and thank you everyone for joining us today. I'd like to start with the quick updates on our user courts before diving into the third leg of our growth strategy, our commerce platform. Sure. Q2 was another great quarter marked by strong business fundamentals and robust user behavior. Our Q124 user court remains our strongest non-COVID court, generating more cumulative bookings in its first two quarters than our Q123 court while having 9% fewer users. This is a result of our continued marketing strategy targeting high intent users.

Nir Zohar: Thank you, Avishai. And thank you everyone for joining us today. I'd like to start with a quick update on our user cohorts before diving into the third leg of our growth strategy, our commerce platform. Q2 was another great quarter marked by strong business fundamentals and robust user behavior. Our Q124 user cohort remains our strongest non-COVID cohort, generating more cumulative bookings in its first two quarters than our Q1'23 cohort while having 9% fewer users.

Nir: Thank you Avishai and thank you everyone for joining us today. I'd like to start with the quick update on our user cohorts before diving into the third leg of our growth strategy, our commerce platform.

Nir: First.

Nir: Our Q1'24 user cohort remains our strongest non-COVID cohort, generating more cumulative bookings in its first two quarters than our Q1'23 cohort, while having 9% fewer users.

Nir Zohar: This is a result of our continued marketing strategy targeting high-intent users. We have continued to expand our user base with partners and self-creators, adding 4.7 million new high-intent users in the second quarter. These new users continue to demonstrate strong conversion and increased ARPS and TROI compared to past.

Nir: This is a result of our continued marketing strategy targeting high-intent users.

Nir Zohar: We have continued to expand our user base with partners and self-creators, adding 4.7 million new high intent users in the second quarter. These new users continue to demonstrate strong conversion and increase ARPS and TRY compared to past courts. We continue to benefit from the success of strategic initiatives completed over the past year. Our AI tools continue to drive user conversion. Weeks studio uptake and contribution continues to ramp, and consumption of the price increase implemented earlier this year by new and existing users remains strong. All of these factors are driving bookings growth, which we believe is reflecting our ad-match value proposition and durable business model.

Nir: These new users continue to demonstrate strong conversion and increased ARPS and TROI compared to past cohorts.

Nir Zohar: We continue to benefit from the success of strategic initiatives completed over the past. Our AI tools continue to drive user conversion, Wix Studio uptake and contribution continues to ramp, and consumption of the price increase implemented earlier this year by new and existing users remains strong. All of these factors are driving bookings growth, which we believe is reflecting our unmatched value proposition and durable business model. Our commerce business was a particular highlight this quarter, with transaction revenue growing an impressive 21% year-over-year and take rate increasing to a record 1.68%. TechGrid expanded 10 basis points sequentially, the largest quarter-over-quarter improvement in recent years.

Nir: All of these factors are driving bookings growth.

Nir: which we believe is reflecting our unmatched value proposition and durable business model.

Nir Zohar: Our commerce business was a particular highlight this quarter with transaction revenue growing an impressive 21% year over year and take rate increasing to a record 1.68%. Take rate expanded 10 basis points sequentially, the largest quarter-over-quarter improvement in recent years. Over the past few years, we have built weeks into a full end-to-end commerce platform, enabling business owners of every size, across every industry and in any geography, to build, manage, and grow on weeks. By introducing new features and capabilities, we have steadily expanded our platform, with more merchants globally choosing and trusting weeks for their business and livelihood.

Nir: TechGrid expanded 10 basis points sequentially, the largest quarter-over-quarter improvement in recent years.

Nir Zohar: Over the past few years, we've built Wix into a full end-to-end commerce platform, enabling business owners of every size across every industry and in any geography to build, manage, and grow on Wix. By introducing new features and capabilities, we have steadily expanded our platform, with more merchants globally choosing and trusting Wix for their business and livelihood. Our platform has expanded in two ways. GrowingGPV.com, paired with increased monetization of RGV.

Nir: By introducing new features and capabilities, we have steadily expanded our platform with more merchants globally, choosing and trusting Wix for their business and livelihood.

Nir Zohar: Our platform has expanded in two ways. Growing GPV paired with increased monetization of our GPV. First, we are maximizing the GPV flowing through our platform in a few ways.

Nir: Our platform has expanded in two ways.

Nir Zohar: First, we are maximizing the GPV flowing through our platform in a few ways. One, we're continually expanding into new verticals in order to facilitate any business needs and diversify our platform, which helps to insulate us from macro volatility. This quarter, we introduced Wix Donations, which provides a tailored solution for NGOs, and Wix Proposals, which helps professionals across various industries create, manage, and finalize proposals easily.

Nir Zohar: One we are continually expanding into new verticals in order to facilitate any business needs and diversifying our platform, which helps to insulate us from macro volatility. This quarter we introduced weeks to nations, which provides a tailored solution for NGOs and weeks proposals, which helps professionals across various industries create, manage, and finalize proposals easily. By expanding our supported verticals, we are appealing to a wider pool of merchants and attracting additional GPV as a result. Two, we are increasingly onboarding larger merchants with higher average transaction size onto our platform. We expect this to continue as increasingly we will share of the professional market.

Nir: 1. We are continually expanding into new verticals in order to facilitate any business needs and diversifying our platform, which helps to insulate us from macro volatility.

Nir: This quarter, we introduced Wix Donations, which provides a tailored solution for NGOs, and Wix Proposals, which helps professionals across various industries create, manage, and finalize proposals easily.

Nir Zohar: By expanding our supported verticals, we are appealing to a wider pool of merchants and attracting additional GPV. Two, we are increasingly onboarding larger merchants with higher average transaction sizes onto our platform. We expect this to continue as we increasingly win share of the professional market.

Nir: Two, we are increasingly onboarding larger merchants with higher average transaction size onto our platform. We expect this to continue as we increasingly win share of the professional market.

Nir Zohar: 3. We are enabling existing merchants to grow their businesses through a growing suite of commerce tools, from online advertising and email marketing to AI-based product management. The success of our existing users drives compounding growth and is key to the success of our commerce strategies. In addition to growing GPV, we are also increasing monetization of our GPV by one, adding a new payment partner to our Wix Payment platform, which is what we did this quarter. By expanding our base of partners, we are increasing our ownership and thus monetization of the GPV that flows through Wix. Two, driving higher Wix Payments adoption as new and existing merchants increasingly choose Wix Payments over other providers.

Nir Zohar: We are enabling existing merchants to grow their businesses through a growing suite of commerce tools, from online advertising and email marketing to AI-based product management. The success of our existing users drives compounding growth and is key to the success of our commerce strategy. In addition to growing GPV, we are also increasing monetization of our GPV by one, adding new payment partners to our Wix payment platform, which is what we did this quarter.

Nir Zohar: By expanding our base of partners, we are increasing our ownership and thus monetization of the GPV that flows through Wix. Two, driving higher Wix payments adoption as new and existing merchants increasingly choose Wix payments over other providers. The Wix Payments experience is seamless for merchants with an integrated payments dashboard and built-in disputes. Meanwhile, their customers have an easy and smooth native checkout experience. New merchant adoption of Wix Payments has steadily ticked up over the last few years, and we expect this to continue.

Nir: In addition to growing GPV,

Nir: We are also increasing monetization of our GPV by...

Nir: 2. Driving higher Wix Payments adoption as new and existing merchants increasingly choose Wix Payments over other providers.

Nir Zohar: The Wix Payments experience is seamless for merchants with an integrated payments dashboard and building disputes tool. Meanwhile, merchants, customers have an easy and smooth native checkout experience. New merchant adoption of Wix Payments has steadily ticked up over the last few years, and we expect this to continue. Three, providing additional platform solutions such as POS, credit card on file, and mail and email ordering capabilities. These solutions are moving more of our offline GPV online, thus allowing us to capture and monetize better. Four, enhancing payment offerings to capture more wallet share, particularly in international markets. Earlier this year, we introduced new payment providers in India and entered into partnership with Global E to power cross-border selling on Wix.

Nir: Meanwhile, merchants' customers have an easy and smooth native checkout experience.

Nir: New merchant adoption of Wix Payments has steadily ticked up over the last few years and we expect this to continue.

Nir Zohar: Providing additional platform solutions such as POS, credit card on file, and mail and email ordering capability. These solutions are moving more of our offline GPV to the online world, thus allowing us to capture and monetize better. 4.

