- Strong start to the year with all key metrics once again exceeding high end of expectations
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Q1 revenue of $137.8 million, up 49% y/y; under ASC 605, Q1 revenue would have been $134.6 million, an increase of 45% y/y
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Q1 collections of $159.7 million, up 39% y/y
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Record free cash flow of $21.4 million, an increase of 45% y/y, demonstrates increasing leverage in our business model
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Newest Q1 user cohort largest ever – expected to generate over $370 million in collections over the next eight years based on current cohort behavior
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Results driven by continued outperformance of conversion and retention of subscriptions and outstanding marketing execution
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Increasing 2018 outlook to reflect continued confidence in revenue and collections growth and incremental free cash flow generation
Recent Business Highlights
Every 100,000 subscriptions generate over $165 million in collections: We generated a record number of subscriptions in a user cohort in Q1 2018, which is evidence of our ability to continue to drive growth in our business. We currently estimate that the Q1 2018 user cohort will generate over $370 million in future collections over the next eight years at an 80% gross margin with minimal additional marketing investment based on current cohort behavior. This is the result of our improving product offering, driving higher conversion and monetization of our user cohorts.
Wix Code: We continue to improve the capabilities of Wix Code by releasing new features that increase functionality, giving users more power to create advanced websites and applications. Current Wix users who are more technically savvy are increasingly putting Wix Code capabilities to use, and the product is attracting new professional web designers and developers to our platform.
Wix ADI: Wix Artificial Design Intelligence, or Wix ADI, continues to contribute to overall improvements in conversion. The ability for users to produce websites with AI-driven aesthetics and functionality, fully customized to their business within minutes, is increasing the number of sites completed, leading to improving conversion.
Wix Answers: We have continued to roll out Wix Answers, a powerful online customer support platform that lets businesses help their customers across multiple channels. Wix Answers is the platform that currently serves as the support infrastructure for our over 127 million registered users worldwide. Wix Answers can be customized to businesses of all sizes with an intuitive set-up and offers a fully-fledged knowledge base, ticketing system, and call center. It also offers integration with other platforms, actionable insights and an embeddable help widget that can be used with any website. Wix Answers is a great example of the strength of Wix R&D, as a product developed in-house for our own use that is now shared and monetized. This product is available to current Wix users as a customer support solution and is also available to be purchased on a subscription basis by non-Wix users.