Q4 2023 Wix.com Ltd Earnings Call

February 21, 2024

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Okay.

Operator: Good day, and thank you for standing by. Welcome to the Wix Q4 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Speaker Change: Good day and thank you for standing by welcome to the Wix Q4, 2023 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 to ask a question. During the session you will need to press star one on your telephone you will then hear.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Emily Liu, Director of Investor Relations. Please go ahead.

Speaker Change: An automated message, causing that your hand is raised to withdraw your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your Speaker Emily Liu Investor Relations. Please go ahead.

Emily Liu: Thanks and good morning everyone. Welcome to Wix's fourth quarter and full year 2023 earnings. Joining me today to discuss our results are Avishai Abrahami, CEO and co-founder, Nir Zohar, our President and COO, and Lior Shemesh, our 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 included 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 and key operating metrics. You can find all reconciliations between our GAAP and non-GAAP results in the Earnings Materials and in our Interactive Analyst Center in the Investor Relations section of our website, investors.wix.com. With that, I'll turn the call over to Avishai.

Emily Liu: Thanks, and good morning, everyone welcome to Wix, its fourth quarter and full year 2023 earnings call. Joining me today to discuss our results are obviously other hanmi CEO and co founder Nir.

Emily Liu: Zohar, our president and C O O and new York's finish our CFO.

Emily Liu: During this call we may make forward looking statements and these statements are based on current expectations and assumptions. Please consider the risk factors included 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.

Emily Liu: 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 and in our interactive Analyst Center on the Investor Relations section of our website investors <unk> dot com with that I'll turn the call over to RBC.

RBC: Thanks, Emily and good morning, everyone.

RBC: 2023 was a milestone year for weeks, we maintain our leadership position as the <unk>.

Speaker Change: Go to web creation platform for any user.

Speaker Change: <unk>.

RBC: [noise] grew market share for the best in class innovation execute it successfully.

RBC: Key initiatives and achieved strong growth with record profitability.

RBC: The incredible progress we made this year position us to accelerate growth in 2024.

RBC: And we now expect to exceed the targets applying a different use plan.

RBC: We provided at the analyst day.

Lior Shemesh: Lior, we work for the deep, around our updated expectations in a few For me, 2023 will be remembered as the year of a pivotal advance in our product suite. We started off the year labelled by others as a company facing potential AI disruption. Since then, we believe we've proven ourselves, not only to be.

RBC: Leo we walk through the details.

Leo: Our updated expectation in a few minutes.

Leo: For me 2020 free will be remembered as the year.

Leo: Pivotal advanced in our product suite, we started off the year.

Leo: Labeled by others company facing potentially disruption since then.

Leo: We believe we've proven ourselves not only to be.

Avishai Abrahami: A beneficiary of Broader Advice but also an AI leader among, we have spent the past eight years developing and embedding AI technology in our product. The University of Georgia College of Agricultural and Environmental Sciences, UGA Extension Office of Communications and Creative Services. We have meaningfully extended an already impressive toolkit of AI capabilities to include new AI-powered features that will help Wix users create visual and written web content more easily, optimize design and content, write code, and manage their website and businesses more. The key I products introduced in the last year include an AI chat for Businesses, Responsive AI Design, AI Code We have also recently released our AI side generator and have heard fantastic feedback so far.

Leo: [laughter] beneficiary.

Leo: Where does that investment.

Leo: But also in AI leader among peers.

Leo: We have spent the past 80 years, developing and embedding AI technology in our product.

Leo: Well, it's a gross up of operation this year.

Leo: We meaningfully extended an already impressive took it to say I capabilities to include new AI powered features that will help wix users create visual.

Leo: And Rick in web content more easily optimize design and content right.

Leo: <unk> quote and monitor their website and businesses more efficiently.

Leo: Yeah.

Leo: Products introduced in the last year include an AI chat experience for businesses responsive AI design AI quota system.

Leo: That creators and AI image creators among several.

Leo: Other AI design tools.

Leo: Also recently released our AISI generators and have heard fantastic feedback so far I believe this will be the first AI tool on the market.

Avishai Abrahami: I believe this will be the first AI tool on the market that creates a full-blown, tailored, and ready-to-publish website integrated with relevant business, and applications based on user. Our technology has benefited all our users. With both site creators and partners having shown excellent engagement over the past year, in fact, the majority of new users today are using at least one AI tool on their web creation. This has resulted in reduced friction and an enhanced declaration experience for our U.S. customers, as well as increased conversion and improved monetization. We expect our AI technology to be a significant driver of growth in 2020 and beyond. We also leverage AI to improve many of our internal processes, especially Research and Development Velocity.

Leo: Today, it's a full blown tailored and ready to publish website integrated with relevant business application based on user product.

Leo: Our technology has benefited all of our users.

Leo: Bullshit creators and partners, having shown excellent engagement over the past year in fact, the majority of new users to date.

Leo: Using at least one AI tool underweight patient journey. This has resulted in reduced friction and enhanced declaration experience for our users.

Leo: Well as increased conversion and improve monetization, we expect our AI technology to be a significant driver of growth in 2024 and.

Leo: And beyond.

Leo: We also leverage AI to improve many of our internal processes, it weakness, especially research and development velocity. This include an opening 10 deployment platform.

Avishai Abrahami: This includes an open internal AI deployment platform that allows everyone at Wix to contribute to building AI-driven users. User features in Tandem. We also have a GNI-based platform dedicated to conversational assistants, which allows any product team at Wix to develop their own assistant tailored to specific user needs without having to start from scratch. We are able to develop and release high-quality AI-based features and tools efficiently and at scale. We expect AI to continue to be a major competitive advantage, as we build a product suite and more AI tools to make the web creation experience more frictionless for you, as well as help to improve operations.

