Wix.Com Ltd
NASDAQ:WIX
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
96.21
219.19
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Wix.Com Ltd
You don't have any saved screeners yet
Welcome to the Wix Q2, 2020 Earnings Call. My name is Richard and I'll be your operator for today's call. At this time all participations are in a listen-only. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is being recorded.
I'll now turn the call over to Maggie O'Donnell, Director of Investor Relations. Maggie, you may begin.
Thank you, and good morning, everyone. Welcome to Wix's second quarter 2020 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 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. You can find all reconciliations between our GAAP and non-GAAP results in our press release, presentation slides and shareholder update, and our Interactive Analyst Center on the Investor Relations section of our website, investors.wix.com.
With that I will now turn over the call to Avishai.
Good morning, everybody, and thank you for joining us today. Q2, we've great results and then I think one thing that really happened is that a lot of our investment in 2019 and 2018 and creating products like Ascend, Wix Payments have all combined together, right, with the Corona, and created this perfect storm of growth.
In fact, the best way to measure our growth is looking at the cohort, our subscription business, looking at how the cohorts itself has grown. And as far as we can predict, the growth of Q2 cohort compared to last year Q2 is around 90% into value, which means that the growth rate of Wix is 90% higher than it was last year.
And really, this is something that has happened, because all of those elements have compounded themselves, and then creating a massive growth and then having even more growth because of Corona. I think this is really establishing a new baseline for our business.
Of course, because of a lot of those opportunities, we put a lot of investment into support, to support all the new customers and a lot of investment into marketing. And so we have a lot of really what we consider to be very profitable opportunities in marketing.
And the other thing we can say is that if you look at the globe in countries where Corona is stronger or became weaker, luckily, we're seeing that growth is not changing, at least, June, July, or pretty much in the same rate.
I want to take this opportunity also to thank the Wix team. Obviously when company grows so fast, there's a lot more that everybody has to do, in order to support our customers. This is a really important time for our customers, as their business became so much more depending on the internet.
In fact, in many cases, that's now the only avenue of business possible. And really, I want to say thanks to everybody, that put so much effort and so much care into protecting our customers and supporting them in these hard times.
And with this, I want to thank you and bring it back to Maggie.
Thank you, Avishai. Operator, I think we're ready for our first question.
Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question on the line comes from Mr. Mark Mahaney from RBC. Please go ahead.
Thanks. Two questions. Could you talk about sales and marketing efficiency in the quarter, look like the sales and marketing increased somewhat materially as a percentage of collections?
And then secondly, could you just double click on some of the e-commerce solutions that you've been rolling out recently? How well developed are they? What kind of traction are you seeing for them initially, that's an extremely powerful current in this environment, e-commerce enabling technologies? Talk about how well-positioned do you think Wix is for that opportunity? Thank you.
Thank you, Mark. I will start with the first question about the marketing. I think that the things about the marketing, I think this is like the most amazing thing that happened to us in the second quarter. And you're absolutely right. Our marketing investment has increased by -- I am talking about the direct marketing investment by about 90% on a year-over-year basis.
And by the way, with the same efficiency, with the same KPI, with the same model as we always had. And this is like a very, very interesting effect. It was very quick and aggressive response of our marketing team that actually in few days managed to increase the marketing so significantly to answer the demand, and still being with the same efficiency as we were in the previous quarter. So, we actually took the opportunity and we did it.
And talking about the efficiency to-date, we've already collected about 60%, even more than 60% returns overall investment in marketing. I think that the way actually to look at it, and I wish I mention that, that the future collection of the second quarter cohort and the growth of it is about 90%. Well, this is the pure true growth of Wix during the second quarter and basically tells the entire story, which is very similar to the growth in marketing expenses. So, I think that is answer your question about the efficiency of the marketing.
Obviously, we will continue to invest. We look at it as a new baseline of growth and investments. And you know, we are very, very excited and happy to continue with that.
I want to add, I don't know if you've said it, but 60% of marketing expenses that happened in Q2 have already been returned in cash back two weeks, right? So we think that this is an amazing efficiency where a subscription based company usually takes those things just a bit longer.
So, we're very happy about the marketing efficiency in this quarter.
