Ladies and gentlemen, thank you for standing by, and welcome to the Wix Q3 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask your question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker for today, Maggie O'Donnell, the Director of Investor Relations. Please go ahead.
Great. Thanks, Jay. Good morning, everyone, and welcome to Wix's third quarter 2021 earnings call. Joining me today to discuss our results are Avishai Abrahami, our CEO and Co-Founder; Nir Zohar, our President and COO; and Lior Shemesh, our CFO. We also have Joe Pollaro, our GM of the U.S., who is gonna moderate a Q&A. During this call, we may make forward-looking statements, and these statements are based on current expectations and assumptions. Please consider the risk factors included in our press release and most recent Form 20-F that could cause our actual results to differ materially from these forward-looking statements. We do not undertake any obligation to update these forward-looking statements. In addition, we will comment on non-GAAP financial results and key operating metrics.
You can find all reconciliations between our GAAP and non-GAAP results in the earnings materials and our interactive analyst center on the investor relations section of our website, investors.wix.com. With that, I will now turn the call over to Joe, who will be moderating a Q&A with the team.
Thanks, Maggie. We got some good feedback that this format is a good way to conduct our earnings call, so we're gonna do it again this quarter. Thanks again everyone for joining. Avishai, let's start about Q3. We beat our expectations, which is great. Talk a little bit about what we're seeing right now in the economic environment.
Of course. Hi, everybody. Thank you for joining us. If we look at this year, right, we saw in the summer that it was continuously declining. Since then, we're now seeing that there is a recovery, right? Apparently, the uncertainty and the slowdown is kind of like in some places bouncing up and because of that, right, we believe there is some recovery in the economy. I think this is a very global phenomenon, and of course, it's influenced by COVID, where we see more COVID and less COVID. For us, what it means is that nearly every area of our business outperformed our expectation in Q3. As a result, we're increasing our outlook for the year. Growth is better than we thought last time we spoke.
Great. That's great news. Let's dive in a little bit more on our results. You said nearly every area of our business outperformed. What specifically drove the results in Q3?
Well, first of all, we have more new users than we believed. Conversion is still very strong and better than expected. Renewals continue to beat our expectations. Average collection per subscription continued to increase. Wix Payments doing very well, and we believe we are in line with our targets of $10 billion GPV this year, which is 85% year-over-year growth.
That's great. Obviously, you know, you look much further ahead in the business obviously than just a quarter here. What are you seeing in the business beyond these results that are exciting for you right now?
I think that the most interesting for me is that, you know, obviously there is the slowdown of economy and we all know that COVID has a massive impact, like, globally. If you look at the underlying, right, leading indicators for what makes Wix work, then I'm very excited. One of the first signals for me is that designers and agency on Wix has grown 92% year-over-year, which is amazing, right? This is one of the things that it not just shows the strength of our product, it also will generate compound growth because those people, right, those companies tend to build more than one website. By adding them at that quick rate, we obviously going to get compounding growth in the next couple years. Performance improvement for our the website you build with Wix has continued to improve.
Today, according to Google, Wix is the fastest among all of our competitors. That's really important, right, for our customers and especially to the professional customers that we have. Customer care, big improvement. Of course, COVID, when we had so much demand, made it go to a very hard place for us. We're fully recovered. The metrics that you use to measure that grew by 118% year-over-year, which is again, fantastic. Wix Payments, again, 85% growth year-over-year. Commerce. We have a lot of product development there. Even though a lot of them are still influenced, heavily influenced by COVID, right, we're still growing 47% year-over-year. And that's amazing, right?
You have to remember, our commerce is so much more than just a shopping cart, right? It's scheduling, it's events, tickets. It's a lot of things that are still very influenced by COVID, and even so, 47% year-over-year. Of course, business to business partnership, right, which is a way for us to, in most cases, to acquire very large agencies that do marketing for Wix, build websites for their customers. It is growing in a crazy rate, like 9x year-over-year. So all those things together, right? If you look at them, they are the leading indicator of how good our business is gonna be doing in the next year, the year after that and the year following that. I think all of them are going super fast and it makes me really excited about where we are. I would say that probably we're coming out of COVID. Stronger than we ever been since the IPO.