Leo: Now for everyone at weeks to contribute to building guide driven users user features in tandem.

Leo: We also have a genuine I best platform dedicated to conversion of conversational assistant, which allow any product tweaks to develop their own assistant tailored to specific user needs without having to start from scratch with this platform. We are able to develop and release high quality AI based features into.

Leo: Most efficiently and at scale, we expect to continue to be a major competitive advantage for us.

Leo: We build our product suite and more AI tools to make web creation experience more frictionless for our users.

Leo: As well it is helping to improve operations. In addition to AI when made a huge step offering for partners. This year with the introduction of studio.

Avishai Abrahami: In addition to AI, we made a huge step in our offering for partners with the introduction of studio. A Cornerstone Partners Web Development Plot. Since August, more than 500,000 agencies and freelancers have created studio accounts. And we currently have more studio premium subscriptions than we expected to have. Most notable.

Leo: A cornerstone partners web development platform.

Leo: Since August more more than 500, thousands agencies and freelancers have created studio account and we currently have more studio premium subscriptions than we expected to have at this point, most notably nearly half of our studio costs were created by new partners, who had no.

Avishai Abrahami: Nearly half of our student accounts were created by new partners who had not created on Wix. This strong start is a testament to the trailblazing innovation of Studio and our success in winning market share amongst professionals and larger entities, with all the feedback. In our performance so far, I am confident that Studio World is our most successful product today since our initial investment in the professional market in 2019. We continue to see considerable momentum, with partners' revenue growing nearly 40% year-over-year in the most recent two quarters. This growth has been driven by the incredible strides we've made in building a best-in-class product tailored for agencies and freelancers, Mark. And we have no plans to slow down; there are a number of improvements and new exciting tools on the way for partners.

Leo: Not created on weeks before.

Leo: This strong start is a testament to the Trailblazing innovation of studio and our success in winning market share amongst professionals and larger agencies, which all the feedback and outperformance so far I am confident that studio, which is our most successful product.

Leo: To date.

Leo: Since our initial investment in the professional market in 2019, we continue to see considerable momentum with partners revenue growing nearly 40% year over year in the most recent two quarters. This growth is being driven by the incredible strides we've made in building a best in class products tailored for the agency and freelancers.

Leo: Okay.

Leo: And we have no plans of slowing.

Leo: A number of improvement and new exciting tools underway for partners, we expect to studio and our board.

Avishai Abrahami: We expect to invest in our broader professional product offering to be a meaningful catalyst of growth in the coming years. Looking ahead for 2024, I am excited to build upon the success of the past year. Thank you to the entire Wix team. It is because of you and your hard work that I'm confident that 2024 will be another year of incredible milestones and unbounded growth without me over. Thank you, Avishai.

Leo: Border professional product offering to be meaningful catalysts of growth in the coming years.

Leo: Looking ahead for 2024, I am excited to build upon the success of the past year.

Thank you for the entire <unk> team. It is because of you and your hard work that I am confident that 2024 will be another view of incredible milestone an unbounded potential we've got new over to you.

Speaker Change: Thank you I'll be shy.

Nir Zohar: I'd like to share a bit more about the business fundamentals underpinning the strong top-line performance achieved in 2023 and the primary growth drivers that we expect to accelerate to accelerate growth in 2023. The 2023 cohort performed extremely well and was among the strongest non-COVID cohorts in our history. Our Q123 cohort generated $60.4 million in cumulative bookings through its first four quarters.

Speaker Change: I'd like to share a bit more about the business fundamentals underpinning the strong topline performance achieved in 2023.

Speaker Change: The primary growth drivers that we expect to accelerate to accelerate growth in 2024.

Speaker Change: The 'twenty two 'twenty three cohorts performed extremely well.

Speaker Change: Among them the strongest non Korean courts in our history.

Speaker Change: Our Q1, 'twenty three cohort generated $64 million in cumulative bookings for the first four quarters.

Nir Zohar: This is the second highest level of cumulative bookings in this timeframe, behind only the Q1 2021 cohort, which benefited greatly from COVID tailwind. This performance is particularly impressive given the significantly smaller user base of the Q1-23 cohort compared to previous cohorts due to our streamlined marketing strategy, targeting higher intent users with lower amounts of acquisition marketing investment. Our success here is a testament to the scale of the Wix brand and the value our platform provides to users. This strong cohort behavior also demonstrates the solid fundamentals of our business, including steadily improved conversion and monetization. ARPS improved to more than $253 in 2023, up 10% year over year. This was driven by a continued mixed shift to higher tiered packages, higher pricing, and increased adoption and usage of business solution products as we continue to onboard higher intent and commerce-oriented users, particularly partners. Existing court behavior also improved compared to the prior year, demonstrated by net revenue retention increasing to 105% in 2023 from 102% in 2022.

Speaker Change: This is the second highest level of community bookings in this timeframe behind only Q1, 'twenty, one cohort, which benefited greatly from Colgate tailwind.

Speaker Change: This performance is particularly impressive given the significantly smaller user base of the Q1, 'twenty three cohort compared to previous quarters due to our streamlined marketing strategy targeting higher intent users with lower amounts of acquisition marketing investment.

Our success here is a testament to the scale of the weeks brand and the value our platform provides to users.

This strong core behavior also demonstrates the solid fundamentals of our business, including steadily improved conversion and monetization.

Speaker Change: <unk> improved to more than $253 in 2023 up 10% year over year.

