Ladies and gentlemen, thank you for standing by and welcome to the Wix.com 2019 third quarter financial results conference call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star then one on your telephone. We ask that you please limit yourself to one question and one follow-up question. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then zero. I would now like to hand the conference over to your speaker today, Maggie O'Donnell, Director of Investor Relations. Please go ahead.
Thanks, Sarah. Good morning, everyone, and welcome to Wix's third quarter 2019 earnings call. Joining me today to discuss our results are Avishai Abrahami, CEO and Co-founder, Nir Zohar, President and COO, and Lior Shemesh, CFO. 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 the 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. You can find all reconciliations between our GAAP and non-GAAP results in our press release, presentation slides, shareholder updates, and our interactive analyst center on the investor relations section of our website, investors.wix.com.
Now, I will hand it over to Avishai Abrahami, who is going to say a couple of words about the quarter. Avishai?
Thanks, Maggie. Good morning, everyone. Q3 was another solid quarter. We've added 114,000 net subscription in the quarter. Collection were higher than our guidance, and we are raising our outlook for the full year when you adjust for changes in exchange rates. Collection from our newest user cohort are higher than last year's cohort, which shows the success we have had in increasing the value of our product and optimizing pricing. The future collection of our existing cohort is now expected to be over $6 billion over the next eight years. This result prove that we have a very strong and consistent core business that continues to grow. We are also seeing great early success in many of our new products and initiatives. The investment in marketing to professional is showing very positive trend.
The perception in the market of Wix as a professional tool is increasing, and we have seen strong growth in users that build multiple website. In fact, collection from users that have 10 or more subscription grew approximately 50% in the last year. We are excited about this progress, and we continue to develop our offering for this market. We recently launched Wix Fitness, our newest vertical offering that focus on one of the fastest-growing categories on Wix. Use of Corvid is increasing, and this product has been an important part of our ability to attract high quality and professional users. We also continue to see positive growth in payments, and we are making positive advancement in expanding our customer solutions. We are ending 2019 on a strong note. We are very excited about the upcoming year. Thank you for your support for this year and for joining us today.
Maggie?
Thank you. Operator, can we have the first question, please?
Thank you. Our first question comes from the line of Ygal Arounian with Wedbush. Your line is now open.
Hey, guys. Good morning, and thanks for taking the questions. I have two. Let's start with subs. You had a really strong sub net add quarter. Your guidance is to now be at the high end of the previous range, which really implies a big deceleration in the fourth quarter. I think the kind of deceleration we haven't seen typically. I want to dig into that a little bit, see if there's something specifically going on there, what the outlook is for subs in 4Q as we bridge towards your expectations for acceleration in 2020. I want to dig into the subscription packages that you're selling to the agencies a little bit more.
Maybe if you could give a little bit more color around how that works, the difference in duration, the average amount of subscriptions you sell per package, and if you could talk about any kind of volume discount that you're giving to agencies on that as well, and how that could be flowing through to ARPU? I guess a lot of questions within those two, but thank you.
Hi, guys, this is Lior. With regard to the net sub add, we had a really strong quarter, which I think that also a good demonstration of the overall changes that we've made in the last few quarters, especially about the price optimization. It was more than what was in our guidance, and that was the main reason for the fact that on an FX neutral basis, we actually beat the quarter. We saw a very strong demand specifically coming from international, but also from our partners. Obviously, this is also very exciting news for us. I believe that based on what we see right now, I think that we are in the right place to say that next year actually will be accelerated in terms of net premiums additions. This is what we expect to happen.
With regard to our Q4, obviously, Q4 usually impacted by seasonality. Therefore, I expect that Q4 is going to be less than Q3 in terms of net subscription, but it always has been the case. With regard to the agencies, I will move it to Nir.
Sure. Gladly. Generally in terms of how we work with partners, naturally, a partner that builds many websites, buys many subscriptions throughout the year, has much better KPIs, delivers more value to us, has much higher retention in the subscriptions that he creates because he gives active support and hand-holding to his customers. Naturally, over time, we see a lot of potential there. As Avishai mentioned before, as we actually included in our package, we're actually seeing when we look at those accounts that have 10-plus subscriptions in them, we're actually seeing a rise of 50% in collections year-over-year, which we see as a great success and a big part of the new program that we're running. Specifically, we're currently not giving volume discounts. We're definitely trying different approaches, working with agencies and with partners.
