Website builder and ecommerce platform Wix has released its Q2 2023 financial results, reporting a net income of $33.6 million for the quarter.
Wix announced that its total revenue for the second quarter of 2023 was $390 million, an increase of 13% on 2022’s $354 million.
Wix’s gross profit for the second quarter of 2023 was $262 million, an increase of 20% over the same period in 2022.
During the second quarter of 2023, revenue from Wix’s ‘Creative Subscriptions’ and ‘Business’ Solutions’ grew for the third successive quarter. ‘Creative Subscriptions’ revenue for Q2 2023 was $287.1 million, up 11% year-over-year, while ‘Business Solutions’ revenue was $102 million, up 18% year-over-year.
Wix’s total operating expenses were $249 million in Q2 2023, down 13% compared with $285 million for the second quarter of last year.
Wix’s GAAP net income in the second quarter of 2023 was $33.6 million, or $0.59 per basic share or $0.56 per diluted share.
Positive GAAP operating income for Q2 2023 was $13.0 million, equating to 3% of Wix’s revenue during the quarter. This is the first time Wix has achieved a positive GAAP operating income during its 17 year history.
‘Wix Partners‘ revenue was reported as $115.2 million, up 36% year-over-year. This revenue is generated through agencies and freelancers that build Wix sites for other users and also apps that they make to be sold through Wix’s App Marketplace.
Wix’s free cash flow for Q2 2023 was reported as $32 million, more than double Wix’s free cash flow in the same period of last year.
Wix reported a 14% decrease in employee numbers, with an end-of quarter headcount of 5,036 in total.
Speaking on Wix’s Q2 earnings call with investors, Lior Shemesh, Wix’s Chief Financial Officer said, “we continue to make progress in the disciplined execution of our profitable growth strategy in Q2 with growth and profitability accelerating for another consecutive quarter. Continuing to meaningfully expand margin will ultimately drive us to reach the Rule of 40 in 2025 under a variety of scenarios.”
(The ‘Rule of 40‘ is a popular metric used by private equity investors to value the performance of SaaS companies. It involves adding a company’s growth rate to its free cash rate to calculate the company’s score. According to McKinsey & Company, less than one third of SaaS companies ever achieve a 40% or higher score.)
Wix’s Q2 financial results announcement comes just a few days after the company launched its new ‘Wix Studio’ platform for agencies and developers. The company also recently announced that it would be rolling out a full suite of new AI tools to all Wix users in the coming months.