Speaker Change: Driven by continued mix shift to higher tiered packages higher pricing and increased adoption and usage of business solution products as we continue to onboard higher intent and conference oriented users, particularly partners.

Speaker Change: Existing core behavior also improved compared to the prior year.

Speaker Change: Demonstrated by net revenue retention increasing to 105%.

Speaker Change: 2023 from 102% in 2022.

Nir Zohar: We now expect existing USO cohorts to generate over $16.2 billion in bookings over the next 10 years, illustrating the power of our business model and differentiated product offerings. Turning to 2020 to 2024, Lior will share the details of our outlook in a moment, but before he does, I want to highlight the drivers that we believe will accelerate booking growth in the coming years. First, the launch of Wix Studio has been great.

Speaker Change: We now expect existing user cohorts to generate over $16 2 billion in bookings over the next 10 years illustrating the power of our business model and differentiated product offering.

Speaker Change: Turning to 2022 2024.

Speaker Change: <unk> will share the details of our outlook in a moment, but before he does I want to highlight the drivers that we believe will accelerate bookings growth in the coming year.

Speaker Change: First the launch of weak studio has been a great success.

Nir Zohar: We have seen existing partners build more projects on Wix and many new partners join our platform. We believe Studio will continue to bring an increase to the activity of partners on Wix, which will drive growth in the overall monetization of our partner cohort.

Speaker Change: We have seen existing partners build more projects in weeks and many new partners join our platform.

Speaker Change: We believe studio will continue to bring an increase to the activity of partners on Wix.

Speaker Change: We will drive growth in overall monetization of our partner cohorts.

Speaker Change: Second.

Nir Zohar: We expect conversion and ARPAs of self-creators to trend positively as our leading product suite continues to resonate and enables users to meet their goals online. Third, as Avishai mentioned, uptake of the Milestone AI initiatives of 2023 has been incredible. And we expect to see ramping conversion and monetization benefits from our entire AI toolkit for both self creators and partners this year. Fourth, we expect continued success in bringing on new businesses and commerce users that generate GPV and adopt business applications. We will also benefit from the compounding growth of GPV from existing commerce use. Finally, we have recently implemented higher prices for new and existing subscriptions.

Speaker Change: We expect conversion and <unk> of <unk> to trend positively as our.

Speaker Change: Leading product suite continues to resonate and enables users to meet the goes online.

Speaker Change: It's obviously I mentioned.

Speaker Change: Uptake of the milestone AI initiatives of 2023 has been incredible and we expect to see ramping conversion and monetization benefits from our entire AI toolkit for both south creators and partners this year.

Speaker Change: Fourth we expect continued success in bringing on new businesses and commerce users that generate GPP and adopt business applications.

Speaker Change: We will also benefit from the compounding growth of GPP from existing commerce users.

Speaker Change: Finally, we've recently implemented higher pricing for new and existing subscription. This recent price action is part of our goal of aligning the continuously growing value we deliver to users through the price. They pay our users have responded extremely well historically.

Nir Zohar: This recent price action is part of our goal of aligning the continuously growing value we deliver to users with the price they pay. Our users have responded extremely well historically, with strong retention within our cohorts during past increases, which provides us with confidence that our approach to pricing is working. Following our price increases in 2019 and 2022, as well as this one, we believe there is still considerable room to continue to increase prices as we innovate and deliver incremental value to users.

Speaker Change: Strong retention within our courts during past increases, which provides us with the confidence that our approach to pricing is working.

Speaker Change: Following our price increases in 2019, and 2022 as well as this one we believe there is still considered considerable room to continue to increase price as we innovate and deliver incremental value to users.

Nir Zohar: We expect to continue to explore potential price action at a similar cadence going forward. Because of these drivers and the continued momentum we've seen this year so far, we are confident that our business will experience an acceleration in growth in 2024. With that, I will now hand it over to Lior to walk through more details on our financial 2024 outlook and improved 2025 expectations.

Speaker Change: We expect to continue to explore potential price action at a similar cadence going forward.

Speaker Change: Because of these drivers and the continued momentum we've seen this year. So far we are confident that our business will experience an acceleration in growth in 2024.

Speaker Change: With that I will now hand, it over to Laura to walk through more details on our financials 2020 for outlook and improved 2025 expectations.

Lior Shemesh: Thanks Nir. We finished 2023 on a very strong note. We believe Brutus is on a great path going into 2024 and 2025. Business fundamentals continue to improve. We have seen early success with Wix Studio and our AI product. The Bulletproof Executive 2013, believes that puts us on the track to accelerate year-over-year revenue growth in 2025. We now expect to outperform the 2024 targets we shared at our analyst day in August. I believe that we will significantly surpass the rule of 40.

Laura: Thanks, Neil we finished 2023 on a very strong note, which we believe puts us on a great path going into 2024 and 2025.

Laura: As our business fundamentals continue to improve.

Laura: We have seen early success with weak studio.

Laura: AI products as well as an improving macro environment, giving us confidence in our ability to accelerate year over year bookings growth in 2024, which we believe will just on the trucks to accelerate year over year revenue growth in 2025.

Laura: We now expect to outperform the 2024 targets, we shared at our analyst day in August and believe that we will significantly surpass the rule of 40 in 2025.

Laura: Before I go through the details of our 2024 outlook I want to quickly summarize our Q4 and full year of 2023 results note that all financial data are non-GAAP unless otherwise noted.

Laura: Q4, total revenue of $404 million up 14% year over year revenue growth was driven primarily by partners revenue, which grew 38% year over year as Avishai mentioned studio is off to a great start exceeding our expectations.