We want to find the best solutions that will deliver the most value for them. By that, also deliver the best value for our users that are using the platform through them. Obviously, we will see, we deem that to generate great impact for the company in years to come.
Great. Thank you.
Thank you, Ygal. Can we have the next question, please?
Thank you. Our next question comes from the line of Deepak Mathivanan with Barclays. Your line is now open.
Thanks for taking the question, guys. Two quick ones from us. First one, the gross margin deleverage in the quarter was a little bit higher than the second quarter levels. Can you help quantify the impact from customer support Wix Payments? Should we expect this kind of deleverage to be the norm for a few quarters until payments mix reaches a more normalized level? The second question, you noted that the average collections per sub growth is likely to moderate over the next few quarters. Should we kind of expect to see the benefit from price increases that you did in May this year continue for a few more quarters? Is the benefit likely to be less significant from that? Thank you.
Hi, Deepak. This is Lior. With regard to the gross margin, obviously, it was well expected. I actually view it as something that it's quite positive because it means that everything that we've done with regard to payments is actually been successful. Obviously, this quarter, we see a higher top line coming from our payments. We provided at the very beginning of the year some kind of a range with regard to the gross margin, because it was very early to say if everything that we've done about payments, all the initiatives, how it's going to work out and what will be the exact volume, because basically, it's new. I'm happy to say that it was all positive according to the expectations and even a bit better.
Therefore, that as long as the payments activity is going up, it will have an impact on gross margin, but it's all incremental. Very important to mention that the basic gross margin for the core business, meaning the subscription, is still very high at about 84% as it used to be two and three years ago. The more that we are adding services to our customers like G Suite, like payments and so on, and obviously every investment that we have in support has an impact on gross margin, but it's all incremental to the core business. I do expect gross margin to have more impact in the future as payments will go more and more higher. We will try to provide next year more color about it and try to make some more orders as, again, as those kind of services will continue to increase.
With regard to the ACPS, obviously, if I'm looking at the next, let's say, a few quarters. These are a few things that going to impact the overall ACPS, but also the ARPU. It's first of all about how we continue to provide more services to our customers. This is, as I mentioned, I think that payments is a good example to the fact that we are providing more services, and therefore I expect it to increase. Q4 obviously has some seasonality into it, so I don't see that increasing. Certainly next year, I can say safely that at least for the ARPU, it's going to increase and demonstrate all the different services that we are providing to our customers. Also you will see some benefits coming from the price optimization that we've made early this year.
Okay. Thanks, Lior.
Thanks, Deepak. Can we have the next question, please?
Thank you. Our next question comes from the line of Ken Wong with Guggenheim Securities. Your line is now open.
Great. Thanks for taking my question. In the prepared remarks, you guys mentioned potentially launching a significant new product in 1Q of 2020. Just wondering if you can maybe shed a little light on what that might be, and how we should think about potential contributions to top line there. Also you guys mentioned that revenue mix had a bit of a headwind on top line. Could you maybe walk us through what that might have been and, if possible, help us quantify what that impact was? Thank you.
Hey, this is Avishai. We're not in the habit of disclosing product details, but I want to say this is a product that we've been working on for a very long time. We're very proud of it. It's a very clear continuation of one of the strategies we're discussing on this call. I think that the actual product will be a surprise, but the direction is probably going to be something that makes a lot of sense. As a company, we are very excited about it.
Yeah. With regard to the mix, I think that Ken, it was really small. I think that when you look at the revenue, about half was actually coming from FX. The other one is change of mix. Nothing significant that should change your model. Basically, we had more subscriptions. As we mentioned before, we had a strong quarter in terms of net subscription additions. As you know, subscription will tend to be deferred in terms of revenue recognition, so it has an impact compared to other services that have been recognized immediately. Again, it's nothing significant. It was very small, hundreds thousands of dollars that shouldn't make any change to the model.
Great. Thank you.
Thanks, Ken. Can we have the next question, please?
Our next question comes from the line of Brent Thill with Jefferies. Your line is now open.
