Wix turned in solid Q1 2020 earning numbers this week. But what is getting the most attention is April data showing a big jump in the company’s subscriptions and other key user metrics.
Wix added 3.2 million registered users in April, a 63% year-on-year increase. This was an all-time monthly high for the company. Wix’s net premium subscription additions were up 207% in April, year over year.
Localogy has similarly seen small businesses increase investment in technology that supports a new way of doing business. We shared some of the findings from our most recent wave of Modern Commerce Monitor™ research yesterday on a Localogy webinar. One example is the increased adoption of fintech applications since the pandemic struck. This reflects the sudden urgency of e-commerce web presence and online payment acceptance.
SMBs Reevaluating How they Operate
Wix’s CEO says the pandemic caused the April jump. Some businesses moving online out of necessity as lockdowns have forced many local brick and mortar businesses to go virtual. He also observes that what happened in April accelerated a long-term trend of SMBs conducting more business online.
I think the understanding of how important it is to have your business on the Internet [has] dramatically grown, and but I think that if you look [at] the long-term, I think that this effect is probably a lot more fundamental,” said Co-founder and CEO Avishai Abrahami, on the Q1 earnings call. “So many people have been now locked at home for months having a chance to rethink…and in many ways reestablished [their] business and learn about how they can do better by being online.”
Will Wix’s Momentum Continue?
Abrahami told analysts on the earnings call that he expects the April results to carry through May. And perhaps beyond.
“We’ve seen some positive changes and even stronger,” Abrahami said. I think that most of the world is still in the same spot right, where people are still in isolation. So I wouldn’t expect to see any change and I do believe that this change is probably going to take us much farther in May.”
Based on stock performance, Wix has been one of the winners in the “corona economy.” The stock was trading higher following yesterday’s earnings release. Over the past month, through yesterday, Wix’s share price grew by 60%, from 118.41 on April 14 to 189.59 yesterday. Shopify, by comparison, rose by 52% in the same time period.
Doubling Down on Marketing
Based on its recent performance, Wix plans to increase its marketing investment and take full advantage of the current wave.
“The strong performance from recent cohorts, combined with the boost in demand for our platform, has convinced us to double down on what we do best — using the strength of our balance sheet to invest in marketing to grow our business even further. We believe combining this incremental investment with the increasing demand will allow us to make faster headway in capturing more market share,” said Lior Shemesh, CFO of Wix.
Wix has been pushing aggressively into the small business market in recent months, including acquiring competitor Websplanet along the way to strengthen its offering to SMBs. And it has been building out its team to strengthen relationships in the reseller market. Most recently, Wix has hired Danny Hen, formerly of Camilyo, to serve as SVP, Strategic Sales — International.