Wix continued to drive key metrics that indicate digital presence is a good business to be in during a pandemic.
During Q2 2020, Wix added 9.3 million new registered users, an indication that small businesses and solopreneurs are looking to enhances their online presence, or create a presence for the first time. By comparison, in Q1 Wix added 3.2 million new registered users.
The company grew its revenues by 27% in Q2 to $236.1 million. This was also an improvement over Q1, when Wix grew its revenues year over year by 24%.
Bad Times, Good Times
Wix’s CEO acknowledged the pandemic’s impact on results in the Q2 earnings release.
“The trends that began in late March continued throughout the second quarter, driving record-setting results,” said Avishai Abrahami, Co-founder and CEO of Wix. “The need for business owners to move online quickly, communicate with customers, and deliver goods and services has never been more imminent, and the Wix platform continues to provide millions of users with the ability to thrive during these unprecedented times.”
However, Wix reported a net loss per share of 0.26. This compares negatively to analyst expectations of a 0.23 less per share. This may explain why Wix’s share price was moving down on Thursday. Since the beginning of the year, Wix’s stock has gained more than 150%.
Another key Wix metric trending positively is net premium subscriptions. The company added 346,000 of these premiums accounts in Q2. And net premium subscription revenue grew by 21% to $190.7 million.
Unlike some brands that have retrenched on marketing and advertising during the pandemic, Wix is doubling down. The company reports it increased its advertising investment by 90% during Q2. The company says the investment has paid off.
From the earnings release:
“During Q2, we increased advertising investment by approximately 90% y/y, and we acquired the largest user cohort in our history, which we expect will return future collections that are approximately 90% higher than the previous year’s Q2 cohort. This return supports our decision to be more aggressive with our marketing investment. We plan to continue the increased investment in advertising as long as positive returns continue.”
Other Q2 Milestones
Wix noted several developments in its business during the past quarter, some of which Localogy Inside has reported on.
For example, in June Wix launched an extended eCommerce solution. This gave merchants access to a wide range of online business tools, including dropshipping, automated sales tax calculations, streamlined order and fulfillment, and integrated sales channels, including social media and marketplaces.
Wix also moved its new site builder platform for agencies and designers, Editor X, from beta to full launch.
GoDaddy Posts Record Customer Growth
In a related result, GoDaddy also posted its Q2 numbers, adding more evidence that the website builder space is thriving in the pandemic. The company generated $806.4 million in revenues for the quarter, a 9.4% increase. And it added 400,000 new customers, passing 20 million in total customers. The company cited its Websites + Marketing site builder product as a standout for the quarter, noting that its commerce tier grew by 60%. The latter point is yet another signal that small businesses were scrambling to add eCommerce capabilities during lockdowns and phased re-openings.