Thanks. Just to follow on the revenue side. There was, I think, a little disappointment relative to where the Street was at and where the revenue came in, and I think you highlighted part of this is FX and the mix change, but was the bookings more back-end loaded this quarter? Did the subscriptions come in near through the quarter? I think everyone's just trying to reconcile why you wouldn't see a little bit better flow-through on the top line based on the success of the customer adds. We understand the move to subscription, but was it more back-end loaded than you've historically seen?
The answer is no, nothing was unusual about it. We need to remember that most of the incremental subscription that we got was mostly on a non-monthly basis, so most of it is being deferred. Again, it was really small. When you look at the revenue, we are talking about $1.5 million compared to the guidance that we provided before. About half of it was FX. Again, the change was not that significant. I think that when you look at the bookings, obviously it was demonstrated very well that we actually FX neutral, that we actually beat. Unfortunately, not every dollar of it was part of the revenue. Again, it was not that dramatic.
Okay. Just a quick follow-up. Can you just give us a quick update on the progress of Corvid? Thank you.
Oh, of course. We continue to see strong growth, and I think we're currently at about 300,000 high-engage users. The percentage of high-engage users that is growing from 20% to 25%. Again, this product is what enable us, I think, to grow so much stronger into the partners and designers markets. We're very happy with where it is, and we believe that this is just the beginning. There are a lot of things we need to do there in order to be able to get it to the next level. We think that this was a year where we've seen a lot of success from this product. 300,000 developers that really develop into that is a tremendous number, and the fact that you can actually measure the percent change and the kind of users that it brought to Wix.
This is a fantastic success from our perspective.
Thank you.
Thanks, Brent. Can we have the next question, please?
Our next question comes from the line of Zachary Schwartzman with RBC Capital Markets. Your line is now open.
Great. Thanks for taking my questions. Nice to see the uplift in ACPS for new fully priced U.S. subs. On a price optimization globally, you mentioned in the shareholders update that you continue to see these efforts benefit the lifetime cohort. Can you talk more on international, specifically on targeting highly valued users and what you're seeing that gives you confidence that this is the right strategy in those markets given the lower penetration rates? Also, has growth lagged North America and Europe and Asia and LATAM this last quarter? Then a quick follow-up on Corvid. When Wix starts charging to use Corvid, could it turn off these developers who may generally prefer to work with open-source alternatives? If Corvid is kept open source, will outbound agency sales or perhaps a platform marketplace be the best way Wix decides to monetize Corvid?
Just wondering how Wix will walk that line as it comes up with pricing. Thanks.
Maybe we start with Corvid. You were asking if when we start to monetize. Currently, we're monetizing that in a way that you actually pay for the subscription. Even if you use open source, at some point of time, you need to host it somewhere. You build a project, you still need to host it, you need to buy a database, or you need to use an open source database and then host that, use probably Amazon or Google or Microsoft in order to get that as a managed service. Those kind of customers are already used to paying, and I think that if we're going to have a more expensive offering for Corvid at some point in time, they are used to that.
In addition, Corvid also offer the advantage you can develop on it and deploy in a text mode for free, which they don't have today, because they still need to build all the environment in order to start developing something. I believe that if at some point we'll add additional pricing for Corvid, it'll be very aligned with what people are used to doing today, and probably will be easily accepted.
With regard to the global price optimization, the reason why we call it a price optimization, because in some cases, we actually reduce prices in some of the countries. Meaning that we actually run and did those tests literally in every country, to try to see what is the best optimization that we can do in terms of the pricing to get a better value for our quotes. Obviously, where we've made the changes, we see a better value of our quote also outside of the U.S. I think that, in the last few quarters, we got better and growing faster in the U.S. than other places in the world. One of the reasons is obviously the strength of the dollar compared to other currencies. We need to remember that when we do the TROI, it's based on dollar.
If we are getting, for example, in the U.K., we are getting the same amount of GBP, in USD, it's smaller. The model is actually adjusting that automatically, to be based on the TROI. We were growing faster in the U.S., but I believe that still the international has a huge opportunity for us, and especially with all the price optimization that we've made, I feel that the value from the quote is actually going up.
Great. Thank you.
Great.
Thanks, Zach. Can we have the next question, please?
Our next question comes from the line of Ron Josey with JMP Securities. Your line is now open.