That's great. Let's dig into each of these areas. You mentioned several kind of things. I wanna start with B2B partnerships. Nir, let's go to you. Why is B2B partnerships such a exciting opportunity?
Well, I think, you know, I think it's something that evolved and grew very fast from an initiative of 2019, where we just had one singular deal made with one partner. We grew it into something which is significant and sustainable and a real influence on our business in 2021. In essence, as Avishai said, it's the continuation of the partners and agents we've touched, just really massive ones that are joining us and working with us.
I also think that it's a fantastic signal when really big companies say to us, "We wanna adopt your technology in order to cater to the needs of our customers." It's a great testament for our brand and obviously for the maturity of our product. Lastly, I think for us, it's another fantastic go-to-market strategy when we are basically taking the same product, the same innovation that we have and adding it across the board in another new channels of new users.
That specifically has been an area that, you know, has been getting many questions, is around kind of the business model here. Like, you know, how is the business model the same as what we're already doing elsewhere?
Well, I think, you know, the unit economics are pretty much the same. In this case, the partner is the one who's spending the marketing dollar instead of us. We provide the product without any additional costs for us in terms of care or development or hosting or anything like that. When you think about it then behaves very much like our regular course because, you know, there are gonna be adoption and activation of subscriptions, and then renewals over time, actually expansion with more people using business solutions and adding Ascend and using Wix Payments and generating GPV, et cetera. In that aspect, it behaves like any other recurring subscription business in other parts of our business. It stacks over time.
Just as an example, if we take that main, that major partner we had in 2019 and see how it evolved over time, if you look at the last 12 months, that deal generated 9x revenue than what it generated the 12 months before that, but just because of that compounding effect. It's exactly like a cohort.
Great. Another area that Avishai touched on is commerce. Commerce showed strong growth. It's obviously becoming a larger portion of our business. Talk about our progress there.
Yeah. I think, you know, we really highlighted that last year, I think 2021, was a great expansion year in that aspect. It was expansion of payments. It was expansion of the different business verticals that Avishai just mentioned. Obviously, as you said, it's very diversified, so we have the stores and products, but we're also selling services in restaurants and events and hospitality and so on and so on. For that reason, it keeps on paying off where there's, you know, 47% year-over-year growth. The $10 billion GPV mark that we believe we're on track to hit by the end of the year. We're extremely excited about it.
Great. Just to kind of you know touch on one thing specifically around the e-commerce strategy, Avishai, we announced last week Wix Fit. Talk about how this fits into our commerce strategy.
Well, we've seen that we're starting to get more and more fitness, say, trainer regimes and we realized that it might be a good thing for us to package that into a coherent offering, right? Because a lot of those guys, they need scheduling, they sell stuff, right? They're a Shopify store. They offer online courses, videos, and we felt that if we turn that into more of a solution which is very well packaged, we might see a really good effect. A big part of the strength of our e-commerce is that we didn't have to develop that from scratch, right? We just have to use the components that we have and rearrange them and make very clear messaging around it. That's what we did, and we're seeing really good results from that.
Great. Just, you know, another area that you touched on, Avishai, agencies and partners. Provide us an update on where we are with that initiative. Obviously, we saw growth, so share a little more.
Yes. Well, we did grow, right? 92% year-over-year. A large part of it, I think, can be contributed to the improvements in product, right? Of course, we have the agents that help them and account managers supporting them. Wix, their Wix Editor and Editor X have a really strong value proposition for agencies. I think that's a big part of what you know. Another part, right, is that the combination of those tools create so much better productivity for our customers. I think that is why they're doing so well, and again, telling their friends, which is a big contributor to the growth here. If we look at all of those, the security, the performance, right?
The different editors that you can use, we are seeing clear indication that we are rapidly gaining market share, mostly from WordPress.org. We're very excited about that. I mean, we think that this is really one of the best leading indicator for Wix's future.
That's great. One other area that I know before we get to Lior, Nir, that a lot of investors have been thinking about lately is around marketing. There have been a lot of changes in the online marketing landscape. How have we managed through that?
Well, you know, in all honesty, we haven't really been impacted by that. You know, we know how to shift to the places where our ROI works best, and this is the formula by which we invest our marketing dollars. In fact, with the increases in conversion and the higher collection per sub, we actually managed to spend more on the same marginal ROI, which is great. I got to tell you know, for a decade of Wix running at kind of massive growth rates and investing a lot of marketing to support that, we've gone through big changes in marketing almost every year.