Laura: Subscription revenue in Q4 grew nearly 12% year over year and business solutions revenue in Q4 grew 20% year over year.

Laura: We expanded total gross margin in Q4 to 70% and operating income grew to nearly $65 million.

Laura: Or 16% of revenue.

Laura: In Q4 sales and marketing expenses grew quarter over quarter to $92 million rollout as we increased our investment in the weeks to Joe Brent.

Laura: While we expect to continue gaining leverage in our marketing due to our streamlined marketing strategy, especially with self creators we plan to continue investing in the studio grant in 2024.

Lior Shemesh: Business Solutions Revenue in Q4 Group 20, We expand the total gross margin in Q4 to $7. Operating In-Carb Group to Nearly $25 million The Bulletproof Executive 2013, Q4 – Sales and marketing expenses grew quarter-over-quarter to $92 million; we increased our investment in Wix Studio. While we expect to continue gaining leverage on marketing due to our streamlined marketing strategy, especially with self-creation, we plan to continue investing in the studio brand. 243-CASHFLOW, including its headquarters and its structuring cost, was over $19 million.

Q4 free cash flow, excluding headquarters and restructuring costs was over $19 million or <unk>.

Laura: 22% of revenue as we continued to benefit from high operating efficiency.

Laura: Moving out to 2023 full year results total revenue grew to $1 $56 billion or 13% year over year and creative subscriptions.

Laura: <unk> was $1 19 billion up over 10% year over year. We ended 2023 with a total gross margin was 68% an improvement of <unk>.

Laura: Nearly 500 basis points compared to 2022.

Laura: Throughout the year, we benefited from improved efficiencies in hosting and infrastructure costs and optimization of support growth, partially aided by integrating AI.

Laura: E workflows.

Laura: Creative subscriptions gross margin expanded to 82% in 2023 and business solution gross margin grew to 29% for the full year as we continue to benefit from improving Biogen and experiments.

Laura: 'twenty three we generated a total of $246 million in free cash flow, excluding headquarters and restructuring costs.

Laura: Margin of 16% of revenue ahead of our prior expectations and guidance.

Laura: This included break even free cash flow in our polymer business.

Lior Shemesh: 22% of revenue, and many more. Thank you. Moving on to 2023 full-year results, total revenue grew to 1. ARR was $1.19 billion, up over 10% year-over-year. We ended 2023 with a total gross margin of 68%. The Bulletproof Executive, 2013, It's really 500 basis points compared to 20. Throughout the year, we benefited from improved efficiencies in housing and infrastructure.

Laura: A significant milestone and one year ahead of our three year plan. This was a result of strong sustained growth as well as improved gross margin.

Laura: And meaningful operating deleverage driven by the broader efficiencies implemented over the past two years.

Laura: We expect to continue to generate incremental margin improvements from the continued scaling of our commerce business.

Laura: The stable operating expenses base as well.

Laura: <unk> business continued to grow.

Laura: As a result, we now expect to significantly exceed the positive free cash flow margin target for 2024, and 2025 as outlined in our three year plan.

Laura: I'm also happy to report that we finished 2023 with GAAP net income of $33 million or <unk>.

Laura: Last year of GAAP profitability.

Laura: These profitability was due to the careful management of costs throughout the last couple of years, including stock based compensation cost, which declined as a percent of revenue for the third straight year.

Lior Shemesh: Optimization of Support Codes Partially Aided by Integrating AI into Workflows, Credit Subscription Gross Margin Expanded to 82% Ltd. Business Solution Growth Margin grew to 29% For the full year, as we continue to benefit... In 2023, we generated a total of $246 million in free cash, including headquarters and restructuring.

Laura: These results demonstrate the fantastic growth and incremental profitability of our business.

Laura: We re accelerated year over year revenue growth due to our strong fundamentals of our user growth.

Laura: And the strong cadence of product innovation. The continued returns from the cost efficiency culture. We have implemented two weeks over the last couple of years and the half drove and drove strong incremental profit.

Laura: We believe that these results puts us in a very strong position to accelerate growth into 2024 is our successful efforts in implementing operating efficiency gives me confidence we can continue to generate incremental profitability.

Speaker Change: I want to spend the rest of my time on our expectations for 2024.

Lior Shemesh: Please see the complete disclaimer at https://sites.google.com. This includes Brexit, and even free cash flow in our palm oils, a significant In one year ahead of our three-year, This was a result of strong sustained growth as well as improved growth margin and meaningful operating leverage driven by the broader efficiencies implemented over the past year. We expect to continue to generate incremental margin improvements from the continued scaling of our core measures and the Stable Operating Space. As our partner's business continues to grow, As a result, we now expect to significantly exceed the Partners Free Cash Flow Margin target. 2024 and 2025 as outlined in our. I'm also happy to report that we finished 2023 with a GAAP net income of $33 million, our first year of GAAP profit. This profitability was due to the careful management of costs throughout the last couple of years, including stock-based compensation costs, which declined as a percent of revenue for the third straight year.

Speaker Change: We are reintroducing annual bookings guidance due to the improved visibility and confidence in our business are stable and positively trending macro environment and strong quote behavior, particularly in our polymer business for.

Speaker Change: For the full year 2024, we expect total bookings of $1 78 to $1 $81 billion.

Speaker Change: 12% to 14% year over year, an acceleration from 2023.

Speaker Change: We expect year over year growth of total bookings to accelerate in the second half of 2024% to 15%.

Speaker Change: As at the high end of the guidance range in.

Speaker Change: In particular, the acceleration is expected to be primarily in creative subscriptions bookings, bringing it to double digit year over year growth in the second half of 2024.

