Wix.com Ltd. (WIX) Q3 2021 Earnings Report, Transcript and Summary

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 a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. . I would now like to hand the conference over to your speaker today Maggie O'Donnell, Director of Investor Relations. Please go ahead.

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 in COO, and Lior Shemesh our CFO. We also have Joe Ferrell our of the U.S. who is going to moderate our Q&A. During this call, we may make forward-looking statements, statements are based on current expectations and assumptions. Please consider the risk factors included in our press release and most recent Form 20s 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 in our interactive analyst’s center on the Investor Relations section of our website, With that, I will now turn the call over to Joe, who will be moderating the Q&A with the team.

Thanks, Maggie. We've got some good feedback that this format is a good way to conduct earnings calls. We're going to do it again this quarter. So, 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, we saw in the summer that it was continuously declining. And since then, we're now seeing -- starting to see that there is a recovery. Apparently, the uncertainty and the slowdown, it's kind of like in some places it's bouncing up. And because of that, we believe there is some recovery in the economy. And -- I think this is a very global phenomena, 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 has the former expectation in Q3. And as a result, we are increasing our outlook for the year. Growth is better than we thought last time we spoke.

Great. That's great news. So, 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 believe. Conversion is still very strong embedded than expected. Renewals continued to beat our expectations. Average collection per subscription continued to increase. We doing very well and we believe we are in line of our targets of $10 billion GPV this year, which is 85% year-over-year growth.

That's great. So, we -- you look much further ahead in the business than just a quarter here. So, what are you seeing in the business beyond these results that are exciting for you right now?

Well, I think that the most initiative for me is that, obviously there is the slowdown of the economy and we all know that COVID has a massive impact globally. But if you look at the underlying leading indicators for what makes WIX work. Then I'm very excited it's one of the first signals for me is that designers and agency on weeks has grown 92% year-over-year, which is amazing. This is one of the things that -- it not just shows the strength of our product, it also will generate because those people, those companies tend to build more than 1 website. So, by adding them at that quick rate, we're obviously going to get combining growth within the next couple years. Performance improvement for our website you build in WIX has continued to improve. And today according to Google, WIX is the fastest among all of our competitors. And then that's really important, Mike, for our customers and especially to the professional customers that we have. Customer care, big improvement. Of course, COVID was when we had so much demand, maybe go to a very hard place for us. We are fully recovered. The matrixes that used to measure that growth by 118% year-over-year, which is again, fantastic. We experiment again 85% growth year-over-year. Commerce. So, we have a lot of product development there. And even though, a lot of them are still influenced, heavily influenced, by COVID, right? We've still grown 47% year-over-year. And that's amazing. You have to remember, our commerce is so much more than just a shopping cart, scheduling its events, ticket. There's a lot of things that are still very influenced by COVID and even so at 47% year-over-year. And of course, business to business partnership, which is a way for us to -- in most cases to acquire very large agencies that do market WIX, build webs for their customers, is growing in a greater rate than 9x year-over-year. So, all things together, if you look at them, they're the leading indicator of how good a business is going to be doing in the next year, the way after that and they're following that. I think all the ongoing 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've ever been since that period.

That's great. So, let's dig into each of these areas you mentioned several kinds of things. And I want to start with B2B partnerships. So Nir, let's go to you. Why is B2B partnerships such an exciting opportunity?

Well, I think it's something that's 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 will influence on our business in 2021. In essence as Avishai said, it's the continuation of the partners of the agencies we've targeted, really massive ones that are joining us and working with us. And I also think that it's a fantastic signal when really big companies say to us, we want to adopt your technology in order to cater to the needs of our customers, to get testaments for our brand, and obviously for the maturity of our product. And lastly, for us, it's another fantastic go-to-market strategy when we're basically taking the same products, the same innovation that we have and ending it across the board in other new channels of new users.

So that's -- typically it's been an area that has been getting many questions is around the business model here. How is the business model the same as what we're already doing elsewhere?

Well, I think the unit economics are pretty much the same. In this case, the partner is the one who is spending their marketing dollars instead of us. And then we provide the product without any additional costs for us in terms of care, or development, or hosting, or anything like that. And when you think about it, they then behave very much like our regular course because they are going to be adoption and activation of subscription and then renewals over time. And then, at the expansion, with more people using Business Solutions, and adding Ascend, and using WIX payments in generating GPV, etc. So, in that aspect, it behaves like any other recurring subscription business in other parts of our business. And it's tax over time. Just as an example, if we take that main -- the major partner we had in '19 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. That's just because of that compounding effect, 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.