You know, to name a few, the rise of Facebook advertising, our move in and then out of TV because it stopped being interesting enough, the rise of YouTube advertising. I think the great thing working for us is that we have an extremely talented and strong marketing team that is actually not only ready for those kind of changes. I think they actually excel especially with those challenges. You know.
Great. All right, let's move on to the financials. Lior, dive a little bit more into the outperformance on collections and revenue and specifically touch on why we beat the collections guidance much more than the revenue.
Thank you everyone for joining us today. Obviously we're really happy with the results. I think that it's displayed the improvement in the business environment, as Avishai mentioned before. Actually the subscription revenue, they both exceeded our expectations mainly for two reasons. The first one is better than expected subscriptions than what we initially anticipated back in August. We see that the demand was stronger, conversion and output was actually higher than our own expectations. Also, we saw that conversion actually was better in many places. I think that Avishai mentioned before, like for example, with Wix Fit and the increase in the number of agencies, 92% on a year-over-year basis.
Obviously that one has also contribution to the fact that we managed to beat our own expectations. This portion is mainly also affect the revenue. In addition to that, the reason why we beat collection more than revenue was mostly because of better than expected B2B partnership in Q3. Actually, one of the deals was supposed to close in Q4 but was done in the first quarter. Again, B2B partnerships mostly affect collection on the short term, the revenue following that in the next few years.
Okay, great. Let's talk about gross margins. When should we expect gross margins to start to stabilize?
I think that first of all, as always, I want to relate to that into separate things. The first one is about the creative subscription gross margin. They are stabilizing. They have been 77% for the last three quarters. Actually, we expected for the year to close at 76%-77%, and I think that we are even a bit better than that. We do expect improvement next year for the gross margin of creative subscription, as we mentioned before. I believe that the gross margin for the creative subscription is something that was done because of mainly two reasons. The first one is about increasing the investment in performance.
We saw Avishai talk about the increase, the fact that the Wix platform is the fastest one in the world right now. This is something that it's really amazing. This is something that we already started to see the contribution of it, because in the end of the day, it contribute to the conversion, it contribute to many, many things. We are going to see the fruits of it in very, very soon. The other thing that where we invested was about the care, and we mentioned that many times before. Again, we saw a clear indication of the improvements, as we mentioned before. With regard to the gross margin of the business solution, it's mainly impact by the Wix Payments. Again, I do expect that Wix Payments gross margin will improve next year.
It is very much in line, the overall business solution growth margin, what we said is around 22%. We do expect to have improvement in margin specifically for payments.
Got it. Let's move on to talk about guidance. Let's talk about starting with collections here. We gave guidance last quarter and said that most of the uncertainty we were seeing was in Q4, so now we're here obviously. How has that changed since we gave guidance in August?
Actually, it has changed in mostly two aspects. First of all, just to remind everyone, the ranges we provided last quarter was a true range of outcomes. Meaning that if things got even worse, we'll obviously be heading towards the low end, and if things get much better, it would head toward the high end. What happened lately, and you know, we mentioned before about the improvements of what we see right now with regard to the demand, with regard to the overall economic environment. Based on that and based on the results of Q3, we actually updated the guidance, but we are using the same methods. We see the improvements and trends are definitely better than last quarter.
Therefore, the right way to look at it is that we are raising the midpoint of the full year by almost $10 million. We are also raising the high end of the guidance that we provided before, but still keeping a very wide range of Q4 in order to reflect the volatility that still exists, but less than what we've seen before.
Okay. Just to be very clear on what you just described. You mentioned earlier around B2B partnerships and a deal that moved from Q4 to Q3, so explain how this affects the guidance that we gave.
In the third quarter, we recorded the collection for Vistaprint. We mentioned that last quarter as expected, but we had also some more deals that we signed in the third quarter and were recorded as part of our collection. One of them was a deal that was originally expected in Q4, but was signed during the third quarter. Yeah, I think that was you know the reasons for that.
Okay, great. Let's move on and just hit on free cash flow. Talk a little bit about what we're doing on the marketing side, and the impact on free cash flow.