Hey, Mark. It's Nir. In regards to e-commerce, I think, first of all, I think that it's interesting because we have a wider view on commerce, besides only stores. Naturally, our store solution grew significantly, I'm going to talk about it. But when we think about the opportunity around commerce, we think of everything that our platform has to offer. So it will also go towards the restaurant owners and the photographers and musicians and the bookings and events are now mostly online, but also events, and also naturally, the stores themselves.
To that effect, much of the additions on functionality to our stores portfolio that you've seen, and we've advertised. It's been going on and then we've been working on it prior to the Corona crisis starting. Some of them were actually released prior to that. But naturally, we think it's a huge opportunity.
And what happened I think during the end of Q1 and Q2 with this huge shift of people moving online, and obviously I mentioned this, we strongly believe and we're actually already seeing evidence to it in different countries, that this is not a onetime shift. It's a new baseline. So in our mind, what we see now is something that wouldn't happen over many years that just happened overnight.
And to that effect, we think that our cohort solution coupled also with experiments and just the ability for people to come in and onboard really quickly, start selling their services, whatever they are, whether they are services or good are going to play a huge part in the value that we deliver to our customers. Obviously, we want to be -- had a very positive impact on us as a business.
And you wanted also to say what's the growth percentage on e-commerce. And by the way, I think that one of the things that we are seeing that across all of the e-commerce enabling transaction growth is over 100%.
Great. Thanks for your question Mark. Can we have the next question please?
Thank you. Our next question on the line comes from Mr. Ron Josey from JMP Securities. Please go ahead.
Great. Thanks for taking the question. Just a quick follow-up on the marketing side. Avishai and Nir you just talked about the permanent acceleration in the business activity. And just with marketing accelerating here in the back-half of the year, I think you said similar spend in 3Q and 4Q as you did for 2Q. Can you just talk about maybe where you plan to focus the marketing? And what you -- if you look to get sort of similar results, as you did in 2Q in terms of registered users, subscriptions and things along those lines.
And then any insights on quarterly trends and subs, I think would be appreciated. I think you in April, it was talked about sub-additions grew around 200% for the quarter. They grew 164%. You saw a good conversion rate, I think for net registered users, but any insights on quarterly trends would be helpful? Thank you.
Sure. So, I'll start the first question and Lior will jump in. I think generally what we're seeing in terms of the acceleration is as you know, it's across the board and under the similar the same kind of verticals and businesses that we've seen before, just at a much higher demand with better conversion and a huge intent towards going into business.
We have actually, and I think Avishai mentioned this also in his opening remarks. We're seeing in July very similar behavior to what we've seen in Q2. So, we believe at least for the time being, that that's going to last for the second-half of the year in similar manners. Lior?
Yes. So, as Nir mentioned, I think that we continue to see the trends in July. I can tell you that July net ads have increased by more than 200%. So, actually, we saw more net add in July than April as a number. So very, very excited about it.
And as I mentioned, I think that we are -- the way that we look at it is a new baseline. And obviously, we will continue to invest in marketing. As you know, it's not going to be so smart not to do it, because it's so efficient.
And remember when we have such a huge increase, that's happened in few days, usually it's happened like over a few years. So every time we increase the investment in marketing, we see the response in topline and so on. This time, the increase was happening in few days. We increased marketing by 90%. Obviously, we've seen the same increase in the value of the quarter, but as any other SaaS model, we first invest the marketing and it's expense in the P&L, then we see collection then we see revenue.
Obviously, to your question, in the next couple of years, I assume that we are going to generate much more free cash flow and profitability, as a result of this huge growth that we have right now.
Thank you, Lior.
Thanks, Ron. Can we have the next question please?
Thank you. Our next question online comes from Ygal Arounian from Wedbush Securities. Please go ahead.
Hey. Good morning, everyone, and thanks for taking the question. I want to talk about the agency push, maybe get a little bit of color on traction you're seeing there. And tying that in as well with the new e-commerce solution, how that could open up the agency opportunity. That's kind of what I mean by that is, that's a bit more focused on design agencies. As an e-commerce solution could broaden that e-commerce agencies typically.
When we talk to e-commerce agencies, the solutions we hear about the most are Shopify, Magento and BigCommerce. So is the e-commerce solution kind of intended to open up that market for you? And then at the same time, maybe we would love to hear a little bit more about Editor X, you mentioned pricing in the investor letter. Anything you could share around pricing and the traction you're seeing with Editor X early on? Thanks.