I think 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 obviously I just mentioned. Obviously, as you said, it's very diversified. So, we have stores and products, but we're also selling services and restaurants, and events and hospitality and so on. And for that, we keep them paying off whether 47% year-over-year growth. The $10 billion GPV mark that we believe we're going to -- we're on track to hit by the end of the year. So, we're extremely excited about it.

Great. And just to touch on one thing specifically around the e-commerce strategy, Avishai, we announced last week, Wix Fit. Talk about how this fit into our commerce strategy.

We've seen that we're starting to get more and more fitness, they train their teams. And we realized that it might be a good thing for us to package that into a grand offering. So, because lot of those guys they need scheduling, they sale stuff today, they show store, they offer online courses, videos. And we felt that if we turned that into a more of a solution, which is very well packaged, we might see a really good effect. A big part of our -- the strength of our e-commerce is that we didn't have to go there from scratch. We just have to use the components that we have and rearrange them and make very clear messaging around it. And so that's what we did. And we're seeing really good results from that.

Great. And just another area that you touched on, Avishai, agencies and partners. So, provide us an update on where we are with that initiative. Obviously, we shop growth, so share a little more.

Yes, we did % year-over-year. A large part of it, I think is can be contributed to the improvement in product. Of course, we have the agent help them and account managers supporting them. But WIX and the Classic Editor and Editor X have really strong value and propositions for agencies. I think that's a big part of what the move. Another part is that the combination of the -- those tools create so much better productivity. For our customers, I think that is why they're sold out. And again, , which is a big contributor to the growth here. And if we look at all of those security, this performance, the different editors that you can use, we are seeing clear indication that we are rapidly gaining market share, mostly for more at all. So, we're very excited about than and we think that this is really one of the best leading indicators for WIX region.

That's great. And then one other area that I know before we get to Lee or one other area near that a lot of investors have been thinking about lately is around marketing. There's been a lot of changes in the online marketing landscape. How have we managed through that?

In all honesty, we haven't really been impacted by that. We know how to shift to the places where our TRI 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 serve, we actually managed to spend more on the same marginal TRI, which is great. And I got to tell you for over a decade of WIX running in massive growth rates and investing a lot of marketing to support that, we’ve gone through big changes in marketing almost every year. To name a few, there's the rise of Facebook advertising, our move in and then out of TV because it -- when it stopped being interesting enough, the rise of YouTube advertising. And I think the great thing working for us, is that we have extremely talented and strong marketing team that is actually not only ready for those kinds of changes, I think they actually excel especially with those challenges.

Great. So, 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.

So, thank you, everyone for joining us today. Obviously, we are really happy with the results. I think that it's displayed improvement in the business environment as Avishai mentioned before. So actually, the collection 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 were actually higher than our own expectations. And also, we saw that conversion, actually, was better in many, many places. And I think that Avishai mentioned before, for example, with and the increase in the number of agencies, 92% on a year-over-year basis, so obviously that one has also contribution for the fact that we managed to beat our own expectations. These portions are mainly -- also affect the revenue. But in addition to that, and the reason why you would beat collection more than revenue was mostly because of better-than-expected B2B partnership in Q3. Actually, one of the deals that was supposed to close in Q4, but was done in the first quarter. And again, B2B partnerships mostly affect collection on the short and 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?

So, I think that first of all, as always, I want to relate to that in 2 separate things. The first one is about the creative subscription gross margin. They're out stabilizing. They will -- they've been 77% for the last 3 quarters. Actually, we expected for the year to close at 76% to 77%, and I think that we are even a bit better than that. We do expect improvements next year for the gross margin’s creative subscription, as we mentioned before. I believe that the gross margin for the creative subscription is something that was -- again, that was down because of mainly 2 reasons. The first one is about increasing the investments in performance. And we saw and Avishai talk about the increase, the fact that the WIX platform is the fastest one in the world right now. So, this is something that is really amazing. This is something that we already started to feel the contribution of it and because at the end of the day, it's contributed to the conversion, it's contributed to many things. And again, we are going to see the fruits of it 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 over the improvements, as we mentioned before. With regard to the gross margin of the business solution, it's many impacts by the WIX payments. And again, I do expect that we WIX payments gross margin will improve next year. It is very much in line. The overall Business Solutions gross margin, what we said, is around 22%. But again, we do expect to have improvement in margin specifically for payments.

Got it. Okay. 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 in Q4 -- was in Q4, so now we're here obviously. How has that changed since we gave guidance in August?

So, in -- actually it got changed in mostly 2 aspects. First of all, just to remind everyone, the ranges we provided last quarter was the 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 towards the high-end. What's happened of lately, and we mentioned, but before, about the improvement of what we see right now with regards 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 method. We see the improvements, and trends are definitely better than the last quarter. And 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 exist, but less than what we've seen before.