As always, when we see a better demand for our product, it's followed by increasing the investment in marketing. Actually it's a really good sign for that. This is exactly what we did this quarter. Most of the reason why we decreased the guidance for the free cash flow was because of further investment in marketing, and this is something that obviously we are always happy to do, very important to say, but still within our ROI. In addition to that, we had an impact of a few millions of dollar because of the strength of the Israeli shekel compared to the dollar. As you probably know, about half of our employees are paid in Israeli shekels, so obviously it has an impact.
Got it. Okay. Great. Just before we go over to the phone and take questions, I wanna end with Avishai. Obviously, you know, we're coming up on the end of the year. A lot of investors are thinking about 2022. I know we are as well. Share a little bit about how, you know, we're thinking about 2022 and even beyond.
Of course. Well, of course, it's also a bit too early to provide guidance, right, for 2022. However, if you look at all of our signals, right, agencies are growing super fast. Commerce is growing extremely fast. B2B partnerships are growing very fast and are really exciting, right? We're continuously taking bigger and bigger market share, right? Yes, there is uncertainty about the economy. There is uncertainty about how people should behave in this kind of time, but this is temporary. Now, it's very hard to predict how long it will last, but obviously, it will not be forever. I think that even now, we're in a stronger product position, right, than we've ever been in the history of the company, right?
The gap between us and competitors is so big today that it really is incredible, and you can see a lot of the results even today. I'm very excited about what we can do in 2022. The other thing I can say is that we have some really cool product coming soon. I'm really, I can't wait to share with you about those products. Overall, very excited.
Great. Thank you all. Operator, I think we are ready to turn the call over to some analyst questions.
Thank you. As a reminder, if you would like to ask a question, please press star then the number one on your telephone keypad. Our first question comes from the line of Sterling Auty of JP Morgan. Your line is open.
Yeah, thanks. Hi, guys. I wanna dive into the B2B partnerships. You know, inserting a partner into the chain between you and the customer, I think has a perception of, do you lose any type of control? And what I mean by that is, how do you drive conversion through a B2B partner, as well as what you would drive it when normally just going directly to that customer in your typical go-to-market motion?
Well, Sterling, it's a really good question, and I think the answer is that it depends on the partnership, right? In some of the partnership, we are the face in front of the customer. In some other, Vistaprint is an example or NTT is another one, they are the face in front of the customer, right? Usually, they actually build the website for the customer. We still have the ability to communicate with the customer in a direct manner because it's not hidden. It's not like it's not a white label partnership. They're building it on the Wix platform. But I think in many ways, those kind of partnership behave like any other agency, where the agency bring the customer, build it on Wix, and they are responsible for managing the relationship with the customer. We are usually doing a lot of the communication through the agency, right? Through NTT, through Vistaprint, or through a small agency.
That makes sense. One actually follow up administratively. I didn't get through all the letter and presentation, but are we gonna get the typical Wix December event? Are we gonna do it in person? What should we expect out of that event if we're gonna do it?
Sterling, this is Joe. I will preempt anyone from saying anything and just say, stay tuned.
Obviously face-to-face is gonna be very hard now. That's the other thing. Face-to-face is very hard. You all were very close on the date of something that we wanted to release. Now we're gonna have to sync with COVID of course and see when we're doing it.
All right, sounds good. Thank you, guys.
Thank you. Next question comes from the line of Ken Wong of Guggenheim Securities. Your line is open.
Fantastic. Thank you for taking my question. The first one, just as we touch on 2022, I know we're not quite ready to give guidance yet, but kinda given all the movements from last quarter to this quarter, should we still think that the trajectory of this business is gonna look, you know, better than what we were seeing in 2019 pre-COVID? Any initial thoughts on how investors should think about the growth profile?
Hi, Ken, this is Lior. Again, I think that there is a lot of interesting stuff going on, and I think that Avishai mentioned before that we're actually exiting the COVID in a position that was never been the same. I think that it's amazing. We talk about, you know, the variety of our products, agencies, commerce, the B2B, payments. All of it is obviously a very good sign, and we are very excited about it. I think that it's too soon to talk about, you know, what to expect from next year. Certainly we have all the tools in order to execute, you know, in a really good way.
