Wix Analysts Stay Bullish Despite EPS Miss, Citing Strong Product Pipeline And Second-Half Growth Plans

Wix.com (WIX) reported Q1 revenue slightly above estimates at $473.7 million, a 13% increase year-over-year, but missed on adjusted EPS, reporting $1.55 versus the consensus of $1.60. The company reiterated its fiscal year 2025 revenue outlook of $1.97 billion to $2 billion. Analysts remain generally positive, citing strong user trends, AI product rollouts, and solid free cash flow, though some lowered price targets due to a deceleration in Partner revenue growth and a conservative outlook for Q2.

Analysis

Wix.com reported mixed first-quarter 2025 results, with revenue growing 13% year-over-year to $473.7 million, slightly exceeding analyst consensus of $472.9 million, while adjusted EPS of $1.55 missed the $1.60 estimate. The company reiterated its fiscal 2025 revenue outlook of $1.97 billion to $2 billion, which, despite being consistent, implies a significant growth acceleration in the second half of the year and falls slightly below the $2.02 billion analyst consensus. A notable strength was the robust free cash flow, which reached $142.4 million, representing a 30% margin and surpassing Street estimates by 4-5%. However, performance across segments was varied: Creative Subscriptions grew 11% to $337.7 million, with Self-Creator revenue showing accelerated growth of 7.3% to $302.0 million. In contrast, Business Solutions growth decelerated to 17.7% year-over-year, and the crucial Partners revenue segment, a key driver accounting for approximately 50% of Gross Payment Volume (GPV), saw its growth slow by 5 percentage points to 24% year-over-year, impacted by foreign exchange headwinds and moderating GPV. Analysts generally maintained positive ratings, though Piper Sandler adjusted its price target downward to $225 from $262. The second-quarter revenue guidance indicates a near-term deceleration or came in 1% below consensus, heightening reliance on second-half performance to meet full-year targets. Nevertheless, optimism is supported by strong underlying cohort trends, a 7% year-over-year increase in new users, ongoing advancements in AI product offerings such as Wixel and AI Site Chat, and continued share buybacks, which analysts anticipate could drive sustained free cash flow upside despite conservative macro assumptions.

Key Decisions for Investors

• Investors should closely monitor Partner revenue trends and the broader Business Solutions segment performance in subsequent quarters, given the observed deceleration and its historical importance as a growth engine for Wix.
• The reiterated full-year 2025 guidance, contingent on a significant second-half acceleration, requires investors to track execution closely, especially the contribution from new AI products and sustained cohort strength against a backdrop of stated macro conservatism.
• While robust free cash flow generation ($142.4 million in Q1) and an active share repurchase program offer support, these positives should be weighed against the cautious Q2 revenue outlook, the Q1 EPS miss, and the inherent risks associated with a back-loaded annual performance.