WIX's Q1 Earnings Lag, Top Line Up Y/Y on AI Innovation & User Growth

Wix.com Ltd WIX reported non-GAAP earnings per share (EPS) of $1.55 for first-quarter 2025, which missed the Zacks Consensus Estimate of $1.66. The company had reported EPS of $1.29 in the year-ago quarter.

Quarterly revenues increased 13% year over year to $473.7 million, beating the Zacks Consensus Estimate of $471.8 million. The top line exceeded management’s guidance ($469-$473 million), driven by strong performance of the new user cohort and continued healthy engagement from existing users. Wix is focusing on AI to reduce user friction, enhance design quality and speed up time-to-market for customers. The recent launch of Wixel is a primary step in this vision.

At the end of March 31, 2025, registered users were 288 million.

WIX's shares have gained 8.7% compared with the Zacks Computer-IT Services’ growth of 8.1% in the past year.

Quarter in Detail

Creative Subscriptions’ revenues (71.3% of total revenues) increased 11% year over year to $337.7 million. Business Solutions’ revenues (28.7% of total revenues) rose 18% to $136 million.

For the first quarter, Creative Subscriptions' annualized recurring revenues were $1.37 billion, up 10% year over year.

Bookings jumped 12% to $510.9 million year over year. Creative Subscriptions’ bookings increased 10% to $369.5 million and Business Solutions’ bookings rose 15% to $141.4 million. 

Wix.com Ltd. Price, Consensus and EPS Surprise

Wix.com Ltd. price-consensus-eps-surprise-chart | Wix.com Ltd. Quote

Partners’ revenues in the first quarter were $171.6 million, up 24% year over year. The Wix Studio platform, aimed at agencies and professionals, is the key driver with strong adoption and market share gains, aided by Wixel’s potential to further integrate into the workflow of design partners.

Region-wise, North America, Europe, Asia and others, and Latin America contributed 60%, 25%, 11% and 4% to first-quarter 2025 revenues, up 14%,16%,10% and 7% year over year, respectively.

Operating Details

Non-GAAP gross margin was 69% compared with 68% in the prior-year quarter. Creative Subscriptions segment achieved 84% and the Business Solutions segment 31%.

Wix reported a non-GAAP operating income of $99.8 million compared with $69.4 million in the year-ago quarter.

Balance Sheet & Cash Flow

As of March 31, 2025, Wix had cash and cash equivalents of $653.3 million compared with $660.9 million as of Dec 31, 2024.

Cash flow from operations amounted to $145.5 million compared with $113.8 million in the previous year.

Capital expenditures totaled $3.1 million. Free cash flow was $142.4 million.

Wix repurchased $200 million worth of shares in January 2025, acquiring 868,026 shares at an average price of $230.41. To reinforce shareholder value, the board has now authorized an additional $200 million repurchase, bringing the total program to $400 million.

Q2 & 2025 Financial Outlook

Despite macroeconomic uncertainty and foreign exchange fluctuations, Wix has maintained its 2025 guidance. The company continues to expect revenues to grow 12-14% in the range of $1.97-$2 billion. Management reiterated non-GAAP total gross margin at 70% and non-GAAP operating expenses to be 47-48% of 2025 net sales.

Amid strong results and a healthy top of the funnel, Wix reiterated bookings outlook at $2,025–2,060 million (up 11–13% year over year). This cautious approach reflects macro uncertainty in the Business Solutions segment, though easing forex headwinds help balance the risk. It estimates free cash flow for 2025 in the range of $590-$610 million, implying 30-31% of revenues.

For second-quarter 2025, revenues are expected to be between $485 million and $489 million, suggesting 11-12% growth from the prior-year quarter's reported figure.

Its Rule of 45 strategy, which combines revenue growth and free cash flow margin, is expected to be met at the high end of its 2025 outlook.

WIX’s Zacks Rank

Currently, Wix carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies

CDW Corporation CDW reported first-quarter 2025 non-GAAP EPS of $2.15, beating the Zacks Consensus Estimate of $1.96. Also, the bottom line increased approximately 12% year over year.

In the past year, shares of CDW have declined 20.3%.

ServiceNow NOW reported first-quarter 2025 adjusted earnings of $4.04 per share, which beat the Zacks Consensus Estimate by 6.60% and increased 18.5% year over year. NOW’s revenues of $3.09 billion surpassed the consensus mark by 0.18% and increased 18.6% year over year.

Shares of NOW have soared 32.6% in the past year.

Infosys INFY ended fiscal 2025 on a mixed note, with its fourth-quarter earnings surpassing the Zacks Consensus Estimate while revenues fell short of the same. For the quarter, the company reported earnings of 20 cents per share, beating the consensus mark by a penny. However, Infosys’ bottom line registered a year-over-year decline of 15.3%.

In the past year, shares of INFY have gained 5.6%.

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