Okay. And just to be very clear on what you just described it. 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.

So, in the third quarter, we recorded the collection for Vistaprint. We mentioned that last quarter as expected, but we had also some modules that we signed in the third quarter and were recorded as part of our collection. One of them was a bin that originally expected in Q4, but was signed during the third quarter. So yeah, I think that that was the reasons for that.

Okay. Great. So, 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.

So as always, when we see a bit of demand to our product, it follows by increasing the investments in marketing. So actually, it's a really good sign for that. So, this is exactly what we did this quarter. We have -- most of the reason why we decreased the guidance for the free cash flow was because of further investments in marketing. And this is something that, obviously, we are always happy to do, very important to still within our TRI. In addition to that, we had the impact with a few millions of dollars 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 had an impact.

Got it. Okay. Great. And just before we go over to the phone and take questions, I want to end with Avishai. Obviously, we're coming up on the end of the year. A lot of investors are thinking about 2022. I know we are as well, so share a little bit about how we're thinking about 2022 and even beyond.

Of course, it's also a bit too early to provide guidance for 2022. However, if you look at all of our signals, agencies are growing super-fast. Commerce is growing extremely fast. B2B partnerships are growing very faster than really exciting. And they're taking -- potentially taking bigger and bigger market share. 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. And I think that even now, we're in a stronger and perfect position than we've ever been in the history of the Company. us to competitors is so big today that it really is incredible and you could see a lot of the results even today. So, I'm very excited about what we can do in 2022 and out-of-hand I can say that we have some really good product coming soon. So, I'm really -- I'm really -- I can't wait to share with you about those products. So overall, very excited.

Great. Thank you all. So, Operator, I think we are ready to turn the call over to the analyst’s questions.

Thank you. Our first question comes from the line of Sterling Auty of JP Morgan. Your line is open.

Thanks. Hi, guys. So, I want to dive into the B2B partnerships. In serving 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 and your typical go-to-market motion?

Sterling. It's really good question and I think the answer is that it depends on the partnership. 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. Usually, they actually build the website for the customer. We still have Diverge communicate with the customer in a direct manner because it's not hidden. It's not like it's not a white-labeled partnership. It's -- they're building it on the WIX platform. But I think that in many ways those partnership behave like any other agency where the agency brings the customer buildings on WIX and they are responsible for managing the relationship with the customer. And we are usually doing a lot of communication for the agency. So, for NTP, for Vistaprint or for a small agency.

That makes sense. And then one follow-up. Administratively, I didn't get through all the letter and presentation. But are we going to get the typical Wix December events? Are we going to do it in person? And what should we expect out of that event if you're going to do it.

Sterling, this is Joe. I will pre - empt anyone from saying anything and just stay tuned.

Always the face-to-face is going to be very hard. That's the other thing, face-to-face is very hard. You're going to probably -- but we're very close on the date of something that we wanted to release. Now we're going to have to sync with COVID, of course, and see what they're doing.

Alright, sounds good. Thank you, guys.

Thank you. Next question comes from the line of Ken Wong of Guggenheim Securities. Your line is open.

Thank you for taking my question. The first one, just as we touched on 2022, I know we're not quite ready to give guidance yet, but given all the movements the last quarter to this quarter, should we still think that the trajectory of this business is going to look 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 call in a position that was never been the same. And I think that it's amazing. We talk about the variety of our products, agencies, commerce, the B2B payments. So, all of it is obviously a very, very good sign and we're very excited about it. I think that it's too soon to talk about what to expect from next year. But certainly, we have all the tools in order to execute in a really good way.

Got it. Okay. I appreciate it. Fair enough. And then just on the B2B side, you guys previously told us about $70 million in collection 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? And then, just on the pull forward, from Q4 to Q3, any rough quantification of the impact in the quarter?

So, with regard to the first question, about the $70 million, we are about the same. And what was the question about the fourth quarter, the pull forward?

Yes. It was

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 given the rebound of what you're seeing, there have been many questions about how that's trending in October and into November if you can just directionally give us a sense of if the demand trends that you saw closing out the quarter continuing into this current quarter, a quick a quick follow-up.

So that we continue to see improvement from the summer. However, it's very hard to predict the future because how the world economy behaves after COVID, this is the first time, but we do continue to see improvement in the U.S, in some places in Europe. And so yes. The answer is that we continue to see improvement. And of course, we're not yet back to normal on many things. You know that supply chain issues, we're seeing of course, everything there has to do physically, face-to-face meetings or events is influenced. So, there is a rebound, there is a coming back. We hope this summer was the bottom. But I think there's still a lot of uncertainty and we hope that if this uncertainty clears out into 2022, we're going to continue to see improvements.