Ygal, it's Nir here. I will fill up with the agencies and the partners. So, generally we're seeing a very high performance in this whole sector. And it kind of makes sense, because the huge demand and the growth and then the 90% value we're seeing at the core is so connected to this huge demand. But as I said before, we've seen it across the Board, both in the people who are looking for to do each of themselves, but also with people who would like somebody to handhold them or help them do it for them for a fee.
It that aspect, we've seen also a big uptake in the business flowing towards our partners. And in fact, I don't know, you guys remember, but we used to have a marketplace called the arena, now we just call it a Wix marketplace. It's a place where demand of people, who need somebody to help them out and build the website for them is being met by our partners community.
We've revamped that platform significantly in many capabilities for both sides of the marketplace, and we're seeing really great traction going there as well. So, I think that we're going to keep on seeing that for the second-half of the year. And naturally, in relation specifically to agencies that build commerce sites, yes, absolutely. As we add more functionality and more capabilities, we allow them to do more on our platform.
Will that mean that some of them will choose us over competitors? I think that, absolutely, in some cases, yes. It all depends on what are the additional values that people are looking for. But I think when we add the coding environment, we're adding Editor X, as a really deep capability into building a very sophisticated website.
When you add that to all of the CRM capabilities of Ascend, the Payments, it's all bundled in one place, and then that's a real big value proposition. So, we definitely assume that some of those partners and agencies that deal specifically with commerce will adopt Wix as the solution. Avishai, do you want to talk more about how Editor X?
I think that you covered the question, right? And I think that Editor X is really aimed at the higher end agencies and the people that build mostly a lot of really sophisticated projects. It's a professional tool, and if Wix is mostly for everybody, and we have designed using that Editor X really aimed at the agencies and developers. So, it's a very separate brand, and I think very different kind of customers. At least, that's what we're seeing from the beta. And we're very happy about it, because I think it allows us to give a complete solution to another big part of our addressable market.
Well, I'll just say about the pricing tool, I think interesting thing is, first of all, obviously, when we try to determine the pricing, we looked and tried to look at other kind of solutions that offer a solution for the professional crowd. We spoke with the customers themselves, obviously, we looked at other companies. We look at what Adobe does on their cloud. And we came to think is great value for what you get in Editor X.
We have something that nobody else does, which is we kept the premium offering, which in our minds is very, very strong. We introduced this new pricing relatively lately. So, we still cannot talk towards the specific numbers and results. But, we are very happy with what we're seeing in terms of the adoption.
Great. Thanks, Ygal. Can we have the next question please?
Thank you. Our next question online comes from Deepak Mathivanan from Barclays. Please go ahead.
Hey, guys, thanks for taking the questions. Two questions. First one, given the success you've seen with e-commerce and other offline businesses come into the platform. Can you provide an update on where the GMV is right now on the platform? And what the penetration is for Wix Payments at this time?
And then second question Lior, what are you factoring in terms of TROI and sub growth into the 3Q guidance, compared to a 2Q levels? I mean, you have seen pretty nice tailwinds over the past few months, some of that could moderate over the next few months in the back-half. Are you expecting some efficiencies on marketing to moderate, while you keep marketing spend at current levels in the back-half? Thank you.
Maybe back. So, in terms of Payments penetration, we're seeing a very wide adoption of it. So, over 80% of the eligible newcomers in terms of the territories are picking up Wix Payments. And I can say that generally in terms of the of the geographies Wix Payments is very diversified, so not focused only on one place.
So, we're seeing a really nice uptake there. We're still not breaking apart specific numbers around GMV. But we'll probably do that in the future.
Deepak, this is Lior. With regard to the TROI and investments in the third quarter guidance, I think that look, we provided the range for the guidance, which basically take into our consideration, the uncertainty. But I think that for the third quarter it is very small. This is why we've chosen to provide the guidance for the third quarter.
The way that we actually look at it is, is a new baseline with the same TROI, as of now, it's basically, continues with the same KPIs, with the same efficiency, as we've seen in the second quarter. And SaaS growth is actually stronger in July than the second quarter in average. And I think that the most important thing, the way to look at it is the value of the cohort, which actually continue with its strengths. Again, I want to emphasize the fact that the second quarter generates a 90% growth in the new cohort, which the way that I'm looking at it is like a new baseline, with amazing growth. And this is like the real pure growth of the company during the second quarter. We obviously expect that to continue to the third quarter as well.
