Remember when it seemed like websites were just a commodity?  Well, it turns out, people care. They want a slick site that does more, from eCommerce to payments to marketing and more.  And SMBs are back in SaaS.  Especially post-Covid.

Wix has benefitted from those trends, not just crossing $1B in ARR, but growing a very impressive 29% year-over-year at $1B in ARR!  And a $15B+ market cap!!  An incredible journey from a fairly simple product at founding in 2006.

5 Interesting Learnings:

1. Existing $1B in Customer ARR is Worth $9.2B Over Next 8 Years.  While Wix’s actual churn is a bit unclear, this is a super interesting presentation of CLTV.  Wix sees its existing $1B of customers generating $9.2B over the next 8 years.  That’s the power of recurring revenue.  Almost $10B of power:

2. eCommerce and Business Tools Are Key Drivers to Accelerating Growth. Not surprisingly, Wix has benefitted from the eCommerce explosion since Covid.  While their core website “Creative Subscriptions” are growing at a still impressive 23% year-over-year, their Business Solutions segment with e-commerce and more are growing 60% year-over-year at $200m in ARR.

To repeat 🙂 … Wix’s e-commerce+ products, its business segment, is growing 60% at $200m ARR.

3.  Efficient at SMB marketing — an ~8 month CAC.  We saw in this series other SMB leaders like GoDaddy and Xero need to get well into Year 2 to go profitable on a new customer, but Wix gets there in just 7-9 months.  Impressive.

4.  43% of Revenue Outside the U.S / North America.  This may be in part due to Wix’s original Israeli roots, but an impressive 43% of revenue is outside the U.S. / North America.  A reminder to really lean in when you find yourself being pulled outside of your core market.  Go where your customers are.

5. 70% Gross Margins — and that’s OK.  But much lower in Payments.  Wix’s overall costs are higher than some SaaS leaders, and its fast-growing Business Solutions segment has only 29% gross margins, due in large part to Wix Payments costs  Wix can get away with lower margins in this segment for now given the 80% margins in websites.  Blended together, margins are still 70%.  But they’ll need to be careful to keep margins at the 60%+ level expected of software companies as Business Solutions revenue grows.

A huge congrats to everyone at Wix.  Quite an incredible SMB success story!

And a few other great ones in this series:

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