Wix.com Q1 Profit Up, Misses Street; Sees Q2 Revenue Below Market, Backs FY View; To Buy Back Shares

Wix.com reported Q1 net income of $33.77 million, with revenue up 13% to $473.65 million, exceeding analyst expectations; however, adjusted EPS of $1.55 missed the consensus estimate of $1.66. The company's Q2 revenue outlook of $485-$489 million fell short of the $490.13 million expected by analysts, while the FY25 revenue guidance remained unchanged, and the board authorized an additional $200 million share repurchase program.

Analysis

Wix.com Ltd. (WIX) reported mixed first-quarter results, with total revenue growing 13% year-over-year to $473.65 million, exceeding the analyst consensus of $471.94 million. This top-line strength was supported by an 11% increase in Creative Subscriptions revenue to $337.7 million and a more robust 18% rise in Business Solutions revenue to $136.0 million. Net income significantly improved to $33.77 million, or $0.57 per share, from $24 million, or $0.41 per share, in the prior year. However, adjusted earnings per share of $1.55, while up from $1.29 year-over-year, fell short of the $1.66 Street estimate. Total bookings also showed healthy growth, increasing 12% to $510.9 million. For the second quarter, Wix projects total revenue between $485 million and $489 million (11% to 12% YoY growth), which is slightly below the analyst expectation of $490.13 million. Despite the softer near-term outlook, the company maintained its fiscal 2025 revenue forecast of $1.97 billion to $2 billion (12% to 14% growth) and full-year bookings guidance of $2.025 billion to $2.060 billion, attributing a degree of conservatism to macro uncertainty, particularly within its Business Solutions segment, while noting that dissipating FX headwinds could provide an offset. Reinforcing shareholder returns, Wix's Board authorized an additional $200 million for its share repurchase program, bringing the total authorization to $400 million.

Key Decisions for Investors

• Investors should acknowledge the mixed Q1 performance, characterized by a revenue beat and net income growth but an adjusted EPS miss and a Q2 revenue outlook below consensus.
• The maintained fiscal 2025 guidance and the doubling of the share repurchase authorization to $400 million are positive signals, suggesting management's confidence in the longer-term trajectory despite current headwinds.
• Close attention should be paid to the Business Solutions segment's performance and any further commentary on macro sensitivities, as this was highlighted as an area of potential volatility, although offset by dissipating FX headwinds.