Nir: These solutions are moving more of our offline GPV online, thus allowing us to capture and monetize better.

Nir Zohar: Enhancing payment offerings to capture more wallet share, particularly in international markets. Earlier this year, we introduced new payment providers in India and entered into partnership with Global E to power cross-border selling on Wix. We started making commerce a focus back in 2020, and our platform has grown tremendously since as a result of our initiative. GPV in the most recent quarter was more than two times that of Q2 20 GPV. Our monetization has improved even more significantly with Q220 transaction revenue, more than five times that of Q2 20 transaction revenue.

Nir Zohar: We started making commerce a focus back in 2020, and our platform has grown tremendously since as a result of our initiatives. GPV in the most recent quarter was more than two times that of Q2 20 GPV. Our monetization has improved even more significantly, with Q220 in port transaction revenue more than five times that of Q220 transaction revenue. As a result, our quarterly take rate has more than doubled over this period. Today, our full stack commerce solution provides Wix merchants with all of the tools they need to succeed online and drive strong user attention and high ARPS.

Nir Zohar: As a result, our quarterly take rate has more than doubled over this period. Today, our full-stack commerce solution provides Wix merchants with all of the tools they need to succeed online and drive strong user retention and high ARPA. We believe that our commerce platform will remain a key growth driver for both self-creators and partners in years to come. With that, I will now hand it over to Lior to walk through our financials and outlook. Lior?

Nir: As a result, our quarterly take rate has more than doubled over this period.

Nir Zohar: We believe that our commerce platform will remain a key growth driver for both self-caters and partners in years to come.

Nir: We believe that our commerce platform will remain a key growth driver for both self-creators and partners in years to come.

Lior: With that, I will now head over to Lior to walk through our financials and outlooks. Lior, thanks, Nier. Strong execution of the key growth initiatives we've just heard about, as well as solid business fundamentals, resulted in incredible growth momentum and additional margin expansion in the second quarter. As we continue to focus on accelerating top-line growth and improving profitability margins in the back half of the year, we now expect to achieve the rule of 14 2024 at the high end of our guidance ranges. I will share more about this exciting milestone, as well as our updated outlook shows.

Lior: Thanks, Nir. Strong execution of the key growth initiatives you just heard about, as well as solid business fundamentals, resulted in incredible growth momentum and additional margin expansion in the second quarter. As we continue to focus on accelerating top-line growth and improving profitability margins in the back half of the year, we now expect to achieve the Rule of 40 in 2024 at the high end of our guidance ranges. I will share more about this exciting milestone as well as our updated outlook shortly. First, let's dive into the details of the second quarter.

Nir: Thanks, Nir.

Speaker Change: Strong execution of the key growth initiatives you just heard about, as well as solid business fundamentals, resulted in incredible growth momentum and additional margin expansion in the second quarter.

Speaker Change: As we continue to focus on accelerating top-line growth and improving profitability margins in the back half of the year, we now expect to achieve the Rule of 40 in 2024 at the high end of our guidance ranges.

Lior: First, let's dive into the details of the second quarter. We experienced stand-out bookings performance with total bookings of $458 million or 15% growth year over year. This was significant acceleration from the 10% growth in Q1 as a result of strong user absorption of the price increase implemented earlier this year, as well as contribution from the strategic initiatives you just heard about. Contribution from studio and our growing suite of AI capabilities continued to ramp and are expected to be the main drivers of growth in the coming years. Notably, growth accelerated across both self-creators and partners, demonstrating the underlying strengths of our entire Wix platform.

Lior: We experienced standout bookings performance with total bookings of $458 million, or 15% growth year over year. This was a significant acceleration from the 10% growth in Q1 as a result of strong user absorption of the price increase implemented earlier this year, as well as contribution from the strategic initiatives you just heard about. Contribution from studio and our growing suite of AI capabilities continue to surge and are expected to be the main drivers of growth in the coming years.

Speaker Change: First, let's dive into the details of the second quarter.

Speaker Change: We experience standout bookings performance with total bookings of $458 million.

Speaker Change: Contributions from the studio and our growing suite of AI capabilities continue to ramp and are expected to be the main drivers of growth in the coming years. Notably, growth accelerated across both self-creators and partners.

Lior: Notably, growth accelerated across both self-creators and partners, demonstrating the underlying strengths of our entire Wix platform. Q2 revenue was also very strong and finished above the high end of our guidance. Total revenue grew to $436 million, up 12% year-over-year, with growth driven by the same factors that benefited bookkeepers. This quarter, our commerce business performed extremely well, with transaction revenue growing 21% to $54 million as a result of healthy GPV growth, along with improving monetization.

Speaker Change: demonstrating the underlying strengths of our entire Wix platform.

Lior: Q2 revenue was also very strong and finished above the high end of our guidance. Total revenue grew to $436 million, up 12% year over year, with growth driven by the same factors that benefited bookings. This quarter, our commerce business performed extremely well, with transaction revenue growing 21% to $54 million as a result of healthy GPV growth, along with improving monetization. GPV growth was a product of larger merchants joining Wix and compounding GPV from existing businesses. Our bookings and events products were the best performing vertical discourse with GPV growth of approximately 20 and 25% respectively. This GPV growth was spared with increased monetization driven by the addition of the new payment partners to the Wix payment platform.

Speaker Change: Q2 revenue was also very strong and finished above the high end of our guidance. Total revenue grew to $436 million, up 12% year-over-year, with growth driven by the same factors that benefited bookings.

Speaker Change: This quarter, our commerce business performed extremely well, with transaction revenue growing 21% to $54 million as a result of healthy GPV growth, along with improving monetization.

Lior: GPV growth was the product of larger merchants joining Wix and compounding GPV from existing businesses. Our bookings and events products were the best performing verticals this quarter, with GPV growth of approximately 20% and 25%, respectively. This GPV growth was accompanied by increased monetization driven by the addition of new payment partners to Wix's payment platform. As a result, TechRate in the second quarter reached a record high of 1.68%. This is an increase of 10 basis points sequentially.

Speaker Change: GPV growth was the product of larger merchants joining Wix and compounding GPV from existing businesses.

Lior: As a result, decorate in the second quarter reached a record high of 1.68%. This is an increase of 10 basis points sequentially. We expect GPV and decorate to continue to steadily improve over the long term as we grow our commerce platform. Our commerce business was another major driver of overall top-line growth this quarter. Partners' revenue grew to $9.00 per year as we onboarded new agencies, empowered existing partners to build more projects on Wix, and improved monetization of our professional user base. Notably, studio contribution continued to ramp as usage and adoption increased. The accelerating phase of studio package purchases, strong retention of partners and significant increase in the number of partners building the second, third, and fourth website on platform.

Lior: We expect GPV and TechRate to continue to steadily improve over the long term as we grow our commerce platform. Our partners business was another major driver of overall top-line growth this quarter. Partners revenue grew 29% year over year as we onboarded new agencies, empowered existing partners to build more projects on Wix, and improved monetization of our professional user base. Notably, studio contribution continued to ramp as usage and adoption increased.

Speaker Change: and improve monetization of our professional user base. Notably, studio contributions continue to ramp as usage and adoption increase.

Lior: The Accelerating Phase of Studio Package Purchases, strong retention of partners, and a significant increase in the number of partners building their second, third, and fourth websites on platform give us confidence that Studio will be a meaningful driver of partners' growth in the coming years. Moving on to the core side of the business, total land gap gross margin in Q2 was 68%, which was in line with our expectation of 68% to 69% gross margin for the full year.

Speaker Change: The Accelerating Phase of Studio Package Purchases

Lior: Give us confidence that studio will be a meaningful driver of partners' growth in the coming years.

Speaker Change: Give us confidence that Studio will be a meaningful driver of Partners' growth in the coming years.

Lior: Moving on to the core side of things. Total non-gal growth margin in Q2 was 68%, which was in line with our expectation of 68-69% growth margin for the full year. Interestingly, this quarter, we saw a significant improvement in operating a margin. Both gap and non-gap operating a margin increased more than 400 basis points sequentially as a result of lower operating expenses. Q2 operating expenses decreased quarter of a quarter as a result of parallel efficiencies, lower overhead cost from lower property taxes on our headquarters. An additional sub-leasing of our office food drink, as well as seasonally lower advertising expenses.