And just a quick follow-up on the free cash flow. Certainly, I understand that they 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. Did something structurally changed in the business that you have to 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?

So first of all, you're right about the number of where we are actually ending up this year. But it's very important to mention, the free cash flow in terms of the core business of the traditional core business of have been changed, still strong, very strong as it used to be in the past. Usually, when you start a new business, for example, like a payment, like the B2B partnerships, you don't see the immediate effect on free cash flow. We are growing the business, you are investing. And then it followed by the cash. So, this is something that is very important to mention. For example, we are closing many, many deals with B2B partnerships. Do we see the cash immediately? The answer is no. Are we going to see this cash? Absolutely, yes. So, I think that many of the effects that we see right now are the temporary effects, and we're going to go back actually to the same contribution. But again, very important to mention, on those deals -- on those kinds of platform or core business, what we had many, 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 Nick Jones of Citi. Your line is open.

Great, thanks for taking the questions. I guess, just one on 4Q guide. I mean, how are you thinking about the seasonality heading into 4Q? I think we've heard from other SMB -focused businesses if there's a risk of increased travel, fewer people at their computers, and potentially harder date to get that ads in 4Q. And then I have a follow-up.

Thinking about that historically, Q4 was a bit always slower for us in terms of new subs. 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 other years. But if you look at the business of our business -- of our customers, it's usually been doing much better than Q4. So, everything that has do with, which payment, GPV, transactions of our customers usually tended to do much better than Q4. And I think we're going to see that again this year. And to say what is the magnitude, again, it's the first time we have a year which is post-Corona or how post Corona or post-corona and sometimes is not in some other some states and some other states. So, it's very hard to predict, but I would say, I think that our customer business is probably going to do very well in Q4. And due to some recovery, some uncertainty and clearing, which of course will influence the GPV. And we experimented business on the other hand, what we predicted in terms of slowdown in shop which is additional to Q4. I actually believe it's going to be smaller than other areas. I think it's going to be a higher rate. However, this is my personal belief and the way we talk about the guidance, we took the same factor that we added historically

Got it. And then a follow-up, you mentioned in the letter, on the call earlier about WIX being the fastest platform versus its peers. How does that benefit manufacturers? Is this impact retention mode or is this a criterion that new potential subscribers are looking for when they are choosing a platform?

Well, if you look at the more professional market, then obviously they are doing benchmarks, right? They're actually comparing and they're doing benchmark before they join, and of course after they join. And so, this is for the most sophisticated customer and which is pretty much all of those agencies we spoke about and partners. And then B2B businesses, all of them actually care about that. And I think being number one at that is very significant in the -- in contribution to those growing so quickly on WIX.

Great, thanks.

Thank you. Next question comes from the line of Trevor Young of Barc Leisure. Line is open.

Great. Thanks. 2 for me, if I may: 1. Just on packing the revenue guide for 4Q, if we assume steady trends on creative subs, that implies a pretty material de -sell on business solutions potentially being up only slightly Q-on-Q in terms of nominal dollars. More than that, the right way to think about it into -- why would that be the case given the ramp that you're seeing in payments and obviously seasonality there? And then second question, just can you talk about where we are in payments take rate versus the 1.25% to 1.3% guide earlier in the year?

Yes. So first of all, we do expect that business solution is going to be stronger in the fourth quarter, I think that Avishai mentioned that before, mostly because of payments. It's the holiday seasons. And this is something that we think that is going to be really productive for us in that -- which regard to that. The second thing about the take rates, we are on track. Actually, it is something that we -- before that it's improving, and indeed, it is improving. So, this is really exciting. I do believe that this is something that we will continue to improve also next year.

Great. Thank you.

Thank you. Next question comes from the line of Mark Mahaney of 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 point-of-sale solution traction? Thanks.

Of course, Joe. Yes, we do think countries in Europe, faster recovery than in other places. I think that Germany and France, we've seen that we also invested a lot of localization in those countries, Actual point-of-sale, I'm not -- don't think wanted to -- I'm sorry, you want to talk about it? Go.

Again, not to take too much heap of 1000 point of sale, I can say though that we are very evolved in our beta phase. And I think early next year we can probably start expanding it. And we are extremely happy with the results so far on both the reception as well as the usage and the volumes that we've seen on the point-of-sale are -- 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 and Company. Your line is open.