Thanks, Deepak. Can we have the next question, please?
Thank you. Our next question online comes from Mr. Nick Jones from Citi. Please go ahead.
Great, thanks for taking the questions. One, as on the press release, you introduced Facebook advertising to Ascend and there's ad scale integration with this kind of e-commerce solutions. Can you talk a little bit about what type of kind of additional advertising capabilities you're potentially looking to add for current subs and future subs? Is that an area that we should look for additional investment? Thanks.
So currently, -- this is Avishai. And if I understand the question, you’re asking about what tools we give our customers to market their business, is that correct? So Facebook ads is the only place we are actually in active way managing the advertisements of our customers, right? We use AI to do that. And we might expand the traditional platform.
However, and one of the things that we do is that we support pretty much every advertising platform that you have. And we help our customers to have the right material and content to put on those platform, which is usually the harder part. And for example, if you want to have advertised videos, right, we have AI-based system that will create videos that we know are very efficiently marketing for you to put on YouTube, to put on Facebook, to put in any other player to support video advertisement.
So, this is currently a lot of our focus. We also help you by closing the loop, which means that if you have a website, we help you. Track who has arrived, allow you to open a chat with them. And we allow you to send them a notification if they're [Indiscernible]. We allow you to pretty much close all of the loop in order to facilitate a better return on your business and then track it all with the Wix Ascend.
So that's going a focus. And with the exception of Facebook ads where you just put money and we do everything automatically for you.
Great. Thank you.
Thanks, Nick. Can we have the question, please?
Thank you. Our next question online comes from Mr. Lloyd Walmsley from Deutsche Bank. Please go ahead.
Thanks for taking the question. First, can you talk about where you are in terms of gross margins for Wix Payments? When you see the large pick up in volumes, our gross profit margins getting closer to sort of a normalized rate for Payments business. Do you have anything you can tell us about where it is today? Where it'll get to in the next few years would be helpful?
And second one, shareholder letter, you're talking about expanding the customer care team. Can you just give us a sense for how revenue returns have been from the customer care team? What, aside from kind of a pickup in volumes, is informing the decision to kind of expand that? And how much we should be thinking about you guys spending over the next few quarters and years on care? Thanks.
Okay. So, we’d start with the first and second question, Nir will join me to explain some of the trends that we see about the customer care.
With regard to the Wix Payments, you're absolutely right. The gross margin has improved dramatically in the second quarter because of the scale. I believe that we have more room to improve it over time, our scale continue to grow, but obviously we are learning more stuff and improving it. I think that right now, when we are looking at the gross margin of Payment is approximately 30%. But again, I believe that there is more room to increase it.
And overall, the business solution is interesting. I think that we are going to see more payments, topline coming in the next couple of years. But at the same time, we're going to introduce more functionalities, more services that are going to contribute to the gross margin of it. But I do expect that to continue to improve. And again, the second quarter was truly quite significant improvement.
With regard to the customer care, we were very lucky to increase the headcount of the customer care before, in order to answer that the huge demand and you can elaborate about it. But we intend to continue with that, because obviously, when we are serving right now for more than 180 million users, and we are growing by 9 million users every quarter, this is something that we need to take care of, and obviously, to provide a good service to our customers, as we always did.
And we already started to see the benefits of it. Remember, when we are talking about the growth of Wix, in the second quarter and going into the second-half of the year, obviously, it was well returned in terms of the investment. Nir, do you want to elaborate more about it?
Sure. So, as Lior mentioned, just imagine where we would have been now, had we not made that investment last year. So naturally, the gains we might have even gained from this investment so far, not exactly as we planned to begin with, because we had this surprise of COVID-19 coming in and reshuffling our program. But obviously, we are very happy that we made that investment because it allowed us to meet that huge demand and that huge spike of new growth coming from these new cohorts, that again, I remind you, it's not only that they are much, much bigger in size, the intent of the people who are joining us is much higher towards building a website, adding their business online, running their business online. So, naturally, we need to be able to support that and support that in high quality.
I think coupled that it also people who are building things that are much more complex now on Wix, on the stores and with the partners. So, naturally having high -- a big size qualified care organization is very, very important.