Speaker Change: Total land gap gross margin in Q2 was 68%, which was in line with our expectation of 68% to 69% gross margin for the full year.

Lior: Impressively, this quarter, we saw a significant improvement in operating margin. Both gap and non-gap operating margin increased more than 400 basis points sequentially as a result of lower operating expenses. Q2 operating expenses decreased quarter-over-quarter as a result of payroll inefficiencies, lower overhead costs, lower property taxes on our headquarters, and additional subleasing of our office food and drinks, as well as seasonally lower advertising expenses.

Speaker Change: Impressively, this quarter, we saw a significant improvement in operating margin. Both gap and non-gap operating margin increased more than 400 basis points sequentially as a result of lower operating expenses.

Speaker Change: Q2 operating expenses decreased quarter-over-quarter as a result of payroll efficiencies, lower overhead costs.

Speaker Change: from lower property taxes on our headquarters, and additional subleasing of our office food print, as well as seasonally lower advertising expenses.

Lior: We expect to sustain this lower base of parallel and overhead cost through the rest of the year, while studio-related sales and marketing cost increased through the second half as planned. As a result, non-GAAP operating a margin total 21% of revenue, while GAAP operating a margin was 7% of revenue. Q2 free cash flow excluding headquarter buildout cost total are almost 118 million or 27% of revenue due to continued strong top line growth and more efficient operating cost space.

Lior: We expect to sustain this lower base of payroll and overall costs through the rest of the year, while studio-related sales and marketing costs increase through the second half as planned. As a result, non-GAAP operating margin totaled 21% of revenue, while GAAP operating margin was 7% of revenue. Q2 free cash flow, excluding headquarter build-out costs, totaled almost $118 million, or 27% of revenue, due to continued strong top-line growth and a more efficient operating cost base.

Speaker Change: We expect to sustain this lower base of payroll and overall costs through the rest of the year, while studio-related sales and marketing costs increase through the second half as planned.

Speaker Change: As a result, non-GAAP operating margin totaled 21% of revenue, while GAAP operating margin was 7% of revenue.

Speaker Change: Q2 free cash flow, excluding headquarter build-out costs, totaled almost 118 million, or 27% of revenue, due to continued strong top-line growth and more efficient operating cost base.

Lior: This quarter marked the completion of our headquarter construction with no additional buildout-related topics and dissipated going forward.

Lior: And this quarter marks the completion of our headquarter construction with no additional build-out-related topics anticipated going forward. This now leads me to our expectations for the back half of 2024. We expect total revenue in Q3 of $440 to $445 million, representing approximately 12% to 13% year-over-year growth. For the full year 2024, we are increasing our outlook, as we expect to sustain the momentum built up in the first half of the year.

Lior: This now leads me to our expectations for the back half of 2024. We expect total revenue in Q3 of $440 to $445 million, representing approximately 12 to 13% of your growth. For the full year 2024, we are updating our outlook as we expect to sustain the momentum buildup in the first half of the year. We now expect total booking of $1,802 to $1,822 million of 13 to 14% year-over-year growth. We began to see effects of volatility materializing late Q2, which has continued into early Q3. Due to this and a bit more macro unpredictability broadly, mostly related to payments, we are building more conservatism into our outlook.

Speaker Change: For the full year 2024, we are updating our outlook as we expect to sustain the momentum build up in the first half of the year. We now expect total booking of $1,802 to $1,822 million or 13 to 14% year-over-year growth.

Lior: We now expect total booking of $1,802 to $1,822 million, or 13 to 14% year-over-year growth. We began to see FX volatility materialize in late Q2, which has continued into early Q3. Due to this, and a bit more macro unpredictability, broadly, mostly related to payments, we are building more conservatism into our outlook.

Speaker Change: We began to see FX volatility materialize in late Q2, which has continued into early Q3 due to this, and a bit more macro unpredictability, broadly, mostly related to payments, we are building more conservatism into our outlook.

Lior: I want to highlight that this updated guidance still reflects an acceleration in total booking 0 to 16% at the high end of our expectations. This has not changed from what we shared in May as we continue to see broad-based trends across our platform. We continue to expect to see self-create all the end-power, with growth continuing to accelerate in the second half at the highest of our expectations, as our AI products in studio platform perform ahead of plan. Additionally, we now expect total revenue of $1,747 to $1,761 million, or 12 to 13% year-over-year growth. On the cross side, we continue to expect to expect land gap total growth margin of 68 to 69% for the full year.

Lior: I want to highlight that this updated guidance still reflects an acceleration in total bookings 0 to 16% at the high end of our expectations. This has not changed from what we shared in May, as we continue to see broad-based trends across our platforms. We continue to expect to see self-creators and public growth continue to accelerate in the second half at the high end of our expectations as our AI products and studio platforms perform ahead of plan.

Speaker Change: I want to highlight that this updated guidance still reflects an acceleration in total bookings 0 to 16% at the high end of our expectations. This has not changed from what we shared in May, as we continue to see broad-based trends across our platform.

Speaker Change: We continue to expect to see self-creators and public growth continue to accelerate in the second half at the high end of our expectations as our AI products and studio platforms perform ahead of plan.

Lior: Additionally, we now expect total revenue of $1,747 to $1,761 million, or 12% to 13% year-over-year growth. On the cost side, we continue to expect non-GAAP total growth margin of 68% to 69% for the full year. Additionally, as we sustain the lower operating expense base achieved in the most recent quarter, non-GAAP operating expenses are now expected to be approximately 50% of revenue for the full year.

Speaker Change: 12-13% year-over-year growth. On the cost side, we continue to expect a 9-gap total growth margin of 68-69% for the full year.

Lior: As we sustain the lower operating expense base achieved in the most recent quarter, nine gap operating expenses are now expected to be approximately 50% of revenue for the full year. of 50-51% of revenue. As a result, we expect to generate free cash flow, excluding headquarter cost of $460-470 million or approximately 27-6-27% of revenue in 2024. This is an increase from the $445-455 million, or 26% of revenue, previously expected. We now expect to achieve the Rule of 40 milestone this year, assuming the high end of our revenue and free cash flow guidance ranges. This will be a major milestone that we have typically worked towards for the past three years.

Speaker Change: As we sustain the lower operating expense base achieved in the most recent quarter,

Lior: This is slightly lower than our previous expectation of 50% to 51% of revenue. As a result, we expect to generate free cash flow, excluding headquarter costs, of $460-470 million, or approximately 26-27% of revenue in 2024. This is an increase from the $445-455 million, or 26% of revenue previously expected.

Speaker Change: This is slightly lower than our previous expectation of 50% to 51% of revenue.

Speaker Change: We expect to generate free cash flow.

Speaker Change: Excluding headquarter cost of $460 to $470 million dollars.

Speaker Change: or approximately 26 to 27 percent.

Lior: We now expect to achieve the Rule of Forty milestone this year, assuming the high end of our revenue and free cash flow guidance to be met. This will be a major milestone that we have steadfastly worked towards for the past three years. Even more impressively, we will be achieving this goal one year ahead of schedule. This is a testament to the successful execution of our strategic initiatives and focused commitment to profitable growth.

Lior: Even more impressively, we will be achieving this goal one year ahead of plan. This is a testament to the successful execution of our strategic initiatives and focus commitment to profitable growth.

Lior: But this is certainly not the finished line for us. The Brookings Acceleration expected this year set us up for revenue growth acceleration in 2025. We also expect continued incremental free cash flow margin improvements as we maintain our stable cost structure while our business scales. As a result, we are positioned to serve as the Rule of 40 in 2025 more meaningfully than previously expected.

Lior: But this is certainly not the finish line for us. The bookings acceleration expected this year sets us up for revenue growth acceleration in 2025. We also expect continued incremental free cash flow margin improvements as we maintain our stable cost structure while our business scales. As a result, we are positioned to surpass the Rule of 40 in 2025 more meaningfully than previously expected.

Speaker Change: We also expect continued incremental free cash flow margin improvements as we maintain our stable cost structure, while our business scales. As a result, we are positioned to surpass the Rule of 40 in 2025 more meaningfully than previously expected.

