Company nearly doubles its marketing spend as businesses move online.
Website builder Wix (NASDAQ: WIX) reported second quarter earnings today, setting records thanks to the pandemic-induced rush to get online.
The company reported a remarkable 64% year-over-year increase in sign-ups with 9.3 million. Most of the new registrations use the free service or don’t convert, but the company grew its paid userbase to over 5 million by adding a net 346,000 subscribers during the quarter. That’s about double the number it added in the first quarter.
Collections—which other companies called bookings—were up 35% year-over-year.
“The need for business owners to move online quickly, communicate with customers, and deliver goods and services has never been more imminent,” said Wix CEO Avishai Abrahami.
Wix nearly doubled its advertising spend to take advantage of the situation. It plans to continue with elevated ad spend as long as it converts. This will suppress free cash flow but should pay long-term dividends.