Wix.com Ltd. Q4 FY2024 earnings call

• Achieved rule of forty milestone a year ahead of plan and aims for rule of forty-five in 2025. - Bookings growth of 18% in 2024, fueled by self-creators and partners. Partner's revenue grew 30% year over year. - Over two million studio accounts with 75% created by partners. - Introduced AI website builder, new self-creator products launching in spring and early fall 2025, and new partner products. - AI remains a major part of the roadmap with products like AI Site Check, AI assistant in business manager, and marketing agent. - Q1 2024 cohort had $61 million in cumulative bookings, ABPS increased 13% to over $294, net revenue retention at 100% in 2024.

In Q4 2024, partners revenue grew 29% year over year to $168 million. For the full year 2024, partners revenue grew 30% year over year. The self-creators business saw steady revenue growth acceleration through 2024 driven by growing tailwinds from the AI product suite. Partners revenue contribution in Q4 was a significant portion, and the self-creators business contributed to overall revenue growth through AI-driven initiatives.

• 2025 as-reported bookings expected $2,025 - $2,060 million, up 11-13% y/y; constant currency bookings growth 13-15%. - 2025 as-reported revenue expected $1,970 - $2,000 million, up 12-14% y/y; constant currency revenue growth 14-16%. - Q1 2025 as-reported revenue expected $469 - $473 million, up 12-13% y/y; constant currency growth 13-14%. - Anticipates FX headwinds in 2025, factoring almost no contribution from new 2025 products into current outlook.

• FX volatility starting mid-Q4 2024 and continuing into 2025, impacting the 2025 financial outlook.

Q: About 2025 guidance and acceleration over the course of the year, and premium subscriber growth A: Lior Shemesh discussed that Studio is a major contribution, AI impacts conversion increasing through the year, and deemphasized net net subs as a KPI focusing on cohort value instead, with the ten-year projection of existing cohort bookings value increasing.

Q: On self-creator solution expanding design beyond websites A: Avishai Abrahami explained the motivation is addressing users' need to push website content to other formats like Instagram ads, leveraging Wix's core capability of simplifying complex user interface creation processes with AI.

Q: About AI agents, Studio efficiency A: Avishai Abrahami talked about AI agents like the customer website chat and marketing mastermind on websites showing promising results, and on Studio, agencies find it streamlines website creation, allowing better-looking websites and increased efficiency.

Q: About Studio and GPV A: Avishai Abrahami said the Studio editor roadmap is exciting with ongoing development, and partners' GPV continues to grow, with their portion of the pie surpassing 50% and expected to continue increasing.

Q: About self-creator growth and AI strategy A: Lior Shemesh mentioned not modeling double-digit self-creator growth in 2025 but believing it can be achieved in 2026 with new products, and Avishai Abrahami discussed AI as a key enabler for Wix to expand into new product categories and evolve website functionality over time.

Q: About free cash flow margin expansion and top of funnel A: Lior Shemesh talked about gross margin improvement and operating expenses leverage contributing to free cash flow margin, and Nir Zohar mentioned positive trends in the top of the funnel with strategic marketing towards high-intent users and indicators like net revenue retention and ABPS increase