Lior: Finally, I would like to finish with highlighting another aspect of our three-year plan that we are tracking ahead of our share repurchase commitment. In the second quarter, we repurchase 225 million of shares, making the completion of the board authorized plate approved last August. This marks more than $1 billion of share repurchases executed since 2021. We remain committed to returning value to shareholders and consider share repurchases a key tool in our capital allocation strategy. As such, our board authorized a new 200 million programs to repurchase our securities. The progress made over the past couple of years demonstrates our track record of not just executing but outperforming our set goals.

Lior: Finally, I would like to finish by highlighting another aspect of our three-year plan that we are tracking ahead of, our share repurchase commitment. In the second quarter, we repurchased 225 million shares, completing the completion of the board-authorized plan approved last August. This marks more than $1 billion of share repurchases executed since 2021. We remain committed to returning value to shareholders and consider share repurchases a key tool in our capital allocation strategy.

Speaker Change: Finally, I would like to finish with highlighting another aspect of our three-year plan that we are tracking ahead of.

Speaker Change: This marks more than $1 billion of share repurchases.

Lior: As such, our board has authorized a new $200 million program to repurchase our security. The progress made over the past couple of years demonstrates our track record of not just executing but outperforming our set goals. I look forward to building on our momentum in the second half of the year and the milestones still to come. Operator, we are now ready for questions. Thank you.

Speaker Change: The progress made over the past couple of years demonstrates our track record of not just executing but outperforming our set goals.

Lior: I look forward to building on our momentum in the second half of the year and the milestone still to come.

Operator: Operator, we are now ready for questions. Thank you.

Operator: Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And our first question comes from the line of Ygal Arounian of Citigroup. Your line is open.

Operator: As a reminder to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by. We will compile the Q&A roster.

Speaker Change: Thank you.

Ygal Arounian: And our first question comes from the line of EGAL Arunian of Citigroup. Your line is open. Good morning, good afternoon, guys.

Speaker Change: And our first question comes from the line of Ygal Arounian of Citi Group. Your line is open.

Ygal Arounian: Hey, good morning, good afternoon, guys. Great quarter, and maybe I want to focus first on the commerce packages and go into a little bit more detail there. It seems to be more of a driver now with the partner side. Can you share a little bit more about the new types of customers that are coming on board? What type of merchants are they? You know, this kind of move to larger merchants, what that opportunity is for you guys, feels a little bit newer.

Ygal Arounian: Great quarter, and maybe I want to focus first on the commerce packages and does one until a little bit more detail there. It seems to be more of a driver now with the partner side. Can you share a little bit more about the new types of customers that are coming on board? What type of merchants they are? This moves to large merchants. What that opportunity for you guys just feels a little bit more newer. So I think naturally, as we gain more and more traction with Wix Studio and with partners and the professional crowd, we're also attracting bigger merchants of all kinds.

Speaker Change: There's a little bit more detail there. It seems to be more of a driver now with the partner side.

Speaker Change: Can you share a little bit more about the new types of customers that are coming on board, what type of merchants they are, you know, this kind of move to larger merchants, what that opportunity is for you guys. It feels a little bit more newer, I guess.

Nir Zohar: Hey Ygal, it's Nir. So, you know, I think naturally as we gain more and more traction with, you know, with Wix Studio and with partners and the professional crowd, we're also attracting bigger merchants of all kinds. So, you know, it can be on the bookings and scheduling platform, it can be on the stores and commerce platform, it can be bigger events; it really is across the board. And I think it's a testament to two things. First of all, it's the ongoing increased maturity of our commerce offering in all of these different verticals, as well as the increased penetration and market share we're taking into the professional market.

Ygal Arounian: Got it. Okay.

Nir Zohar: So it can be on the bookings and scheduling platform, it can be on the stores and commerce platform, it can be bigger events. It really is across the board. And I think it's a testament to two things. First of all, it's the ongoing increased maturity of our commerce offering in all of these different verticals, as well as the increased penetration and market share we're taking into the professional market.

Speaker Change: It can be on bookings and schedules, stores and commerce platforms, it can be bigger events. It really is across the board. And, I think it is a testament to two things.

Got it.

Ygal Arounian: And then just a follow-up on the self-creator side, particularly on the AI products. And I know self-creators are supposed to be part of what drives acceleration and 2H bookings. What are you seeing there so far on the AI uptake? I know you've got a lot of products and more in the pipeline. And are there any KPIs that are giving you confidence that we're going to continue to see improvement, better conversions, higher ARPU, those types of things? Well, I think that

Nir Zohar: Okay, and then just a follow-up on a subcreator side, particularly on the AI products, and I know subcreators are supposed to be part of what drives the acceleration into each bookings. Well, what are you seeing there so far on the AI I'll take. I know you've got a lot of products and more in the pipeline. And are there any KPIs that are giving you confidence that we're going to continue to see that improvement, better conversions, higher up to those types of things. Well, I think that yes, we do have KPIs, and we're more than that; we have a long trend that we see that can be continuously improved, and I'll explain.

Speaker Change: Just a follow-up on the self-creator side.

Speaker Change: particularly on the AI products, and I know self-creators or

Avishai Abrahami: Well, I think that... Yes, we do have KPIs. And more than that, we have a long trend that we see that can be continuously improved. And I'll explain. We released ADI, the first A.I. product. The A.I.

Speaker Change: Well, I think that the...

Avishai Abrahami: In the least ADI, the first AI product, generally I product actually created website right in the end of 2016. And since then we've seen that by exposing users to AI functionality as part of the natural progression in the product life cycle. We get very high adoption of using those kind of tools and results that can improve. And for the AI, we showed that we improve the conversion dramatically. The new version that came earlier this year did it again. And we're seeing that a lot of the agents that we have now, AI agents, when they start to pick up more user interactions and more user conversations, again create a measurable effect.

Avishai Abrahami: The product actually created websites right at the end of 2016. And since then, we've seen that by exposing users to AI functionality, part of the natural progression in the product life cycle, we get very high adoption of using those kinds of tools and results that can improve. And for ADI, we showed that we improved the conversion dramatically. The new version that came earlier this year did it again.

Speaker Change: We get very high adoption of using those kind of tools.

Speaker Change: and results that can improve. And for ADI, we showed that we improved the conversion dramatically. The new version that came earlier this year did it again.

Avishai Abrahami: And we are seeing that a lot of the agents that we have now. AI agents, when they start to pick up more user interactions and more user conversations, again create measurable effects. So I'm very optimistic. I think that our experience in releasing AI technology, which is almost eight years now, seven years, is helping us understand how to integrate them into the product in a way that actually makes users interact with them and that they feel natural and don't feel like you're stepping out of what you're doing to do something else and then coming back. I mean, that creates a big difference. So yes, I'm very optimistic about the potential that we're gonna see a Continuation of the

Speaker Change: and we are seeing that a lot of the agents that we have now...

Avishai Abrahami: So I'm very optimistic. I think that our experience in releasing AI technology, which is almost eight years now, seven years now, is helping us understand how to interpret them into the product in a way that actually makes user interact with them and that they feel natural and don't feel like you're stepping out of what you're doing to do something else and then coming back. And I mean, that creates a big difference. So yes, I'm very optimistic and on the potential that we're going to see a continuation of the improvement. Thank you.

Speaker Change: I think that...

Speaker Change: is helping us understand how to integrate them into the product in a way that actually

Speaker Change: makes users interact with them and that they feel natural and don't feel like you're stepping out of what you're doing to do something else and then coming back. I mean that creates a big difference. So yes, I'm very optimistic on the potential that we're going to see a

Operator: Thank you. And our next question comes from the line of Andrew Boone of JMP Securities. Your line is open.

Andrew Boone: And our next question comes from the line of Andrew Boone of JMP Securities. Your line is open. Thanks so much for taking my questions. I wanted to ask on studio's momentum. You guys are struck the lap tougher concert.

Speaker Change: Thank you. And our next question comes from the line of Andrew Boone of JMP Securities. Your line is open.

Andrew Boone: Thanks so much for taking my questions. I wanted to ask about studio momentum; you guys are starting to lap tougher comps here. Can you just speak to the sustainability of studios? And then there is a bigger picture question about studios. And again, relating this back to AI, how does AI change the studio and partners' opportunity? Is there any worry there that is to improve the self-creator product that there may be a shift back to self creators? Do you guys care? What how do we think about that balance? Thanks so much. Alright, so that's like three different questions.