Great. Thanks for taking the question. Lior, you talked about, or at least in the letter, we had three reasons for confidence in growth next year of the subscriber base, products, partners, customer solutions. Can you just talk more about the partner side, with the partner program live, how built out is the program? Are you expecting more partners like the TownPage partner, or is it smaller agencies? Any insight on maybe that second leg of the three legs that are driving growth next year? Yeah, I'll just stop there. I guess maybe a quick one, Avishai, you talked about excitement into 2020. Obviously, we have new products, payments gaining traction, subscribers. Anything else that you want to highlight there? Thank you.
Yeah, sure. I think that in terms of subscription growth, first of all, we keep on building, improving the current products that we have, and also building new products. We always expect, and we have a great track record, I think, of showing how those new products improve conversion, and by improving conversion, obviously driving growth. The second part, in terms of partners, absolutely, yes. I think the initiatives will cover any kind and any size and any forms of different partners and agencies. The NTT deal is definitely one kind of an example of a partner. We'll keep on going down that path of supporting any kind and any size of those partners. This is exactly what we set up to do. We wanted to evolve and expand our business, to the people who are building the websites for other people.
Regarding the second question, can you repeat the second question quickly?
Well, I guess it's more bringing everything together into 2020. Back to partners, can you just talk about how built out is the program? On 2020, more than I've seen in the past, just comments around why 2020 is sort of exciting in your mind, new products, subscription acceleration, payments getting stronger, et cetera. Just Avishai, you mentioned excitement into 2020, just more thoughts around that. Thanks.
Yeah, absolutely. I think that companies for the life go from stages, I think that one of the interesting thing that companies can experience is the ability to attract new kinds of customers. New type of customers. The nature of a business, the subscription, things take time to accumulate to be significant. What we see now with our ability to attract professionals to Wix, for me, is really exciting. It will take time to accumulate. As you've seen with ADI, things take time, we're seeing already that the number, the perception, the growth, we're going to have some interesting stuff coming in the Q1. As a result of that, I'm very positive that we'll be able to not just do what is our traditional market, but actually expand to new markets.
I think that is something that does not happen a lot in life of companies where the point where we are seeing something like this happen. For me, it is super exciting. In addition to that, I think that if you look at the total view of our market as a company, then on the other website there, I think that our dominance today is higher than it's ever been. We can see that in many different aspects. I think that is the outside, which is something that we are very happy about. I think that we spent a lot of effort evolving our technology and product to a level that it enables such a thing to happen.
Thank you.
Thanks for your question, Ron. Can we have the next question, please?
Our next question comes from the line of Naved Khan with SunTrust. Your line is now open.
Yeah, thanks a lot. Couple of questions. On the subscriber additions for next year, again, you guys called out the three components, improved conversions from product improvement, partner program, and the customer support. In my mind, if I had to rank order them, how should I be thinking about the impact on the subscriber additions for next year? I had a question on the state tax. It looks like it's going to be getting layered in over the coming months. Is there a potential impact on conversion rate, meaning as people see a higher amount that they have to pay, you might see an impact on conversions? How should we be thinking?
I would start with the first question about the subs re-acceleration. There is, by the way, a fourth reason, which is the lapping price optimization impacts, which we had it on 2019. It was kind of a one time when we did the price optimization. I don't expect it to happen, at least not at that magnitude in 2020. We had this impact. In 2020, you basically start from a different place, and therefore, the effect of the price optimization actually is going to end at 2020, when you look at it on a year-over-year basis. Again, that said, as you mentioned, you have new products and obviously impact conversion, the partners and support investment. I believe that obviously partners is a big chunk out of it.
I cannot rank it to you one, two, three, four, but obviously partner is a big, one of the most important items for re-accelerating. With regard to the sales tax, the answer is I don't know. I think that everything about the sales tax is something that happened. It's a new thing in the U.S., at least for most of the countries. We need to see the impact of it. I think that it's not just about Wix. I think that people used to pay sales tax and think that it will have any big impact. We saw that, by the way, in the past in Europe, when the VAT started, which is essentially, it's really the same. We haven't seen really impact on the conversion because of that when people started to pay VAT in Europe.
I believe that it's really the same, but again, it's hard to tell. We will have to test, we will have to understand, and then, obviously, we will inform.
Thanks. That's super helpful. just on the clarification on the tax issue, is this something that is layered into-- you reiterated guide 450 to 500,000 for the year, but you think you're going to come in towards the high end. Are you baking in some appropriate amount of conservatism because of the tax issue?