Our belief is that, since the growth is sustainable, so will be the additional investment we're going to do into care. And that will also be matched with the approach that we spoke about in the past, which we have not -- we are still training and working on that will also allow us to get even more value coming from just speaking and working with our customers proactively.
Thanks Lloyd. Can we have the next question, please?
Thank you. Our next question online comes from Josh Beck from KeyBanc. Please go ahead.
Thank you for taking the question. The thing that really stood out to me was the collections growth, and that's accelerated to pretty much a low 30% level in Q2 and Q3. In the shareholder letter, I know that you mentioned, you're seeing a higher mix of annual and multiyear contracts.
So, I guess my higher level question is, do you see this as a structural change that you expect to remain in place? And, at what point do you think this elevated collections growth can translate into revenue growth?
So, yes. So now we think that this trend will continue, at least, for the second-half of the year. It's really hard to tell beyond that, but I believe that this is something that will continue the second-half of the year. And, yes, I mean, business need longer-term solution, so obviously, most of them are choosing the nine monthly the yearly the two years plans. And obviously, we're really, really happy for that.
And with regard to the revenue, remember that, once we collect the yearly plan, then we need to recognize it over the year, meaning every quarter and so on. So, I believe that in the second-half of the year, we are going to see that deferred revenue is actually increasing to reflect the change between revenue to collection, because collection are going to grow much faster than revenue. But eventually it will be catching up. It might take one year or two years but it obviously will catch up. And then you're going to see also the improvement in profitability in the GAAP P&L. It's already going to happen next year. So, yes, I mean, the same trends continue and it looks really, really good.
Okay, thank you. And if I can just sneak in one more on the net subscription addition. So, I know in April, I believe it grew 207% and then for the full quarter it grew I believe 164%. So, it seems like it did moderate a little bit in May and June, but it sounds like July was quite strong. So any other color you can just give us on the progression of net add growth, and then help us think about conversion from existing versus new customers.
Hey. So, I think generally speaking, there's always some change in mix and seasonality and things like that. But from a wider perspective we keep on seeing a high number of net sub adds. Also in July, as mentioned and we kind of highlighted this also in the PR that just the first-half of this year has already reached almost the same number of net adds subs of '19.
So naturally there's a -- you can see a very clear a high acceleration there. And the acceleration is coming both from the new cohorts, but also from the existing cohorts. Meaning that everything is accelerating and performing better. Because and it kind of makes sense, it's being driven by the COVID-19 crisis on the financial side of it. And old people whether they were Wix's users before it started or after have a need to move online. And that's also why you see that kind of acceleration.
And I think the other thing that is worth mentioning obviously is that, we see the huge increase both on the net subs but also on the cohort value itself. So, I think both of them coupled together means that we can look ahead into elevated growth definitely in the second-half and probably much further.
Thanks. Can we have the next question please?
Thank you. Our next question online comes from Mr. Brad Erickson from Needham & Company. Please go ahead.
Hi, thanks. Just a couple follow-ups. First, I guess when your sales force is talking to agencies about Corvid what are the areas of pushback? If there are any, why they wouldn't use Corvid versus say other competing solutions? And then just a follow-up, just within business solutions. Can you give us any flavor of relative growth rates, maybe a rank order between Payments, G Suite and then Ascend? Thanks.
So this is Avishai. I think what we mostly hear about Corvid is that, it needs a relatively more stability for many developers to work at once and together in some debugging tools. And these are the things that we'll be addressing in the next six months. Hopefully, get you to a point that it is solving the pains and actually providing some benefit to our customers.
And for question number two, you want to take it?
Yes. With regard to the growth, although, G Suite is the largest component in our business solution. The Payments is growing faster -- obviously, really, really faster and also Ascend. I think the way to look at it if G Suite usually will continue to grow the same level as creative solution growing. But we are going to see Payments growing much faster in the future. The same goes for Ascend.
Great. Thank you. Can we have the next question please?
Thank you. Our next question online comes from Mr. Jason Helfstein from Oppenheimer. Please go ahead.
Hey. Thanks, guys. So I'm going to ask, it seems to be the biggest question right now is given comments about cohort strain, record user and premium ads and collections per sub acceleration in the quarter. Why isn't the third quarter collections guidance stronger? Is there a specific headwind that you want to call out? Is it shift to the new cohorts, lower price plan? I just think everyone's looking at the guidance and just obviously, this was a stellar unbelievable quarter, why the collections guidance is not stronger? Thanks.