Avishai Abrahami: Can you just speak to the sustainability of studios. And then a bigger picture question on studios. And again, relating this back to AI, how did the AI change the studio and partners' opportunity? Is there any worry there that is who improved the self creator product that there may be a shift back in the self creators? Do you guys care? How do we think about that balance? Thanks so much.

Andrew Boone: And then a bigger picture question on studios, and again, relating this back to AI, how does AI change the studio and partners' opportunity? Is there any worry there that is to improve the self-creator product, that there may be a shift back in the self-creators? Do you guys care? How do we think about that balance? Thanks so much.

Avishai Abrahami: All right, so that's like three different questions. And we're very happy, of course, with Shiloh Growth. It's a young product. It was released less than a year ago, about a year ago, and we can already see significant results from it. And one of the biggest signals that we have is that we're seeing new kinds of agencies that join Wix that would not normally join. And in addition, we're seeing that many of those agencies will buy an ad website, right, to buy more subscriptions as time progresses.

Avishai Abrahami: All right, so that's like in creative in question. I would be first. We're very happy, of course, with Chiropro. It's a young product. It was released less than a year ago, about a year ago. And we can see already significant results from it. One of the biggest signals that we have is that we're seeing a new kind of agencies that join Wix that would not normally join. And in addition, we're seeing that many of those agencies will buy ed website, right? So buy more subscription as time progresses. So they'll buy two, three, four, five, six, seven, and more subscriptions when they create new websites.

Speaker Change: All right, so that's like three different questions. I'll start with the first one.

Speaker Change: We're very happy, of course, with Chiru Growth. It's a young product. It was released less than a year ago, about a year ago, and we can see already significant results from it. One of the biggest signals that we have is that

Speaker Change: We're seeing new kind of agencies that join Wix that would not normally join.

Avishai Abrahami: So they buy two, three, four, five, six, seven, and more subscriptions when they create new websites. And for us, it's a signal not just that they use Studio once or twice, but that they're actually adopting the product and going to continue to use it for the longer term. Of course, for us as a company, it means that we are compounding growth because every agency that does it has a compounding effect. So this is, again, a very good signal.

Avishai Abrahami: And for us, it's a signal, not just that they use studio ones twice, that they actually are adopting the product and they're going to continue to use it in a longer term. Of course, for us, the company means that we are compounding, right, growth, because every one agency that does it is compounding as a compounding effect. So this is, again, a very good signal.

Speaker Change: And for us, it's a signal not just that they...

Speaker Change: Right growth because every one agency that does it is a compounding as a compounding effect. So this is a Again, a very good

Avishai Abrahami: SIGNA, That was the first right question. The second question was about how does a studio and use AI? Well, there is a massive difference between what an agency and the NSF creators need from AI. So for me, if I want to design a website, and I'm not a designer, I want AI to help me design it because English is not my first language. And I'm not writing so well in Hebrew either, right?

Avishai Abrahami: That was the first slide question. The second question was about how does a studio use utilizes AI? Well, there are massive; it is big difference between what an agency and a set creators need for AI. So for me, if I want a designer website, and I'm not a designer, I want AI to help me design it because my English is not my first language. And I'm not writing so well in Hebrew as well, right? So I would love AI to also write and help me write great text and generate images. When you're an agency, you probably know how to design, and you have your system of design and how things should look like.

Speaker Change: SIGNA

Avishai Abrahami: So I would love AI to also write and help me write great text and generate images. When you're an agency, you probably know how to design, and you have your system of design and how things should look, so you don't need that. You probably need a little bit of help with the text, but other things like image editing, right, and content recomposition create tremendous value.

Speaker Change: and generate images.

Speaker Change: When you're an agency, you probably know how to design and you have your system of design and how things should look like, so you don't need that.

Avishai Abrahami: So you don't need that. You probably need a little bit to help with a text, but other things like the image editing, right, and the content's recomposition, great tremendous value. And then there are other things that, in addition to that, for example, a great designer, not necessarily know how to configure things to work in a responsive way on different screen resolutions, and we have an AI to do that. So we are utilizing those kind of technologies to streamline the agency's experience and work and efficiency in a way that is significant.

Speaker Change: You probably need a little bit to help with the text, but other things like the image editing and the contents recomposition create tremendous value.

Avishai Abrahami: And then there are other things that, in addition to that, for example, a great designer does not necessarily know how to configure things to work in a responsive way on different screen resolutions, and we have an AI to do that. So we are utilizing those kinds of technologies to streamline the agency, the experience, work, and efficiency in a way that is significant today, and I think we have some ideas on how to make it even more significant going forward.

Speaker Change: There are other things that, in addition to that, for example, a great designer does not necessarily know how to configure things to work in a responsive way on different

Speaker Change: Screen Resolutions, and we have an AI to do that. So we are utilizing those kind of technologies to streamline the agencies.

Avishai Abrahami: And I think we have some ideas on how to make it even more significant going forward. And for the question, I'll ask you a part of the question, which is, do we have concern between how agencies and regulators will end up in the future? Meaning, well, I'm sure if you can just one day talk to the computer and get the full website functioning that knows exactly what you'd be there. And that is easy to update that maybe some of the agencies' business will disappear, but there is a long way until we get to something similar to that.

Speaker Change: experience and work and efficiency in a way that is significant today and I think we have some ideas on how to make it even more significant going forward.

Avishai Abrahami: As for the last part of the question, which is... Do we have concerns about how agencies and self-creators will end up in the future? Meaning, well, in theory, if you can just one day talk to a computer and get the full website functioning, that knows exactly what should be there, and that is easy to update, that maybe some of the agency's business will disappear. But there is a long way until we get to something similar to that.

Speaker Change: As for the last part of the question, which is...

Speaker Change: Some of the agency's business will disappear, but there is a long way until we get to something similar to that. And I think the majority of businesses...

Avishai Abrahami: And I think the majority of businesses, in the case that they need a website, they want somebody to be responsible for it, somebody that knows how to activate the tools and use them and utilize them. And that's why they go to agencies because they have a professional that understands how to take care of all of their business needs. And there's a lot of this, right from SEO to how do you write things correctly in order to get the right shipping rules, and there's tons of things. So I think that when there's a long way for AI.

Avishai Abrahami: And I think the majority of businesses. In the case that they need a website, they want somebody to be responsible for it, somebody that knows how to activate the tools and use them, and utilize them. And that's why they go to agencies, because they have a professional that understands how to take care of all of their business needs. And there are a lot of those, right, from SEO to how do you write things correctly in order to get the right shipping rules, and there are a ton of things.

Speaker Change: In the case that they need a website, they want somebody to be responsible for it, somebody that knows how to activate the tools and use them and utilize them.

Speaker Change: And that's why they go to agencies, because they have a professional that understands how to take care of all of their business needs. And there's a lot of those, right, from SEO to how do you write things correctly in order to get the right shipping rules, and there's a ton of things.

Avishai Abrahami: So I think that... and where AI still has a long way to go before it can successfully replace good agencies. And unless, of course, you're a self-creator by nature, which is a lot of most of our customers, and you want to create your own website, you can control it, and you can do those things, and you can change it. So I think the difference is in the user type and user intent, and not necessarily in technology, which I believe means that, and both will continue to grow in agencies and self-care.

Avishai Abrahami: To go before it can successfully replace good agencies. And unless, of course, you are a self-creator by nature, which is a lot of most of our customers, and you want to create your website, you can control it and you can do those things and you can change it. Thank you.

Speaker Change: And well, there's a long way for AI.

Speaker Change: And unless, of course, you're a self-creator by nature, which is a lot of most of our customers, and you want to create your website, you can control it, and you can do those things, and you can change it.

Speaker Change: The difference is in the user type and user intent and not necessarily in technology, which I believe means that...

Operator: Thank you. And our next question comes from the line of Elizabeth Porter of Morgan Stanley. Your line is open.

Elizabeth Porter: And our next question comes from the line of Elizabeth Porter of Morgan Stanley. Your line is open. Great. Thank you very much. I wanted to follow up on the strong adoption of AI solutions thus far. Are you seeing different initial adoption rates or behavior from new versus existing customers? And how do you see the opportunity of evolving? What is that kind of opportunity around going back to the existing customer base and driving more spend that existing cohort? Thank you. Elizabeth, thank you for the question. And yes, we do see a different adoption rate between new users and, of course, older users.

Speaker Change: Thank you.