No. Because remember that we are talking about this number for this year. In 2019, we haven't really started to collect taxes, the sales tax from the customers because we need to get ready for that. Every country has different rules, and therefore it is part of our provisions, meaning that next year we won't see that as a provision because we are going to charge customers and pay it back to the different authorities. Therefore, there is no change in term of the pricing of sales tax in 2019.
Thank you.
Thanks for your questions, Naved. Can we have the next question, please?
Our next question comes from the line of Jason Helfstein with Oppenheimer. Your line is now open.
Thanks. Two questions. With respect to next year, you're basically telling us you're confident in sub-acceleration, better ARPU. You're obviously not giving us revenue at this point, if I do the math, and just correct me if I'm wrong, the guidance basically assumes 27% collections growth. There's a currency headwind. I think if you back out the headwind, it's about 36%. Are you basically telling us, [kinda], in aggregate, adjusted currency collections basically should accelerate next year? Just can you clarify again on the pricing increases, when you expect to be complete as far as announced, then they roll through at the annual increase when that ends. Thank you.
With regard to the first question, Jason, obviously, we are not in a position to provide numbers right now for 2020, so unfortunately, I cannot comment on that. I think that the only comment was about the re-acceleration of next year net subs. Again, not a specific number, but we cannot comment on the exact collection and revenue for next year. With regard to the pricing increase impact, so obviously, we started it at mid of 2019, so I guess that the impact lap in mid of 2020, in most of the cases. I hope that was the question.
Can I just clarify the currency impact, the implied, it's about, what is it? About nine points in the fourth quarter, is that right? Headwind?
The question is compared to what? If you compare the effects-
For collections growth
Yes
headwind in the fourth quarter with the implied guidance.
When you compare it to the last guidance that we provided a few months ago?
No. year-over-year.
Year-over-year.
Year-over-year growth in collections in the fourth quarter, ex currency.
For the overall year, the impact was about $12 million. I believe that for Q2, it's $a few million. I don't think that we provided the number. I can check it and get back to you. It was $a few millions.
Okay. I was talking about the fourth quarter, though.
The fourth quarter?
Right. What's implied in the guidance, that it's about a nine-point headwind on collections.
It was more like $2 million-$3 million.
In the fourth quarter.
Yeah, for the fourth quarter, on a year-over-year basis. Correct.
Okay. Thank you.
Thanks, Jason. Can we have the next best question, please?
Our next question comes from the line of Lloyd Walmsley with Deutsche Bank. Your line is now open.
Thanks. Can you remind us, do some of the lower-margin products like G Suite and payments flow through the disclosure on cohort collections? Kind of when you look at cohorts, on a gross margin basis, adjusting for some of the lower-margin products, can you talk about how the recent cohorts look compared to earlier cohorts? A second one, if I can, just on the collections from partners with 10 or more subscriptions being up 50%, how big is that in your base, from last year, just prior to the agency push, the sales force push? I would think it would be growing even quicker than that, unless it's just bigger portion of the base than we realized. If you can give us a sense of the magnitude of that in the mix, that would be really helpful.
With regard to the first question about the calls, basically, the calls include collection in term of dollars, not margins. To your question, it includes the G Suite, includes everything that we are selling because we need to compare it to the overall TROI model that we have, and we measure collection. Obviously, the other associated cost is part of the overall budget and profitability that we are keep on optimizing. You are right, the cost includes all the different aspects of the collections. With regard to the increase, I mentioned of partners, we didn't actually provide the number, but it was a very quiet and significant increase, compared to where we were last year.
It's starting from a wide base.
It's a wide base, correct. It's a wide base. Remember that we already had our partners when we started. Overall, it makes us to be very excited about next year.
Okay. On the cohort stuff, given that it does include some of the lower-margin products, I mean, if you look at it on a gross margin basis by cohort, is that showing healthy growth as well?
Correct. Because still, for example, when you take the payments, although we had millions of dollars, for example, this quarter from payments, it's still not that significant when you look at the cohort basis. Remember that usually when you start a cohort, usually you don't use the payments immediately. It takes time until you open the store and start to have business on top of it and so on. Usually, it's incremental. It might have an impact in a later stage. I believe that it will be all incremental because the basic, more fundamental business that we have has not changed in terms of the gross margin. I believe that it will certainly going to have an impact in the future. Right now, it's not so significant, but it will be interesting to see.