Yes. So, Jason, this is Lior. So first of all the guidance for the third quarter is 31% to 34%, when you compare the 34%, obviously its higher than the growth of the second quarter. And look, you are right. There is some uncertainty about the third quarter that obviously -- and we've chosen to provide the guidance for the third quarter, but we also need in a way to be also a little bit conservative about what is going on right now in the world. So it's obviously taking it into account.
If everything is good, and everything is happening, everything continue the same way, especially around everything that we do right now, obviously, there is an upside to the third quarter. But at this point of time, we feel very comfortable with the guidance that we provided.
So, to the extent that there could be, I guess you'd say like macro factors like, why would that be? Are you worried about like, for all the new businesses coming online, all customers canceling? I mean just maybe be more specific, what that concern or what the downside scenario could be relative to the upside?
I think we're mostly afraid of what world leaders would do. We don't -- like COVID is -- Corona is something that we didn't expect. And we saw that in different parts of the world there were different kind of reaction to it, and with different level of efficiency. And the one thing we're not sure about, more than anything is our world leaders will obviously resolve the economy obviously, more stimulants need to support the populations in a lot of the countries. And it's very hard to dissipate.
It's kind of like e-commerce, [we continue to do a lot of -- people 0:38:31] building e-commerce enabled sites. You need customers, right? Those customers need to have money. So kind of like, we feel it's very uncomfortable, and not knowing what would world leaders will do. That is the reality of our biggest fears. Not to point to any specific country, beyond others as being less predictable.
Thank for your question, Jason. Can we have the next question, please?
Thank you. Our next question online comes from Mr. Ken Wong from Guggenheim Securities. Please go ahead.
Great. Thanks for taking my question. I just wanted to touch on your investments in the customer care organization, it looks like you guys are going to expand that out to Denver. Previously, that investment was to generate about 5 points of incremental growth. I'm just trying to get a sense for kind of where we are on in terms of progress there? And then whether or not this expansion should also deliver some incremental growth?
Okay. So the fact that when we look at the growth of the second quarter or what will be the growth for the full year, compared to where we were back in February? So obviously, we managed to deliver growth, which is higher than 5%. But we managed to do that only because of the headcount that we have in support, meaning that without it, it was obviously really, really hard to deliver this growth.
So we will continue to do that, because we see that we are having more and more demand for our product. So obviously, we need to continue to invest in our support. But again, I think that the return already has proven to be higher than what we actually predicted, because also time has changed.
Got it. And then if I could sneak in a quick question just on churn. Last quarter, you guys talked about in negative churn. Was that something you guys saw this quarter as well? And to the extent you did, any thoughts on how that trend might progress going forward?
Yes, I think that what we saw is that the past cohorts have actually added in more subs than we normally do, which is more than offsetting churn that was there to begin with. Now normally we're at a tiny bit of a negative churn. And actually it's growing and we're seeing that it continues at the same rate.
The rate of negative churn is improved, mean that even better.
Yes. So we are actually doing better, so less -- we have more new customers from past cohorts, then ever before.
Great. Thank you, guys.
Thanks, Ken. Can we have the next question, please?
Thank you. Our next question online comes from Mr. Brent Thill from Jefferies. Please go ahead.
Thanks. Were there any common themes from a geo perspective that you saw or the demand was common or is it pretty much across the board?
Pretty much, I would say pretty much across the board. Obviously we've seen, specific fluctuations around specific verticals in the U.S., in Europe. We saw some fluctuations when countries opened, reopened and reclosed again for specific verticals. But generally, we're seeing I think very high demand, especially in the U.S. and Europe.
Great. And I know you guys keep talking about the new baseline and the perfect storm. I think some investors are a little concerned, the sustainability and predictability of this storm that we're in. And beyond the July quarter and I know you're seeing good results, but what gives you conviction that this kind of continues even if we got a vaccine? Do you feel that the tailwinds are so strong, that, as you keep saying this is the new baseline, it doesn't really matter, what really happens in the healthcare side, this is really just the inevitable shift to online?
So, I think there's a couple of factors. The first factor is that we've seen a lot of the growth in the supporting products, and even pre-COVID right? And this is something that was enhanced during, but I think that there is no reason that it would not continue to grow after. So, that's probably the first part of it.