Speaker Change: This anticipated growth positions the business to achieve accelerating year over year revenue growth in 2025.

Walk you through the drivers of our bookings growth in 2024, and you can find additional information in the shareholder update.

Speaker Change: For the full year of 2024, we expect total revenue to be $1 73 to $1 76 billion.

Speaker Change: Moving to 13% year over year, we expect revenue in Q1, 'twenty 'twenty four for $150 million to $419 million or 11%, 12% year over year, we continue to operate the business in an efficient manner.

Speaker Change: Evidenced by the meaningful operating leverage we generated in 2023 on both a GAAP and non-GAAP basis.

Lior Shemesh: The Bulletproof Executive 2013, The Fantastic Growth and Incremental Profitability of Our Businesses. We re-accelerated year-over-year revenue growth due to the strong fundamentals of our user core. 2012 University of Georgia College of Agricultural and Environmental Sciences UGA Extension Office of Communications and Creative Services, Continued Returns from the Cost Efficiency Culture.

Speaker Change: We plan to operate with the same efficiency in 2024 and expect strong growth in gross profit due to anticipated gross margin improvement on a year over year basis.

Speaker Change: For the full year 2024, we expect non-GAAP total gross margin of 68% to 69% with non-GAAP business solution gross margin to be approximately 30% for the full year ahead of the plan. We shared in August we also expect to generate additional leverage due to minimal growth in operating expenses.

Year over year.

Speaker Change: We expect non-GAAP operating expenses to be 51% to 52% of revenue for the full year also better than our August split in non-GAAP sales and marketing to remain similar to 2023 at roughly 23% to 24% of revenue, we will continue with marketing activities related to weak studio throughout 2000.

Lior Shemesh: We have implemented, over the last couple of years, and have drawn strong incremental profits. We believe that these results put us in a very strong position to accelerate growth into 2024, as our successful efforts in implementing operating efficiencies... give me confidence that we can continue to generate incremental profits. And I want to spend the rest of my time on our expectations for 2025. We are reintroducing annual bookings guidance due to the improved visibility and confidence in our bookings.

Speaker Change: <unk> 24, as we capitalize on the growth we have seen since its launch.

Speaker Change: We anticipate that our strong growth and operating efficiency will generate positive GAAP operating profit and net income in 2024.

Speaker Change: We expect to generate free cash flow, excluding headquarters cost of $370 million to $400 million.

Speaker Change: When you want to 23% of revenue in 2024.

Speaker Change: We expect the free cash flow guidance in combination with our share repurchase activity will translate to more than $6 in free cash flow per diluted share in 2024.

Speaker Change: Of our three year plan.

Speaker Change: And so we continue to responsibly manage the dilution, we expect stock based compensation expenses.

Speaker Change: To decline for the third consecutive year as a percent of revenue to approximately 13% of revenue in 2024 in line with our three year plan.

Speaker Change: We expect capital expenditures, including costs associated with our new headquarters build out of our crop of approximately $7 million to $10 million in 2024, we will incur the final cost of our new headquarters in the first half of the year and anticipate these costs to be roughly $8 million to $10 million.

Speaker Change: We are very excited about the upcoming year, we believe we have positioned us to reaccelerate growth and generate incremental profitability.

Speaker Change: That we will now take your questions.

Speaker Change: Certainly to ask a question during the session you will need to press star one on your telephone.

Lior Shemesh: Bringing it to double-digit year-over-year growth, the second half of its anticipated growth positions the business to achieve accelerating year-over-year revenue growth. We will walk you through the drivers of our bookings growth in 2024, and you can find additional information in the shareholder app. For the full year 2024, we expect total revenue to be $1.73 to $1.76 billion, or $11. 13% year-over-year.

Speaker Change: To withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.

Speaker Change: One moment for your first question.

Speaker Change: Okay.

Speaker Change: Our first question will be coming from Elizabeth <unk> of Morgan Stanley. Your line is open Elizabeth.

Elizabeth: Great. Thank you so much congrats on a strong quarter I wanted to follow up on some of the comments about better conversion rate bolted with studio capturing problems that didn't continue through the funnel and also yourself creators with AI, reducing friction and get on the website.

Lior Shemesh: We expect revenue in Q1 2024 of $415-419 million, or 11-12% year-over-year. Thank you very much; plan to operate with the same efficiency in 2024. The Bulletproof Executive 2013, Only you, only you.

Elizabeth: If you look at the premium sub this percentage of registered users that metric has been pressured for the last few years. So should we see this ratio start to improve in 2024, and if not what would you point us to to track the success on better conversion rates. Thank you.

Lior Shemesh: For the full year 2024, we expect a land gap and a total growth margin. The Bulletproof Executive 2013, This is a tool ahead of the plan we shared in the past. We also expect to generate additional leverage due to minimal growth in operating expenses year over year. We expect NAMGAP operating expenses to be 51-52% of revenue for the full year, also better than our August plan, and NAMGAP sales and marketing to remain similar to 2020, at roughly 23 to 24 percent of revenue.

Elizabeth: Well I think hey, Elizabeth it's Amir.

Amir: I think that generally.

Amir: Premium subs, where there is a percentage or as an absolute number is probably not the best API to look at.

Amir: Since it may be significantly impacted by different things like.

Amir: Our general goal to drive to get more higher intent better.

Amir: Better users that are willing to spend more on our platform.

Amir: It goes towards spicing. It goes towards generally the changes we've done in marketing.

Lior Shemesh: We will continue with marketing activities related to Wix Studio throughout 2024 as we capitalize on the growth we have seen since its launch. We anticipate that our strong growth in operating efficiency will generate positive gap operating profit and net income in 2024. We expect to generate free cash flow excluding headquarters costs of $370 to $400 million.

