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Wix.com (WIX +21%) is trading sharply higher after reporting big EPS upside with its Q1 report this morning. This operator of an online platform to assist customers with building their websites also beat on revs but the upside was more modest.

• WIX described its start in 2024 as fantastic as users increasingly choose Wix as the go-to platform to achieve their goals online. While the Q1 upside was impressive, probably the biggest concern was Q2 revenue guidance being a bit light of analyst expectations. However, investors seem to be focusing more on its healthy bookings outlook.
• In particular, Wix said its suite of AI-powered products is performing extremely well. Notably, this quarter Wix released its highly anticipated AI Website Builder, its cornerstone AI product. It leveraged 10+ years of web creation expertise and user behavior data to create a conversational AI chat experience. Basically, users describe their intent and goals and Wix's AI technology then creates a professional website with personalized layout, themes, text, images, and e-commerce.
• The AI-built websites are fully optimized with Wix's reliable infrastructure as well as built-in marketing, SEO, CRM, and analytic tools. Wix says there is truly nothing like this on the market. Feedback on the AI Website Builder has been incredible. In just a few short months since launch, hundreds of thousands of sites have already being created using this tool. Then in April, Wix released a suite of AI-powered image enhancement tools.
• In terms of specific metrics, total bookings in Q1 rose 10% yr/yr to $457.3 mln, which was better than expected and above Q4's +6% growth. The strong Q1 bookings caused Wix to raise its bookings, revenue and FCF outlook for the year. A tailwind to bookings has been better than expected dynamics around its Q1 price increase as retention of existing users has been higher than expected.
• Bookings growth is now expected to accelerate to 16% yr/yr in 2H, driven by accelerating growth in both its Self Creators (propelled by AI products driving higher conversion) and Partners businesses, as a result of Studio ramping and contributing more meaningfully through the year than initially planned. This improved bookings trend is expected to translate into strong revenue growth acceleration in 2025.

Overall, investors like what they see with Wix's Q1 report. The Q1 upside was nice to see, but the bookings number and guidance are what really stands out to us. Specifically, investors are focusing on the bookings acceleration expected in 2H24. Wix is very excited about its AI Website Builder and how it can help customers build websites using AI chat. The bookings guidance raise is good evidence of management's confidence in this new product.