Wix.com Ltd ((WIX)) has held its Q4 earnings call. Read on for the main highlights of the call.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
Wix’s latest earnings call delivered a strong sense of optimism, as the company celebrated significant achievements in 2024, with impressive growth in both bookings and revenue. The positive sentiment was underscored by the attainment of the rule of forty milestone ahead of schedule, driven by successful product initiatives in areas like AI and Studio. Despite challenges such as foreign exchange volatility and slower-than-anticipated GPV growth, the company’s achievements far outweighed these hurdles, painting a promising picture for investors.
Rule of Forty Achieved
Wix has surpassed its ambitious plan to achieve the rule of forty by 2025, reaching this milestone a year earlier than anticipated. This strategic achievement lays a strong foundation for future growth, as the company now sets its sights on reaching the rule of forty-five by 2025.
Strong Bookings and Revenue Growth
In the fourth quarter of 2024, Wix reported an 18% year-over-year growth in bookings, with partners’ revenue increasing by 30% year-over-year. The company’s total revenue surged by 14% year-over-year, reaching $460 million, highlighting its robust financial performance.
AI Product Suite Success
Wix’s AI product suite has been a game changer, significantly enhancing conversion rates and purchasing behavior. Notably, over one million websites have been created using the AI website builder, showcasing its widespread adoption and effectiveness.
Positive Free Cash Flow and Profitability
Wix achieved remarkable financial efficiency, generating a free cash flow of $488 million or 28% of revenue in 2024, nearly doubling from 2023. The company also reported its first positive GAAP operating income, marking a significant financial milestone.
Studio Platform Expansion
The Studio platform has witnessed strong adoption, with over two million studio accounts created, 75% of which were established by partners. This expansion underscores Wix’s strategic focus on platform growth and partner engagement.
FX Volatility Impact
Foreign exchange volatility late in the fourth quarter had a modest negative impact on bookings and revenue, resulting in a $45 million headwind expected for 2025. However, the company remains confident in its ability to navigate these challenges.
Challenges in GPV Growth
GPV growth was slightly below expectations due to situational factors, including the timing of the Christmas holiday and foreign exchange headwinds, which impacted transaction revenue.
Forward-Looking Guidance
Looking ahead to 2025, Wix’s leadership provided an optimistic outlook, aiming to achieve the rule of forty-five, surpassing initial targets. They project total bookings to grow between 11% and 13% year-over-year, despite an estimated $45 million FX headwind. Revenue is expected to increase by 12% to 14%, with a focus on enhancing product offerings like the Studio platform and AI capabilities. The company also anticipates a non-GAAP gross margin improvement to 70% and a free cash flow of $590 to $610 million, translating to a 30% to 31% revenue margin, underscoring their commitment to financial growth and innovation.
In summary, Wix’s earnings call painted a picture of a company on a strong growth trajectory, underpinned by significant achievements and strategic initiatives. The positive sentiment was driven by robust revenue and bookings growth, successful product developments, and a confident outlook for 2025. Despite facing some challenges, Wix’s forward-looking guidance suggests continued momentum and financial success, making it an attractive consideration for investors.