Got it. Okay. Appreciate it. Fair enough. Just on the B2B side, you guys previously told us, you know, about $70 million in collections for the back half. Any rough sense if that number has moved up, given that it sounds like there's a lot more activity there? Just on the pull forward from Q4 to Q3 and any rough quantification of the impact in the quarter.
With regard to the first question about the $70 million, we are about the same. What was the question about the fourth quarter? The full forward?
Yeah, just any quantification.
Yes. Yes, it's about $4 million.
Okay, great. Thank you very much, guys.
Thank you.
Thank you. Next question comes from the line of Brent Thill of Jefferies. Your line is open.
Thank you. I was curious, you know, given the rebound and what you're seeing, there have been many questions about how that's trending in October and in November. If you can just directionally give us a sense if the demand trends that you saw closing out the quarter are continuing into this current quarter? A quick follow-up.
The answer is that we continue to see improvement from the summer. However, you know, it's very hard to predict the future because how the world economy behave after COVID, this is the first time. Do we continue to see improvement in the United States, in some places in Europe. Yes, the answer is that we continue to see improvement. Of course, we're not yet back to normal on many things, right? You know, that supply chain issues, we are seeing, of course, everything that has to do with physical and face-to-face meetings or events is influenced. There is a rebound, there is a coming back.
We hope the summer was the bottom, but I think there's still a lot of uncertainty, and we hope that as this uncertainty clears out into 2022, we're gonna continue to see improvements.
Just a quick follow-up on the free cash flow. Certainly understand the reinvest back in the business. But if you look back, this is your lowest free cash flow margin since 2014. I think investors are trying to understand, has something structurally changed in the business that you have to, you know, change actions here, or do you feel like this is just temporary and we should see a resumption to normal trends here going forward on free cash flow?
First of all, you're right about the number where we are actually ending up this year. It's very important to mention the free cash flow in terms of the core business or the traditional core business of Wix has not been changed. It's still strong, very strong as it used to be in the past. Usually when you start a new business, for example, like payments or like the B2B partnerships, you don't see the immediate effect on free cash flow. You are growing the business, you are investing, and then it's followed by the cash. This is something that's very important to mention. For example, we are closing many deals with B2B partnerships. Do we see the cash immediately? The answer is no. Are we going to see this cash? Absolutely, yes.
I think that many of the effects that we see right now are the temporary effects, and we are going to go back actually to the same contribution. Again, very important to mention, on those deals, kind of platform or core business, what we had like many years ago, the profitability in terms of the cash is actually getting better.
Great. Thank you.
Thank you. Next question comes from the line of Nicholas Jones of Citi. Your line is open.
Great. Thanks for taking the questions. I guess just one on kind of the Q4 guide. I mean, how are you thinking about kind of the seasonality heading into Q4? I think we've heard from other kind of, you know, SMB-focused businesses that there's a risk of kind of increased travel, fewer people at their computers and potentially harder to get net adds in Q4. And then I have a follow-up.
Think about historically, right? Q4 was a bit always slower for us in terms of new subs.
Yes.
We of course included that in our projection for Q4. This year it might be different. I don't know. Again, things acted very different this year than, you know, than other years. But if you look at the business of our business, of our customers, right, it's usually been doing much better in Q4, right? Everything that to do with Wix Payments, GPV, transactions of our customers usually tended to do much better in Q4, and I think we're gonna see that again this year. To say what is the magnitude, again, it's the first time we have a year which is post-COVID or half post-COVID or post-COVID in some countries and not in some other countries, or some states and not some other states. It's very hard to predict.
I would say, I think that our customer business is probably gonna do very well in Q4, and due to some recovery, some activity and clearing, and which of course will influence the GPV and Wix Payments and business. On the other hand, what we predicted in terms of slowdown in subs, which is traditional to Q4, I actually believe it's gonna be smaller than other years. I think it's gonna be a higher rate. However, this is my personal belief, and the way we calculate the guidance, we took the same factor that we added historically.
Got it. A follow-up. You mentioned in the letter and on the call earlier about what's been the fastest platform versus peers. You know, how does that benefit manifest? Is this impact retention more, or is this a criteria that, you know, new kind of potential subscribers are looking for when they're choosing a platform?