Elizabeth Porter: Great, thank you very much. I wanted to follow up on the strong adoption of AI solutions thus far. Are you seeing different initial adoption rates or behavior from new versus existing customers? And how do you see the opportunity evolving? What is the kind of opportunity around going back to the existing customer base and driving more spend with that existing cohort? Thank you.

Speaker Change: Are you seeing different initial adoption rates or behavior from new versus existing customers?

Speaker Change: And how do you see the opportunity evolving? What is that kind of opportunity around going back to the existing customer base and driving more spend with that existing cohort? Thank you.

Avishai Abrahami: Well, Elizabeth, thank you for the question, and yes, we do see a different adoption rate between new users and, of course, all the users. One of the qualifications that you needed to have in order to be able to use Wix in the past was to know how to code at some level, to know how to write text at some level, and to trust yourself that you're good enough to do it, right?

Avishai Abrahami: One of the qualifications that you needed to have in order to be able to use Wix in the past was to know how to design to some level, to know how to write text to some level, and to trust yourself that you are good enough to do it. And so most of our users feel that they know how to do those things, and naturally they will use less AI because they think they can just do it. And I think we are now opening to users that don't feel that right? They don't expect themselves to know how to do those things and expect us to have the tools to AI tools to automate it for them.

Speaker Change: Designed to some level, to know how to write text to some level, and to trust yourself that you're good enough to do it, right?

Avishai Abrahami: So most of our users feel that they know how to do those things. And naturally, they will use less AI because they think they can just tweet. And I think we are now opening up to users that don't feel that way, right? They don't expect themselves to know how to do those things and expect us to have the tools, AI tools, to automate it for them. So we're already seeing some of this gap, and I believe that this will continue to grow. And essentially, we're opening Wix to be more useful to more new types of customers.

Elizabeth Porter: So I already seen some of this gap, and I believe that this will continue to grow, and essentially we are opening Wix to be more useful to more and new types of customers. Great. And then just as a follow-up, really impressive to see that they are hitting the Rule of 40 early. As we are looking out, I am just hoping you could provide any context around the view for exceeding rule of 40 in 2025. If we look at just the free cash flow margin, it seems a really good expansion this year. So how should we think about kind of magnitudes for next year and any factors or actions that you are driving that would support free cash flow margin, materially ahead of the operating margin expansion?

Speaker Change: to be more useful to more new types of customers.

Elizabeth Porter: Great. And then, just as a follow-up, really impressive to see that hitting the Rule of 40 early. As we're looking ahead, I'm just hoping you can provide any context around the view of exceeding the Rule of 40 in 2025. If we look at just the free cash flow margin, we've seen some really good expansion this year. So how should we think about the kind of magnitudes for next year and any factors or actions that you're driving that would support free cash flow margin materially ahead of operating margin expansion?

Speaker Change: Great. And then just as a follow-up, really impressive to see that hitting the Rule of 40 early. As we're looking out, I'm just hoping you could provide any context around the view for exceeding Rule of 40 in 2025.

Speaker Change: If we look at just the pre-cash flow margin, we've seen some really good expansion this year. So how should we think about kind of magnitudes for next year and any factors or actions that you're driving that would support pre-cash flow margin materially ahead of operating margin expansion?

Lior: Elizabeth, this is Leo. So I assume that next year is a combination of both growth but also margin expansion. Take, for example, you know, for example, overall payroll expenses. So yes, I mean we are going to increase payroll expenses in dollars, but in terms of growth as a percentage of revenue on a year-over-year basis, it will not be the same as revenue. Meaning that the revenue growth will be much faster than that. So it means that we are going to see more leverage coming from all kinds of different expenses, although we are going to increase investment, for example, in market.

Lior: Elizabeth, this is Leo. So I assume that next year is a combination of both growth and margin expansion. Take, for example, overall payroll expenses. So yes, we are going to increase payroll expenses in dollars. But in terms of growth, as a percentage of revenue, on a year-over-year basis, it will not be the same as revenue, meaning that revenue growth will be much faster than that. So it means that we are going to see more leverage coming from all kinds of different expenses, although we are going to increase investment, for example, in marketing.

Speaker Change: But in terms of growth, as a percentage of revenue on a year-over-year basis, it will not be the same as revenue, meaning that the revenue growth...

Lior: But still, as a percentage of revenue, we are going to see some leverage over there as well.

Speaker Change: But still, as a percentage of revenue, we are going to see some leverage over there as well. So I believe that the combination of what we are seeing right now, a very strong execution of bookings growth on a year-over-year basis,

Lior: So I believe that the combination of what we have seen right now, a very strong execution of bookings, a growth on a year-over-year basis, which obviously will be reflected into our higher acceleration of revenue next year. The combination of that with the expansion of smartgains will lead me to believe that we are going to significantly surpass the rule of 40 next year. Great, thank you for the context. Thank you.

Lior: But still, as a percentage of revenue, we are going to see some leverage over there as well. So I believe that the combination of what we are seeing right now, a very strong execution of bookings growth on a year-over-year basis, which obviously will be reflected in our higher acceleration of revenue next year. The combination of that with the expansion of margins will lead me to believe that we are going to significantly exceed the Rule of 40 next year.

Speaker Change: which obviously will be reflected into a higher acceleration of revenue next year. The combination of that...

Elizabeth Porter: Great, thank you for the contact.

Operator: Thank you. And our next question comes from the line of Jian Li of Evercore ISI. Your line is open.

Jian Li: And our next question comes from the line of Jian Li of Evercore ISI; your line is open. Great, thanks for taking a question. So first, Liu, I want to kind of circle back to your comment about back half conservatism in a guide due to macro. Just to clarify, is it general conservatism, or are you seeing any potential volatility into Q3 to date? If you can kind of talk about macro impact in top of funnel for both your partners, which assuming are more resilient and self-creators, that would be great. Thank you.

Jian Li: Great, thanks for taking the question. So first, Leo, I want to kind of circle back to your comment about back half conservatism in a guide due to macro. Just, you know, to clarify, is it general conservatism, or are you seeing any potential volatility into Q3 to date? If you can kind of talk about the macro, you know, impact in top of funnel for both your partners, which, assuming, are more resilient and self-creators, that'd be great. Thank you.

Speaker Change: Great, thanks for taking the question. So first, Leo, I want to kind of circle back to your comment about

Speaker Change: If you can kind of talk about the macro, you know, impact in PapaFunnel for both your partners, which I'm assuming are more resilient and self-creators, that would be great. Thank you.

Lior: So no, definitely it's something that, in general, it's not something that is specific to the third or the fourth quarter. It's really hard for me to know, but you know, being conservative around the macro and effects is something that we always take into consideration when we provide guidance. I think that it's really important. I mean, we've seen that, you know, the execution of bookings for the second quarter was really in line with our expectations, which was 15%.

Lior: So no, definitely it's something that, in general, it's not something that is specific for the server of the fourth quarter. It's really hard for me to know. But you know, being conservative around macro and effects, it's something that we always take into consideration when we provide the guidance. I think that it's really important. I mean, we've seen that, you know, the execution of bookings for the second quarter was really in line with our expectations, was 15%. But it puts us in a place that it will be, you know, it's very easy to understand how we get to the 16% now, as we mentioned last quarter that we will be at.

Lior: But it puts us in a place that it will be, you know, it's very easy to understand how we get to the 16th defense now, as we mentioned last quarter, that we will be at. So, no, there's nothing really specific about the thirds, not about the fourth quarter, but that's it. I really don't know.

Lior: So no, there's nothing really specific about the service, not about the fourth quarter, but that said, they really don't know. Got it. That's helpful.

Speaker Change: So no, there's nothing really specific about the third, not about the fourth quarter, but that said, I really don't know.

Jian Li: Got it. That's helpful. And also, another one on payment. Appreciate the color around, you know, vertical expansion and taking on new partners and expanding the adoption. Is there any lever that you can think of in terms of improving the Wix payment take rate by itself? Like, what I mean is, you know, any value-added service around the payment service that you can kind of help to improve the gross margin profile of Wix payment, if that makes sense?