The second part of it is the countries in the world where you see that the pandemic has pretty much stopped, and that there is nothing that actually, [indiscernible] and people are very back to mostly normal. And we're seeing that the growth of those countries as stay the same as it was, now we don't know to predict if that effect will last for the next five years. While, we can say that every metrics that we have to do show that there's no reason that things will change.
Great, thanks.
Thanks, Brent. Can we have the next question, please?
Thank you. Our next question online comes from Sterling Auty from JPMorgan. Please go ahead.
Yes. Thanks. Hi, guys. You mentioned the multiyear, just wondering what percentage of the business was multiyear in the quarter versus what you've seen in previous quarters? And then when you look at the conversion to premium subscriptions, especially given that huge number of new registered users, how would you characterize the conversion rate? Were you happy with it? And what do you think can happen to that conversion rate as we look here to the back-half?
Hi. Sterling, this is Lior. So, in the second quarter, the nine months we were up about 72%, which is higher than the past. It usually was around 68%. With regard to the conversion rates, so it's actually increasing the thing that we mentioned that also last quarter, but it's actually continue.
Yes. And Sterling, when you think about conversion, usually we need to think about two factors, right? One is the product itself, whether it answers that user's needs, and whether they are blockers that have stopping the user from being able to do what they want to do, in terms of the anything environment itself.
And second is whether they can achieve what they want it to do in terms of the business functionality. And third, I would say is the intent how high of the intent the user had when they got to us, that will actually get them to finish your website and then move to a premium.
I think what we've seen in about four or five months, is that all of these are our own updates. So, the product obviously is in our control, and we've been improving it significantly. You've seen the wide list that the team put together in the shareholder update. But also, we've seen a huge increase in terms of the intent of the users that are coming in, and obviously has much bigger need. So that comes with the higher intent.
Got it. Thank you.
Thanks, Sterling. Can we have the next question, please?
Thank you. Our next question online comes from Naved Khan with SunTrust Securities. Please go ahead.
Yes. Thanks a lot. I've couple of questions. So, maybe just on the customer care expansion, do you have an inclination to do it more in-house versus using an outside or outsource provider? And then can you maybe just talk a little bit about the promotional intensity? How are you pulling on the promotion lever as you increase your marketing spend 90%?
Hey Naved, it's Nir. I'll take the first one. In terms of customer care, we believe that going forward, not immediately, but going forward, we really prefer the in-house approach to anything else, just because we deem customer care to be a critical core function of the business. And there's one lesson which we learned throughout the Corona is that we want to be able to control it. It doesn't mean that we will not work with third parties and with third-party vendor, but we definitely going to see also growth on the in-house solutions that we have there.
There's a promotion. So we know that, we always adapt and test and change our marketing activities based on the data that we have, the performance of it. Naturally, with a big shift and change in the cohorts and the size of the cohorts, and we're testing in new and different approaches all the time. We will not share more than that, obviously, because we never shared too much on the marketing side and how we do it.
Got it. Thank you.
Thanks. Operator, I think we have time for one last question.
Thank you. Our last question comes from Jonathan Kees from Summit Insight Group. Please go ahead.
Great. Thanks for squeezing me in guys, and taking my questions. I wanted to ask about just pricing in general for the premium. I guess, part of the promotion as part of your efforts to sign up new subscribers, did you provide any discounts to new subscribers or even to the partners? Any advance payment fees in that area? Last quarter you talked about you paused price increases. I'm assuming that's still the case now. And did you even cut into that for Q2? Thanks.
Yes. So to the first question about discount, when we do promotion, we do provide discount to the customers, for newcomers. And sometimes not just to newcomers, but it's really depends on the testing, on the country and what kind of promotion we want to provide. But obviously, it's based on certain terms. For example, only to annual subscription and so on. So this is something that we do.
And we mentioned before, we do our promotion based on many test, and we adjusted based on the size of the cohort and so on.
And with regard to the price increased, it is still paused, and so nothing new happened there.
Okay, great. Thanks for the color. Good luck, guys.
Thank you. I'd now like to turn the call over to Maggie O'Donnell for closing remarks.
Great. Thank you, everyone, for joining us today. We appreciate your time. And we look forward to speaking with you again soon. Have a good day.
And thank you, ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.