Great. Thanks. Can we have the next question, please?
Thank you. Our next question comes from the line of Sterling Auty with JP Morgan. Your line is now open.
Yeah, thanks. Hi, guys. One question, one follow-up. First, on Corvid, you mentioned in the prepared remarks the 6.5x, I think, traffic improvement for sites that are actually using it. Can you give us a sense of what is the revenue per subscription for those that are using Corvid, and in terms of how that compares to the average revenue per subscription?
Yeah. I can say that overall, people that are using Corvid tend to take the more expensive packages. Currently, all pricing for Corvid is within the normal business model that we have. The one thing that we do notice that is very significant is that the retention of those users is dramatically higher. They tend to stay much longer, build a much more complex website. Does this answer your question?
It does. Thanks, Avishai. I really appreciate that. One follow-up on payments. Can you give us a sense of what is the type of customer that's taking Wix Payments, and maybe Lior, given the number of questions earlier in the queue around payments, can you just remind people what the accounting is for payments?
Sure. Oh, you want to go?
Hey. Hey, Sterling, it's me. I'll take the first part into the type and hand it over for the accounting to Lior. In terms of the kind of user, it's very varied and diverse profile. You have to remember, we have so many different kind of businesses running on our platform, and many of them would like to close transactions online. It will be an online store, naturally. It will also be someone who's using our bookings engine and then trying to close a class or an appointment. It can be a restaurant. It can be someone who's selling tickets to an event. When you look at e-commerce kind of transactions on Wix, you have very high variety, and all of them need that ability to do payments easily. With regard to the overall margin of payments, Sterling, to your question.
When you look at the payments by itself as a business, it has a much lower margins than the overall margins that we have. I think that it's usually around 30%, but we need to remember that the way that I look at it is in a much different way, because I think that the more interesting way to look at it is about all the services that you provide to merchants. It's not necessarily just payments. I think that payments is one of them. In some of the cases, you can provide a bundle solution that include all kind of stuff, like, for example, drop ship and so on. It's nothing new in this market.
I think that it's much more interesting to look at the overall margin of those merchant solutions to our customers, because in the end of the day, each and every one of them have its own value, but together, they provide much more value to the customer. If you ask me about the target of where I can see that in the future, I certainly hope that it will be somewhere between 30%-40% when I'm talking about the overall services that we provide our merchants and our customers in general. I hope that next year we'll be able to provide much more color around it. I do believe that, as long as it's growing, we need to provide some more information about it.
Understood. Thank you so much.
Thanks, Sterling. Can we have the next question, please?
Our next question comes from the line of Josh Beck with KeyBanc. Your line is now open.
Thanks for taking the question. I'm not sure if you'll be able to address this, but I'm really just trying to think a little bit more granular about the shape of net add acceleration for next year. When I look at the implied Q4 guidance, it seems like the way that the 2020 is going to start off is it could still be down, and then maybe the back half could feature a lot of acceleration, and that's what gets you to a better number for the year. I know that's pretty detailed, but is there any commentary you can share just on the shape of net adds for 2020?
Sure. I think to answer your question, I will start with some general comments about it. You can see that in previous years, when you look historically at Wix, it was all based on product, meaning that the way that we increase net adds was all due to when we actually launch new product. In some cases, you saw a better, a stronger H2 than H1. In some of the cases, a stronger H1 than H2. Except of seasonality, where usually, the first quarter is really, really strong. There is another impact of when your product become mature and people actually more engaged with your product in using that.
Specifically to your question, I do believe that the second half of next year is going to be stronger than the first half of the year, simply because of the fact that the effect of partners, I do believe, will be stronger in the second half than in the first half, as the product is more mature, and we have the opportunity to increase the usage of that. Second, there is also obviously the effect of the price optimization that we've made. If you look at it on a year-over-year basis, the price increase lapping is at, I think that it's around May of 2020. Obviously, when you look at it on a year-over-year basis, again, and it's mathematics, there is also an impact to that.
Great. Thanks, Josh. Can we have the next question, please?
Our next question comes from the line of Aaron Kessler with Raymond James. Your line is now open.