Lior: And also another one on payment. Appreciate the color around, you know, vertical expansion and taking on new partners and. Extending adoption, is there any lever that you can think of in terms of improving the Wicks payment take rate by itself? Like what I mean is, you know, any value added service around the payment service that you can kind of help to improve the gross margin profile of which payment, if that makes sense. So I don't know about necessarily the gross margin is by the adoption and increasing the take rate, right? So, you know, in a sense, if I manage to get everyone to the maximum, I'll get to, you know, take rate of almost 3%.

Nir Zohar: So, I don't necessarily know about the gross margin. I mean, the general gross margin is through adoption and increasing the take rate, right? So, you know, in essence, if I manage to get everyone to the maximum, I'll get to, you know, a take rate of almost 3%. Naturally, that's not the case; it's not the case with anyone in our industry. And I think if you look at the best in class in our industry, they get to about 2.3%. 2.25%. That's definitely something to aspire to.

Speaker Change: So, I don't know about necessarily the growth, I mean, the general growth margin is by the adoption and increasing the take rate, right? So, you know, in essence, if I manage to get everyone to the maximum, I'll get to, you know, a take rate of almost 3%.

Lior: Naturally, that's not the case. It's not the case with anyone in our industry. And I think if you look at come to the best in class in our industry, they get to about 2.2-2.25%. That's definitely something to aspire to. But I think the drivers are, you know, the things we spoke about, which is kind of more partners. I am making a driving motor of our customers to adopt weak payments rather than other providers. But it's also the introduction of new capabilities, a new product, new verticals, adding the POS that allows us to attach and attach some of the offline transactions that make them move them online. You know, things like the donations verticals, the proposals.

Nir Zohar: But I think the drivers are, you know, the things we spoke about, which is kind of more partners driving our customers to adopt Wix payments rather than other providers. But it's also the introduction of new capabilities and new products, new verticals, adding the POS that allows us to attach and touch some of the offline transactions and move them online. You know, things like the donation verticals, the proposals, all of this innovation is another great way to tap into and expand our GPV. And I do think that we still have lots of room to grow there in the next few years.

Speaker Change: 2.25%. That's definitely something to aspire to. But I think the drivers are, you know, the things we spoke about, which is kind of more partners, making driving more of our customers to adopt

Speaker Change: Wix Payments rather than other providers.

Speaker Change: Editing the POS that allows us to attach and detach some of the offline transactions and make them, move them online, you know, things like the donations, verticals, the proposals, all of these.

Lior: All of this innovation is another great way to tap and expand our GPV. And I do think that we still have, we have a lot of room to grow there in the next few years.

Speaker Change: All of this innovation is another great way to tap and expand our GPV, and I do think that we still have lots of room to grow there in the next few years.

John Dionne: Thank you. Thank you, and our next question comes from the line of Brent Phil of Jeffries. Your line is open. Thank you, this is John Dionne on behalf of Brent Phil.

Operator: Thank you. Thank you. And our next question comes from the line of Brent Thill of Jeffries. Your line is open. All right, thank you.

Speaker Change: Thank you.

Brent Thill: Thank you. And our next question comes from the line of Brent Phil of Jeffries. Your line is open.

Nir Zohar: I don't know if you're interested in this a little bit earlier, but in terms of when you mentioned a bit more macro and predictability, I don't know if you could give a little bit more call what you're seeing, you know, especially around, you know, the SMB health among your cohorts. And anything on the geographic side, and it looks like the trends were fairly consistent, but once you've seen any, anything notable though, geography wise, thank you. Hey, so I think again, I don't think we can point out anything specific with a major shift in either here, nor there in terms of the, you know, SMB health or, you know, any geography and in general.

John Bion: Hi, thank you. This is Jian Biao on behalf of Brent Cell. I don't know if you were interested in this a little bit earlier, but in terms of when you mentioned a bit more macro and predictability, I wonder if you could give a little bit more call to what you're seeing, you know, especially around, you know, ESMB health among your cohorts.

Nir Zohar: Hey, so I think, again, I don't think we can point out anything specific about a major shift, neither here nor there, in terms of the, you know, S&B health or, you know, in any geography, and in general. We spoke about this in the past, I think, a few quarters that, you know, ever since kind of the mid last year, we've seen a stabilization in the behavior with a slight increase, but very moderate.

Nir Zohar: We spoke about this in the past, I think a few quarters that, you know, ever since kind of the mid last year, we've seen a stabilization in the behavior with a slight increase, but very moderate. So, you know, the Eurogroup slightly more discord, but it's not significant enough, you know, to call anything specific. You know, vertical, in terms of the, the verticals, as Leora mentioned, we've seen, you know, our scheduling and bookings and events of ethical growth a little bit faster than other verticals. But these, I would say again, I don't think any of those can be any, you know, any concrete signals that you can read into macro economy.

Speaker Change: We spoke about this in the past, I think, few quarters that, you know, ever since kind of the mid last year.

Speaker Change: We've seen a stabilization in the behavior with a slight increase, but very moderate. So, you know, the euro grew slightly more this quarter, but it's not significant enough in order to call anything specific.

Nir Zohar: So, you know, the Euro grew slightly more this quarter, but it's not significant enough, you know, to call anything specific. You know, verticals, in terms of the verticals, as Lior mentioned, we've seen our scheduling and bookings and events for verticals grow a little bit faster than other verticals. But these, I would say, again, I don't think any of those can be any, you know, any concrete signals that you can read into macroeconomics. I think we're still seeing pretty much stability. By the way, this is why we are

Nir Zohar: I think we're still seeing pretty much stability.

Nir Zohar: By the way, this is why we are providing a range. I think that some of it has got to do with that. I mean, we don't always know exactly, you know, the behavior in every country. And this is why we provide range in order to reflect that. Thank you.

Nir Zohar: By the way, this is why we are providing range. And I think that some of it has got to do with that. I mean, we don't always know exactly the behavior in every country. And this is why we provide range in order to reflect that.

Operator: Thank you. And our next question comes from a line called Josh Beck of Raymond James. Your line is open.

Josh Beck: And our next question comes from a line of Josh Beck of Raymond James. Your line is open. Yes. Thanks so much for taking the question. I was pretty impressed with this metric that you all gave about 17 AI assistance, and I believe you said there's dozens more to come. That's a big number, probably certainly larger than what we've seen elsewhere.

Josh Beck: Yes, thanks so much for taking the question. I was pretty impressed with this metric that you all gave about 17 AI assistants, and I believe you said there are dozens more to come. That's a big number, probably certainly larger than what we've seen elsewhere. So maybe if you could just kind of help unpack within that, maybe how many are external customer facing, how many are internal efficiency driven, and maybe what are kind of rising to the top as some of the most promising use cases there.

Avishai Abrahami: So maybe if you just kind of help unpack within that, maybe how many are external customer facing, how many are internal efficiency driven, and, you know, maybe what are kind of rising to the top as some of the most promising use cases there. Of course, so maybe I'll start with the easiest part of the question. How many of the 17 are customizing, and the answer is all of them. The concept is that we are currently with a platform in which it is easier for us to build an AI assistant. And that enabled us to develop two kinds of different assistants.

Avishai Abrahami: Of course,

Avishai Abrahami: Of course, so maybe I'll start with the easiest part of the question, how many of the 17 are customers, I think, and the answer is all of them. The concept is that we are currently within a platform that makes it easier for us to build an AI. And that has enabled us to develop two kinds of different assistance. The first one... would be a question and answer.

Avishai Abrahami: The first one would be a question and answers AI assistant. So if you have a product booking, how do I add this staff member to my yoga studio, right? And so you can actually talk to the AI and ask questions, get answers, ask questions, get answers is you will do with the normal human being. And we see great result in that in terms of how customer is. This is quickly fine dancers; hallucinations are very small, the percentage probably similar to what a human would do, not even better. And of course, tens of customer experience is incredible because they get the answers now.

Avishai Abrahami: A.I. assistant. So if you have a product like booking, how do I add a staff member to my yoga studio, right?

Avishai Abrahami: And so you can actually talk to the A.I. and ask questions, get answers, ask questions, get answers, as you would do with a normal human being. And we see a great result in terms of how customers quickly find answers. Hallucinations are very small, the percentage is probably similar to what a human would do, not even better, and, And of course, in terms of customer experience, it's incredible because they get answers now. They don't have to contact support.

Avishai Abrahami: They don't have to start searching Google. And so this is very exciting. The other thing that we are doing is that you can ask questions, and you can have the AI do things for you. So this is the second kind.