Well, if you look at the more professional market, right, then obviously they're doing benchmarks, right? They're actually comparing, and they're doing benchmark before they join and of course after they join. This is for the more sophisticated customer and which is pretty much all of those agencies we spoke about and partners and B2B businesses. All of them actually care about that, and I think being number one at that is very significant in the contribution to those growing so quickly on Wix.
Great. Thanks.
Thank you. Next question comes from the line of Trevor Young of Barclays. Your line is open.
Great. Thanks. Two for me, if I may. One, just unpacking the revenue guide for Q4. If we assume kind of steady trends on creative subs, it implies a pretty material decel on business solutions potentially being, you know, up only slightly Q-on-Q in terms of nominal dollars. One, is that the right way to think about it? And two, you know, why would that be the case given, you know, the ramps that you're seeing in payments, and obvious seasonality there? Second question, just can you talk about where we are at payments take rate versus the 1.25%-1.3% guide earlier in the year?
Yeah. First of all, we do expect that Business Solutions is going to be stronger in the fourth quarter. I think that, you know, Avishai mentioned that before, mostly because of payments. You know, it's the holiday season, and this is something that we think that's going to be really positive for us in that regard. The second thing about the take rate, we are on track. Actually, it is something and we thought that it's improving. Indeed, it is improving. This is really exciting. I do believe that this is something that will continue to improve also next year.
Great. Thank you.
Thank you. Next question comes from the line of Mark Mahaney of Evercore ISI. Your line is open.
Thanks. It looks like one of the regions that may have outperformed others was Europe. Any particular color behind that? And then an update, please, on the point of sale solution traction. Thanks.
Of course. Yes, we do think some countries in Europe faster recovery than in other places. I think that Germany and France, we've seen that. We also invested a lot in localization in those countries. As for point of sale, I don't think we wanna go. I'm sorry, you wanna talk about it? Go.
Again, not to take too much of a deep dive on Point of Sale. I can say, though, that we are very involved in our beta phase. I think, you know, early next year we can probably start expanding it. We're extremely happy with the results so far. Both the reception as well as the usage and the volumes that we've seen on the Point of Sale have far exceeded our expectations, so we're very excited about it.
Thank you, Avishai. Thank you, Nir.
Thank you. Next question comes from the line of Bernie McTernan of Needham & Company. Your line is open.
Great. Thanks for taking the question. Just one for me. Just in the shareholder letter, you discussed increased sales and marketing expense in fourth quarter. Just wondering how long that takes to really come through and help the top of funnel?
We always spend marketing according to our predicted time to return the cash back period of about 8-10 months. Normally, within 10 months, we will get back all the money we spent on marketing from those customers. That's good.
Understood. Thank you.
Thank you. Next question comes from the line of Matt Pfau of William Blair. The line is open.
Hey, guys. Thanks for taking my question. Just wanted to ask one on the commerce component. You do have a mix of different businesses within that group. I was wondering if you could provide some more detail in terms of what you're seeing with maybe, you know, product-based e-commerce businesses versus some of the more service or content-related businesses. You kind of alluded there's a group within there that's, you know, still being significantly impacted by COVID. Would you expect to see some material acceleration within that group once we come out of this? Thanks.
Hey, sure, Matt. Again, about commerce, obviously, we're not gonna break down each and every type of business and the percentage. We can say that we're seeing an ongoing growth of the portion of the non-products share of the commerce. It doesn't mean that the products are slowing down. It actually means that just the services part is growing faster. Today it's almost 50/50 on our platform between the product and the services, which, again, we think is great since we have that wide diversity of e-commerce usage.
I think that, right, this is one of the reasons that we expect to see even bigger growth when we're coming out of COVID, right? Because a lot of the services or things that require face-to-face meeting or conferences or all of those things are so much less now. If you think about, right, we're a global business. We have places that are still very heavily affected by COVID, like Latin America and some countries in Europe. We really believe that when we come out of COVID, those will have an additional boost into growth. Even that our commerce today is growing at 47% year-over-year, if there would be no COVID, we'd probably be growing much faster than that.
Great. Thanks, guys. Appreciate it.
Thank you. Next question comes from the line of Ygal Arounian of Wedbush Securities. Your line is open.