Amir: And more so.

Amir: We definitely in some cases reaccelerate some of the south activity over time, but when we look at the conversion rates, we look at the liquidity per geography separately per different social search traffic in differently in a different manner. When we look at the stats creators and as well as the as the partners. We believe that the best thing.

Amir: To look at is actually.

Amir: <unk>.

Amir: The cohort value.

Which I think in very easily we have demonstrated that notice only has stabilized it's actually on an increasing trend and in fact, we're gaining getting to the factory to the point, where it's close to surpassing even the height of the of the Covid cohorts.

Lior Shemesh: 21 to 22, revenue in 2024. We expect this free cash flow guidance, in combination with our share repurchase, will translate to more than $6 in free cash flow per diluted share in 2021. Ahead of our time. As we continue to responsibly manage dilution, we expect stock-based compensation. Closed Session.

Amir: Obviously are the strongest ones in our history.

Amir: And I think that's the best way to understand.

Amir: The real impact that all of these improvements on the on the product and the business are having on the outcome.

Amir: Under the Hood.

Amir: Yes.

Speaker Change: Great. Thank you and just as a follow up.

Speaker Change: I wanted to ask on <unk>.

Just the algorithm between.

Operator: Revenue in 2024 in line with our three, We expect capital expansions, including costs associated with our new headquarters build out. For more information, please visit our website at www. ISGlobal.org, The Bulletproof Executive 2013, We are very excited about the upcoming year. We believe we have positioned ourselves to re-accelerate growth. Generate Incremented Profit. With that, we will now take a few questions. To ask a question during this session, you will need to press Star 1-1 on your telephone. To withdraw your question, please press Star 11 again.

Speaker Change: Top line revenue growth in investment given your Michelle three year plan, suggesting roughly unchanged revenue growth and now we're seeing an improvement with growth expected to accelerate in 2025.

Speaker Change: Do you think about the elaboration of investment understanding you guys are still exceeding the low of 40 in 2025 just helpful to understand the framework around the opportunity to invest versus maybe less of a need given the prior investment before thank you.

Speaker Change: So.

Speaker Change: Elizabeth I think we mentioned before I think that you know the only way of obviously you know to a significantly overpowered.

Speaker Change: The rule of 40.

Speaker Change: <unk> has to be a combination of both profitability and growth.

Operator: Please stand by while we compile the Q&A roster and one moment for our first question. Our first question will be from Elizabeth Porter of Morgan Stanley. Your line is open, Elizabeth.

Speaker Change: The reason why you would see right now that growth is accelerating in the second half of 'twenty 'twenty four for US is a great.

Speaker Change: Indication.

Speaker Change: But we will see acceleration of revenue in 2025.

Speaker Change: Remember that every most of most of the incremental revenue that we get goes to the bottom line in terms of profitability as we keep our operating expenses more or less at the same level.

Nir Zohar: Great, thank you so much. Congratulations on a strong quarter. I wanted to follow up on some of the comments about better conversion rates, you know, both at the Wix studio capturing pros that didn't continue through the funnel, and also self-creators with AI reducing friction to build a website. When we look at the premium subs as a percentage of registered users, that metric has been pressured for the last few years. So should we see this ratio start to improve in 2024? And if not, where would you point us to to track the success of better conversion rates? Thank you. Well, I think, hey, Elizabeth, it's me here.

Speaker Change: Therefore, I expect that this acceleration of growth will drive further free cash flow, which will be demonstrated in a much better.

Speaker Change: Or significant surpassing the rule of 40.

Speaker Change: Great. Thank you.

Speaker Change: And one moment for our next question.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Our next.

Speaker Change: <unk> will be coming from Brent Thill of Jefferies. Your line is open brands.

Speaker Change: Alright. Thank you. This is John Byun on for Brent Thill question is on bookings growth.

John Byun: Mentioned is going to accelerate.

John Byun: Half of the incremental.

John Byun: Will come from several factors you mentioned like studio create in his comments and so on.

John Byun: When you think about that in terms of.

John Byun: Ranking them in terms of meaningful contribution.

John Byun: Comes into level of confidence.

Nir Zohar: I think that, generally, Premium subs, whether as a percentage or as an absolute number, is probably not the best KPI to look at since it may be, you know, significantly impacted by different things like, you know, our general goal to drive more, higher intent, better users that are willing to spend more on a platform. You know, it goes towards pricing, it goes towards, generally, you know, the changes we've made in marketing and more. So, we definitely, you know, in some cases have re-accelerated some of the subs activity over time, but when we look at the conversion rates, we look at it per geography, separately per different sources for traffic, and definitely in a different manner when we look at the self-creators and as well as the partners.

Speaker Change: Behind each of those thank you.

Speaker Change: Yes. So definitely you are now looking at the next.

Speaker Change: Couple of you know I think that it will be much better to look at 2024 and 2025, because obviously, it's a continuation of that remember that we are a SaaS model. So every time that we launched a new product.

Speaker Change: The time responses, we see more and much more contribution obviously this is why by the way we believe that the second half of 2020 for the growth is going to be accelerated.

Speaker Change: But then again also 2025 will be much better than 2024, I think that the first reason indefinitely.

Speaker Change: Launching new products and one.

Speaker Change: In the end of the day, we are technology, a product company and this is how we drive our growth.

Speaker Change: Mostly from from new feature from new product and this is what we did in the past and we'll continue also to do in the future. So definitely its coming from the partner business with launching studio it was a great.