Avishai Abrahami: They don't have to contact supporters; they don't have to search in Google. And so this is very exciting. The other thing that we are doing is that you can ask questions, and you can have the AI do things for you. So this is the second kind. And, for example, if you go to our analytics, you see that you can actually start asking questions and get reports done for you automatically by the AI. So this is an AI that activates other agents in order to give you answers or two actions for you. How do I make an event that has a wedding event, what kind, and then we do our RSVP.

Avishai Abrahami: And for example, if you go to our analytics, you see that you can actually start asking questions and get the reports done for you automatically by the AI. So this is an AI that activates other agents in order to give you answers or do actions for you. How do I make an event that is a wedding event? What kind?

Avishai Abrahami: And then we do RSVP. But if you want to create an event which is selling tickets for a concert, it will define that for you and work with you on that. So those kind of things streamline and reduce a lot of friction from the customer. And we intend to integrate them, of course, into one coherent experience, and we're going to add those kinds of assistants pretty much everywhere that we can on Wix.

Avishai Abrahami: But if you want to create an event which is selling tickets for a concert, it will define that for you and work with you on that. So those kinds of things and streamline and reduce a lot of friction from the customer. We intend to integrate them, of course, to one coherent experience. And we are going to add those kind of assistance in pretty much everywhere that we can on wakes. And I think the overall change in a from a customer perspective is tremendous. You get quick answers, hard-quality answers to your questions, and you get an AI that will help you set up things or change things or ask questions like get analytics.

Avishai Abrahami: And I think the overall change from a customer perspective is tremendous. You get quick answers, high-quality answers to your questions. And you get AI that will help you set up things or change things or ask questions or get analytics. So it's a really big difference for me as a customer.

Avishai Abrahami: So it's really a big difference from a customer perspective.

Josh Beck: understood. Very helpful.

Avishai Abrahami: I understand very helpful and maybe just a follow up on Studio and really trying to think about the monetization curve. It's been in the market for a year. So from the point at which somebody is creating an account to their ramp and learning curve with the new editor to really starting to produce a meaningful number of websites. I don't, you know, not looking for anything specific, but maybe if you look at some of the early cohorts, kind of what you've learned and in terms of model impact, I mean, is this something that, you know, we should be thinking about 25 is more impactful to revenue or maybe it's, you know, a bit beyond that.

Josh Beck: And maybe just a follow-up on Studio and really trying to think about the monetization curve. It's been in the market for a year. So from the point at which somebody is creating an account to their ramp and learning curve with the new editor to really starting to produce a meaningful number of websites. I don't, you know, I'm not looking for anything specific, but maybe if you look at some of the early cohorts, kind of what you've learned and in terms of model impact. I mean, is this something that, you know, we should be thinking about 25 as more impactful to revenue, or maybe it's, you know, a bit beyond that, just something we'd love in any color?

Avishai Abrahami: I just would love any color there. Well, of course, I think that the modeling Leo will answer. I'm as much as I say, but the behavior. What I was saying is that people will come to Studio and usually play with it. So agencies will come and play with the product, and it's in point in time. They'll take a project that they just got to, which is mostly a new project. So you have to wait until they have a new project, and then they'll implement that first project on which Studio. And this is the most critical time, of course.

Avishai Abrahami: Well, of course, I think that modeling Leo will answer that question. I'm just going to say something about behavior.

Avishai Abrahami: What we're seeing is that people come to the studio and usually play with it. All right, so agencies will come and play with the product. And at a certain point in time, they'll take a project that they just got, so it's mostly a new project. So we have to wait until they have a new project, and then they'll implement that first project on WixStudio. And this is the most critical time, of course.

Avishai Abrahami: If they are happy with it and the customer is happy with it, there's a very high chance to come again, when again, to get the next project to do it again on Studio. The rate of projects is not depending so much on Studio, right, because it's on the quad of the which Studio is mostly depending on how many customers they have, right. And this can be a big agency that only do a few websites every year, or it can be a freelancer who do a few websites every year, or it can be the agency that tends doing a dozen websites every week.

Avishai Abrahami: If they are happy with it, and the customer is happy with it, there is a very high chance that they will come again, when again, to get the next project, to do it again on studio. The rate of projects is not depending so much on the studio, right, because it's the quality of the Wix studio. It's mostly depending on how many customers they have, right? And this can be a big agency that only does a few websites every year, or it can be a freelancer who does a few websites every year, or it could be an agency that does a dozen websites every week.

Avishai Abrahami: So we have a variety of them, and I think the exciting thing about studio is that we're seeing all of them using studio, and if you look at the statistics, it seems that all of them will more likely come back to studio to build a second project than only one. So we are very excited about that. It's a very strong signal that customers, that agencies like this product, and if you have the chance to see it, and the community chats about it, I think it's also obvious there.

Avishai Abrahami: So we have a variety of them, and I think the exciting thing about Studio is that we're seeing all of them using Studio. And if you look at the statistics, it seems that all of them will more likely come back to Studio to build the second project than only one. So we are very excited about that. It's a very strong signal that the customers, that the agency is likely this product and if you have the chance to see. The community chat about it; I think it's also obvious there.

Lior: In terms of modeling it, I think that there is like a very interesting... phenomenon that we see.

Lior: In terms of modeling it, I think that there is like a very two interesting phenomenon that we see. So the first thing is obviously around the existing partners, keep on building and using Wix for more and more of their projects. Now the question is how much is going to grow and how many projects each and everyone of them are using, and this is something that we are keep learning, but it's quite big. You know Avishai mentioned before that they are building the second, the third, the fourth, the fifth, the tenth website on Wix, and this is really amazing.

Lior: So the first thing is obviously around the existing partners, who keep on building and using Wix for more and more of their projects. Now the question is how much it's going to grow and how many projects each and every one of them is using, and this is something that we'll keep learning, but it's quite big. You know, Avishai mentioned before that they are building the second, the third, the fourth, the fifth, the tenth websites on Wix, and this is really amazing.

Lior: I can tell you that it is much more than what I anticipated in my model at the very, very beginning when we started. Second, obviously, is about the newcomers and what kind of agencies, and what kind of business solutions they are using. So we have, you know, the first results that we see right now, for example, in the second quarter. One of the reasons why you see the acceleration of 10% to 15% of bookings in the second quarter is because of that.

Lior: I can tell you that it is much more than what I anticipated in my model at the very, very beginning when we started. Second obviously is about the newcomers and what kind of agencies, what kind of business solution they are using. So we have like, you know, the first resource that we see right now, for example, in the second quarter. One of the reasons why you see the acceleration of 10% to 15% of booking in the second quarter is because of that. It's still moderate; it's not huge, but we are not talking about 100,000 dollars or obviously it's millions of dollars.

Speaker Change: You know the first resource that we see right now for example in the second quarter.

Speaker Change: One of the reasons.

Speaker Change: Why you see the acceleration of 10% to 15% of bookings.

Speaker Change: In the second quarter is because of that.

Lior: It's still moderate, it's not huge, but we're not talking about hundreds of thousands of dollars; obviously, it's millions of dollars. Yes, I do believe that in 2025, the growth of revenue with regard to studios will be much more significant.

Speaker Change: It's still moderate it's not huge but we're not talking about hundreds of thousands of dollars of obviously, it's millions of dollars, yes, I do believe that in 2025.

Lior: Yes, I do believe that in 2025, the growth of revenue with regard to studio will be much more significant. Very helpful.

Speaker Change: The growth of revenue.

Speaker Change: With regard to with regard to studio will be much more significant.

Josh Beck: Very helpful. Thanks, Gene.

Operator: And this concludes today's question-and-answer session.

Speaker Change: Very helpful. Thank you.

Operator: And this concludes today's question and answer session. I would like to turn the call back to the company for closing comments.

Speaker Change: And this concludes today's question and answer session I would like to turn the call back to the company for closing comments.

Emily Liu: I would like to turn the call back to the company for closing comments. Thanks everyone for joining us today. We'll see you on the next one. Bye. Thank you.

Unknown Executive: Thanks, everyone, for joining us today. We'll see you on the next one. Bye.

Speaker Change: Thanks, everyone for joining us today I will say you on the next one.

Speaker Change: Thank you.

Operator: Thank you for your participation in today's conference. This does conclude the program.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Operator: You may now disconnect. Thank you.

Speaker Change: [music].