Wix(WIX) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total bookings in Q4 2024 reached $465 million, an 18% year-over-year increase, driven by strong creative subscriptions and business solutions performance [34] - Total revenue in Q4 grew to$ 460 million, up 14% year-over-year, with partner revenue increasing 29% year-over-year to $168 million [35] - For the full year 2024, total bookings grew to$ 1.83 billion, a 15% increase year-over-year, while total revenue was $1.761 billion, up 13% year-over-year [38] Business Line Data and Key Metrics Changes - The self-creators business experienced steady revenue growth acceleration throughout 2024, supported by the AI product suite [10] - Partner revenue grew 30% year-over-year, reflecting success in capturing market share among agencies and strong adoption of the Studio platform [9] - Average bookings per subscription (ABPS) increased 13% year-over-year to over$ 294, driven by a shift to higher-tiered packages and increased adoption of business solutions [26] Market Data and Key Metrics Changes - The company exited 2024 with bookings growth of 18% year-over-year, fueled by acceleration in the self-creators business and sustained partner momentum [9] - The Q1 2024 user cohort generated approximately $61 million in cumulative bookings, marking a strong performance compared to previous cohorts [24] - Net revenue retention improved to 100% in 2024, indicating strong user engagement and retention [29] Company Strategy and Development Direction - The company aims to achieve the "rule of forty-five" in 2025, building on the success of its product initiatives [7][32] - New product launches planned for 2025 include solutions that expand design capabilities beyond websites and transformative tools for self-creators [14][15] - AI remains a central focus in the product roadmap, with plans to enhance user experience and drive growth through AI-powered tools [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to sustain growth momentum into 2025, driven by strategic initiatives and product enhancements [30][40] - The company anticipates strong FX headwinds impacting its 2025 outlook, but expects to maintain growth through effective cost management and product innovation [43][46] - Management highlighted the importance of targeting higher intent users to maximize lifetime value and drive bookings growth [22] Other Important Information - The company generated free cash flow of$ 488 million in 2024, nearly double that of 2023, reflecting effective cost management [39] - A $575 million convertible note is due in August 2025, which the company plans to pay down with cash [48] - The company completed a$ 200 million share repurchase program, repurchasing approximately 868,000 shares [49] Q&A Session Summary Question: Can you elaborate on the 2025 guidance and the components driving strength? - Management noted that Studio and AI are expected to contribute significantly to growth, with Studio accounting for about 50% of overall purchases [52][53] Question: How should investors view the premium subscriber growth opportunity? - Management emphasized that net subscriber growth is a secondary KPI, focusing instead on cohort value and long-term bookings projections [60][62] Question: Can you provide details on the new self-creator solution? - Management indicated that the new solution will allow users to expand design capabilities beyond websites, addressing the need for content adaptation across various platforms [66][68] Question: What are the expectations for free cash flow margin expansion? - Management expects gross margin improvement and operating expense leverage to contribute to free cash flow growth [120] Question: How is the top of the funnel looking at the start of the year? - Management reported positive trends in user acquisition and engagement, indicating a strong start to 2025 [122]