Nir Zohar: We believe that the best thing to look at is actually the cohort value, which I think can easily be demonstrated that not only has stabilized, but it's actually on an increasing trend, and in fact, we're gaining, getting to the point where it's close to surpassing even the heights of the COVID cohorts, which obviously are the strongest ones in our industry. And I think that's the best way to understand the real impact that all of these improvements to the product and the business are having under the hood. Great, thank you.

Speaker Change: Launch for us.

Speaker Change: We see traction in the market, we see the demand.

Speaker Change: See how our agencies use it I think if you know we mentioned a few times about the number of new accounts.

Speaker Change: With more than 50% from new.

Speaker Change: I think that it's for us it's a great proxy to the fact that we are going to see much more of that it would be significantly.

Speaker Change: The major growth driver for us in the next few years. The second one is we know everything that we've done with AI, we see a tremendous.

Lior Shemesh: And just as a follow up, I wanted to ask about just the algorithm between top line revenue growth and investment. Given your initial three-year plan suggested roughly unchanged revenue growth, and now we're seeing an improvement with growth expected to accelerate in 2025, you know, how do you think about the levers of investment, you know, understanding you guys are still exceeding the rule of 40 in 2025? You know, just helpful to understand the framework around the opportunity to invest versus maybe less of a need given the prior investment. Thank you. So,

Speaker Change: Results out of it which we believe that will continue into the next year.

Speaker Change: And as you know is always the first one is about trying to optimize our pricing strategy and this is what we've done in the past we will continue to do in the future.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: You mentioned like a false false reason, which is the overall demand that we see.

Speaker Change: On a macro basis.

Speaker Change: Okay.

Speaker Change: So and actually that's the kind of leasing to do Dan a question I had was when you mentioned positively changing macro.

Speaker Change: Your prepared remarks wondering if you could share more details what actually you're seeing.

Speaker Change: Specifically thank you.

Speaker Change: Okay.

Lior Shemesh: You know, Elizabeth, as we mentioned before, I think that, obviously, to significantly overpass the... The Bulletproof Executive 2013, It has to be a combination of both profitability and growth. The reason why we see right now that growth is accelerating in the second half of 2024 is, for us, a great indication that we will see acceleration of revenue in 2025. Remember that most of the incremental revenue that we get goes to the bottom line in terms of profitability as we keep our operating costs more or less at the same level. I expect that this acceleration of growth will drive further free cash flow, which will be demonstrated in a much better or significant surpassing the rule of law. Great, thank you.

Speaker Change: Generally in.

Speaker Change: It still.

Speaker Change: It's still.

Speaker Change: Not massive but definitely I think we are seeing a positive you're changing behavior in terms of.

The business is being formed on the platform in terms of the <unk>.

Speaker Change: To get going through the website.

Speaker Change: Sure.

Speaker Change: All of our users both on the Susquehanna side and the partner side.

Speaker Change: You have to also remember that we have a very wide activity of commerce, so not only.

Speaker Change: Shops, but also <unk>.

Speaker Change: Our selling and scheduling time selling.

Speaker Change: Digital goods.

Our booking.

Speaker Change: Selling tickets to events booking hotels et cetera, and I think that in most of these cases, we are seeing a positive upward trend.

Speaker Change: I think that's what makes us feel a bit more comfortable about the macro economy.

Speaker Change: Thank you very much.

Operator: And one moment for our next question. Our next question will be coming from Brent Thill of Jefferies. Your line is open, Brent.

Speaker Change: And one moment for our next question.

Speaker Change: And our next question will come from Yigal Rania.

Ygal Arounian: Of Citi. Your line your line is open.

Lior Shemesh: Thank you. This is John Bia on behalf of Brent Thill. The question is on bookings growth. You mentioned it's going to accelerate, and half of the incremental growth will come from several factors you mentioned like studio creators, commerce, and so on. Is there a way when you think about them in terms of, you know, ranking them in terms of meaningful contribution and the level of confidence you have behind each of them?

Yigal Rania: Yes.

Ygal Arounian: Hey, good morning, everyone.

Yigal Rania: Great.

Ygal Arounian: The product the strength of the product pipeline, all that information here, but kind of back expectations for more coming through.

Is there anything that you can comment on.

Ygal Arounian: On the new things that are.

Ygal Arounian: Coming up in the pipeline that you are talking about here and maybe specifically on AI site generator.

Lior Shemesh: Yeah, definitely, you know, looking at the next couple of years, I think that it will be much better to look at 2024 and 2025 because, obviously, it's a continuation of that. Remember that we are a SaaS model. So every time that we launch a new product, as time passes, we see more and much more contribution. Obviously, this is why, by the way, we believe that in the second half of 2024, growth is going to be accelerated. But then again, 2025 will also be much better than 2024.

Ygal Arounian: If there's more you could share on what early users are seeing what youre seeing from them and when we could expect a more general launch of that.

Ygal Arounian: Of course, I think that.

Ygal Arounian: I would assert generator. So we released a BARDA would cause version one.

Ygal Arounian: It's a.

Ygal Arounian: The gateway for people to start with the website, meaning that you come in and you say you know I'm in.

Ygal Arounian: A spa.

Ygal Arounian: New York City.

Ygal Arounian: I specialize in some specific things.

Ygal Arounian: And we will.

Ygal Arounian: And AI will interview on the wide mixture business unique where youre located how many people tell us about those people.

Ygal Arounian: And the staff members and as a result, we'll generate a website for you that is.

Ygal Arounian: As all the great content right.

Ygal Arounian: And content will be text and images.

Ygal Arounian: The other thing that's been really actually get you to this experience where you can.