Hey, guys. A lot of focus on the B2B side and agencies and the strength we're seeing there. What a lot of investors have tried to do with us, especially since you gave that $70 million number last quarter, you know, kind of strip that out and try to get a good sense of what the DIY side or the direct-to-consumer side of the business has been doing. Could we dive into that for a little bit, what you're seeing there, you know, if that's rebounding similar levels to across the board and just in general what you're seeing from DIY?
I'm not sure I understand.
I'm not sure I understand the question.
I'll try to rephrase.
You're talking about the B2B businesses, partnerships?
Yes. I'm trying to understand how.
Right. Okay, we've been talking B2B, a lot of strength in B2B, a lot of strength from agencies, right? Those that are building sites for others, or coming through the B2B channel. How are trends in the DIY side of the business?
It's still going very well. I think that maybe one of the misconception that is happening is that we always had agencies, right? We always had partners. We always had big partners, right? We broke out the first one, NTT Docomo, with the Japanese company, right? We broke it, I think, 2018, and we spoke about it. We always had those, so they've always been part of our growth, right? A lot of them are really organic. When you look at our customer base, I think that, yes, the agencies and partners part of Wix is growing, but everything is growing. I'm not sure you should break it out.
Okay. That's actually really helpful. A lot of investors have been thinking along those lines, and then
But this is.
Yeah, go ahead.
Maybe this one is on us, right? Maybe because when we broke it out, we didn't provide enough color. Really, there's nothing new there, right? This is the same thing we always had. Okay. Yes, we never had something in the size of the Vistaprint specific deal, but we have a lot of those, right? We have a lot of partnerships in the past that were very similar to that, and they've been working for us. Of course, like everything else that is working for us, you know, we invested there. I think Vistaprint is a signal saying that, hey, you know, even companies that used to be competitors of Wix are joining. This consolidation now that is happening around our product, which is a very good sign.
However, in the past, this used to always happen, right, with smaller companies and bigger and bigger companies. We are up to a place we felt it's really what we should do is figure it out.
That's really helpful. Then on the agency side, just to clarify, when you say 92% growth there, you're specifically talking about agencies, so that is ex B2B. Then you noted a bunch of the products that are, you know, helping support the growth there. You've highlighted in the past some specific numbers around Editor X and uptake there. Anything you could share on Editor X and the growth you're seeing around that? Thanks.
Yeah, of course. I think that, we're very happy with Editor X, and there are two reasons why. In itself, it's growing fantastically, fast. We think that, it really shows that the market needed a product like that. It's the only thing where you can actually design, easily design what the industry is calling responsive design. We can build different design to every different resolution that actually knows how to dynamically move. But it also is its own CMS, its own programming language, databases, and of course, all of the business stack that Wix has. That way, there's nothing else similar to that. This is contributing to a really fast growth.
The other side of it is that Editor X, because it's becoming a brand and so many agencies are trying that, it also tends to attract new partners to Wix. A lot of them will not use Editor X for all their projects, right? They will use it for their big projects or the special project, but they will use the classic Editor, right? For the other project that they just wanna continuously, you know, very quickly finish and move to the next one. The combination, right, is a big driver to our success at agencies, with agencies and partners.
Great. Thank you.
Thank you. Next question comes from the line of Elizabeth Porter of Morgan Stanley. Your line is open.
Hi. Thank you so much for the question. I just have one. I wanted to ask on trends in average collections per subscription in the quarter. I think we have to strip out the B2B collections because it doesn't sound like those subscriptions are quite active yet. Could you just provide some color on how collections per average subscription trended quarter-over-quarter?
Yes. We continue to see that it's actually increasing both on a year-over-year basis, but also on a quarter-over-quarter basis. Very important, you know, to understand that, you know, also the mix of our customers change. It keep on changing. We see more business-type customers that are actually contributing more to the overall ACPS. I believe that this is something that we will continue to see increasing also next year.
All right. Thank you so much.
By the way, just on a side note, the B2B partnerships are more toward businesses, because when you think about those kinds of partnerships, usually it's businesses going to and to those partners and, you know, build the website with them and using all kinds of services. So they are actually mostly businesses.
Great. Thank you so much.
Great. Thanks for the question, Elizabeth, and everybody else. That's all the time we have today. Thank you all for joining us, and have a good day.
Thank you.
Thank you, guys.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Have a great day.