Great. Thanks for taking the question. Just one from me, just in the shareholder letter, you discussed increased sales and marketing expense in 4th 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. So, cashback period of about 8 to 10 months. So normally within 10 months, we will get about 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 Nath Ho of William Blair. Your line is open.

Hey guys, thanks for taking my question. Just wanted to ask one on the commerce component. And -- so you do have a mix of different businesses within that group. So, I was wondering if you could provide some more detail in terms of what you're seeing with maybe product-based e-commerce businesses versus some of the more service or content related businesses. And then you kind of alluded there's a group within there that's still being significantly impacted by COVID, so would you expect to see some material acceleration within that group once we come out of this? Thanks.

Hey, sure, Nath. So, about COVID, obviously, we're not going to break down each and every type of business and the percentage. We can't say that we are seeing an ongoing -- a growth of the portion of the non-products share of the commerce. It doesn't mean that the products are slowing down. It's actually means that just the services part is growing faster, and today, it's almost 50-50 on our platform between the products and the services, which, again, we think is great since we have that wide diversity of e-commerce usage.

As for the -- I think that -- and this is one of the reasons that we expect to see even bigger growth when we coming out of COVID. 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. And if you think about global businesses, places that are still very heavily affected by COVID, like Latin America and some countries in Europe. And we really believe that when we come out of COVID those will add an additional boost into growth. So 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 Q - Ygal Arounian of Wedbush Securities. Your line is open.

Guys, a lot of focus on the B2B side and agencies and the strength we're seeing there, a lot of investors have tried to do with us especially since you gave us 70 million number last quarter. 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. So, could you dive into that for a little bit what you're seeing there. And if that's regarding similar levels across the board and just in general, what you're seeing in DLI.

I'm not sure I understand the question.

So, I'll try to look at it.

Are you talking about the B2B businesses partnerships?

No, outside? Right. So, you're talking of B2B or a lot of strength in B2B, a lot of strength from agencies. Those that are building sites for others are coming through the B2B channel. How are trends in the DIY side of the business?

Is still going very well. I think that -- maybe one of the misconceptions that is happening is that -- we all always had agencies, right? We always had partners. We always had big partners, right? And we broke out the first one downside in the Japanese Company, right? We broke it, I think, 2018, and we spoke about it, but we always had those, they're always been part of our growth. And a lot of them really organic. So, when you look at our customer base, I think that, yes, that the agencies department, part of which is growing, but everything is growing. So, I'm not sure you should break it up.

Okay. That's actually really helpful. And a lot of them just have been thinking of . Go ahead.

Maybe that's why you don't ask, maybe because when we broke it out, we didn't provide enough color. But really, there's nothing new there. This is the same thing we always had. Yes, we never had something in the size of the Vistaprint specific deal, but we have a lot of this. We have lot of partnerships in the past that were very similar to that, and they have been working for us. And of course, like everything else that is working for us, we invested there. Vistaprint is a similar thing that hey, even Company that used to be competitors of WIX are joining. So, this consolidation, now that this is happening around our product, which is a very good sign. However, in the past issues to always happen, which smaller and smaller companies, and bigger and bigger companies, and the place, we felt it's really what we should do is break it out.

That's really helpful and then on the agency side, just to clarify, when you say 90% growth there, you're specifically talking about agency so that, that is X B2B and then you noted a bunch of the products that are helping support the growth there. You've highlighted in the past and specific numbers around Editor X, and uptake there. Anything you could share on Editor X and the growth you're seeing around that? Thanks.

Of course. So, I think that -- we're very happy with the direction, and there are two reasons, right? On itself is going fantastically fast. And 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, so we can build different design to every different solution that actually knows how the dynamic move, and by the its own CMH, own programming language databases, and of course, all of the business stack that WIX sells, and that way, to me, there's nothing ever similar to that. And this is going to be into really fast-growth. Data side of it, is that Editor X, because it's becoming a brand, and so many agencies are trying that. It also been to attract new partners to WIX, and a lot of them will not use Editor X for all the projects. They will use it for the big projects, special project, but they will use the classic editor. For the other part, they just wanted continuously -- very quickly finish and move to the next one. The combination, 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 Elliot 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 collection 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. So, 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. We -- very important to understand that also the mix of our customers change and is keep on changing. We see more businesses type of customers will actually contributing more to the overall ACPS. So, I believe that this is something that we will continue to see increasing also next year. By the way just on a side note, the B2B partnerships are the businesses. Because when you think about those kinds of partnerships, usually it's businesses going to those partners and build a website with them and using all kinds of services. So, they're actually mostly businesses.

Great. Thank you so much.

Thanks for the question. It was best from 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.