Great. Thanks, guys. Couple questions. Maybe first on the customer solutions initiatives, reaffirm kind of the five-point growth re-acceleration in 2020. Can you maybe update us on maybe traction or what you're seeing so far, in terms of conversion rates, et cetera, from customer solutions investments? Second, just maybe quickly back to the gross margin drivers on a sequential basis, if you look at maybe the rough 200 basis points decline, should we infer most of that was payments, or can you help with how much the sequential change is payments versus customer service and G Suite? Thank you.
Hey, Aaron. It's Nir. I'll take the first question about customer service. I have to say, we've kind of dived into this whole initiative based on years of data and work we've been doing in our customer service, and understanding, in many ways that this is, I know it's a big opportunity that was just there for us to go after. Throughout this year, we hired and increased the size of our call centers, mostly based on a third party. We're talking about hundreds of agents. Just by doing that and training them on the basic level, we already managed to definitely improve significantly our SLA, and just give better customer service in general.
What we're doing in the last few months is basically going into much deeper training levels, and basically working into a much more personalized level of customer service and experience in a way that will actually help us consult our users, to just become better and more successful online. Whether it's taking them through the building of the website process and helping them convert, and getting to the endpoint and actually have a live, effective site online. Even if they already have converted, and we can help them out, get more value by using more products, whether they are free products or paid products, Ascend, for example, we would love to do that as long as we help become more successful. That has been the big focus in the last few months.
Also kind of revamping a lot of the training programs, understanding the quality control for them, bringing in more new talent of people with experience that can manage and run such an operation. I would say that I'm very excited about this, not only because of the potential growth we see towards 2020. I think that for us to be able to be in a position where we work with our customers more closely, we consult them, we help them be more successful, just puts us in a much better position for growth in years to come, not only as I look forward into next year.
Yeah. With regard to the gross margin decline, this quarter compared to Q2, since the investment in customer support was already done in Q2, and obviously in Q3 it was a bit higher, but most of the impact is coming from payments.
That's great. I think we have time for just one more question. Can we have the last question, please?
Our last question comes from the line of Jonathan Kees with Summit Insights Group. Your line is now open.
Great. Thanks for squeezing me in and taking my question here. I wanted to ask regarding one of your opportunities, specifically international. I've heard you in terms of you're seeing international as a huge opportunity. If I look at the growth rate for the regions for the quarter, it was only Asia-Pacific that was at corporate average. The other regions were below corporate average for the year-over-year growth. I guess, I also saw the announcement with NTT Town Page there. Just trying to tie that in. Are you looking to change your strategy by chance? Are you looking to lead international more with Corvid? Are you also looking now at just focus countries versus more the regions? Are you going to still stay with the DIY market services? Thanks.
Well, I think that you asked a lot of questions. Maybe I'll start with that.
Obviously, we've continued to go with our do-it-yourself strategy. As we said, we are also working on attracting partners being companies or individuals who are building websites for others. NTT is an extreme example of that. Of course, it's not the common case, which is a huge company that is now using Wix as the technology and product to build websites for their customers. That is aligned with our partner strategy. We hope to have a lot of those in the future, some of them as big as NTT, and the majority of them, of course, will be smaller. We will continue our do-it-yourself business as it is very effective. We do intend to continue and invest in the partners. As we mentioned today, we see a lot of growth in that.
The amount of users with the 10 or more subscription is growing rapidly, 50% on revenues there. We are very excited about both opportunities. We don't see them as conflicting with each other. Most of the people that will take a partner to build a website will not do so on themself either because they're too busy or because they don't have the computer skills, or they want a professional to do the website for them. We believe that those two do not conflict with each other, actually contribute to the creation of Wix as the stronger brand in this category.
With regard to the first part of your question about Europe, for example, I think that the best way to explain it in a simple way is about the TROI. Think about it this way. What happened in Europe, and the strength of the dollar compared to the Euro and the British pound obviously has an impact because when you do the calculation of the TROI, essentially, it's dollar in and dollar out. Obviously, dollar in is less when you convert what we are getting in Euro and British pound. Therefore, we allocate some of the investment to the U.S. where we saw there are much better growth. Most of the impact was because of what happened to the FX, meaning had the FX remained the same as last year, you would've seen more investment in Europe because of that.
Okay, great. Thanks, Lior. Thanks, Avishai.
Thanks for your question, Jonathan. Thanks, everybody, for.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.