Ygal Arounian: Choose how we want to have the design look like and the AI will generate different designs for you. So you can tell it like this thing I wanted a variation on that I don't like the colors change the colors.

Lior Shemesh: I think that for us, it's a great proxy for the fact that we're going to see much more that will be a significantly major growth driver for us in the next few years. The second one is, you know, everything that we've done with AI. We see a tremendous... The Bulletproof Executive 2013, And, as you know, as always, the third one is about trying to optimize our pricing strategy. And this is what we have done in the past.

Ygal Arounian: Well I want colors that are more professionals, who I want color that the blue and yellow and then I will do it for you on data and you can also say that I don't really like this is that going to generally something very different or generated small variation of that in many ways a bit similar to me journey, what Imogen is doing with their images, we are doing with the full blown website.

Ygal Arounian: And there is all of that is something that is probably 70% of the website that you need to have on average Tom Tom it's 95%, but sometime its less than that so let's give you an amazing way to start.

Nir Zohar: We'll continue to do so in the future. Thank you, and then maybe I have a follow-up question. I think that you also mentioned a fault reason, which is the overall demand that we see on the macro... Actually, that kind of leads into the question I had was when you mentioned positively trending macro in your prepared remarks. I was wondering if you could share more details on what you're seeing specifically. Thank you. Hey, well, I think, you know, generally, and, you know, it's still, it's still not massive, but definitely, I think we're seeing a positive change in behavior in terms of, you know, the businesses being formed on the platform in terms of the GPV tool that is going through the websites of our, of our, of our users, both on the self-care side and the partner side. You have to also remember that we have a very wide activity of commerce, so not only shops but also, you know, people are selling, scheduling time, selling digital goods, booking, selling tickets to events, booking hotels, etc.

Ygal Arounian: Your web site.

Ygal Arounian: Shortened the amount of work that you need to do by about 70% to 80%.

Ygal Arounian: I think it's fantastic and very exciting and it's even more exciting considering that we have some really cool ideas. So now to take it even further and make it a better product that not just create more beautiful websites, but also is more tightly coupled with your vision about your own business.

Ygal Arounian: And so we're going to see is a lot of that is coming there's a lot of things that we're working on mostly for <unk>. It is mostly in how you manage your business so at which we had.

Ygal Arounian: We have the opportunity to see.

Our millions of millions of businesses are being run what works and what's not and we can recommend our customers how to do things better.

Ygal Arounian: How to make their business more successful or why they should be staying in the <unk> and we are adding assist.

Ygal Arounian: Assistance that help you figure out how to take your business to the next level.

Nir Zohar: And I think that in most of these cases, we're seeing a positive upward trend. So I think that's what makes us feel a bit more comfortable about the macro. Thank you very much.

Ygal Arounian: This is really unique I don't believe anybody else is working on something similar to that and I find it to be.

Operator: And one moment for our next question. And our next question will come from Ygal Arounian of Citi. Your line is open. Hey, good morning, everyone.

Ygal Arounian: And amazing opportunities small businesses to learn.

Ygal Arounian: How to think about it.

Ygal Arounian: A lot of it can also be automated so that I can tell you well I think we should have more post on your website, but things that regarding to ensure the yoga studio about what is the right way to eat well what kind of food is it conceivable what is better if you will and I mean that.

Avishai Abrahami: Great to see all the products, the strength of the product pipeline, all the innovation here, the kind of expectations for more coming through. I don't know if there's anything that you can comment on, you know, on the new things that are coming up in the pipeline that you're talking about here, and maybe specifically on the AI site generator. If there's more you could share on what early users are seeing, what you're seeing from them, and when we could expect a more general launch of that. Of course, I think that I'll start with the side generator.

Ygal Arounian: Can be also done by the AI. So that will not just recommend a lot of thing it can be doing for you. So that is another exciting project that we're working on.

Ygal Arounian: And of course and weak studio.

Ygal Arounian: Long roadmap of.

Ygal Arounian: Really exciting things that.

Ygal Arounian: Youre going to see coming in this.

Ygal Arounian: This year.

Ygal Arounian: Okay.

Ygal Arounian: Very helpful.

Ygal Arounian: A follow up on that I think a lot of what you've talked about in the previous answer to address this but.

Avishai Abrahami: So we released what I would call version one. It's a great way for people to start with their website. Meaning that you come in, and you say, you know, I'm a spa in New York City, and I specialize in some specific things.

Ygal Arounian: On the obviously a lot of great things to focus on here.

Ygal Arounian: In this quarter, but for soft creators the growth decelerated a bit sequentially.

Easier year over year comp last quarter or if it goes near commented on seeing that business get back to double digit growth do you still think that that's the right framework for that and.

Ygal Arounian: Is it just AI and these components that get you there or is there something else to think about thanks.

Avishai Abrahami: And the AI will generate different designs for you. So you can tell it well: I like this thing. I want a variation on that. I don't like the colors; please change the colors, or I want colors that are more professional, or I want colors that are blue and yellow. And then I will do it for you. On the other hand, you can also say, well, I don't really like this design. Can you generate something very different or generate a small variation of that?

Ygal Arounian: Hello.

Ygal Arounian: Yes.

Speaker Change: Generation of.

Speaker Change: It's also important to mention that this is a result of a few things not necessarily from the.

Speaker Change: From the business perspective.

Speaker Change: But but obviously we were lapping with the price increase that you know from from spring of 2022. So obviously an OECD a result in the second half of 2023, although we spoke about it also last quarter, but I think that you know that's and you mentioned.

Speaker Change: We obviously.

Speaker Change: Believe that these price increases and optimization is something thats.

Avishai Abrahami: In many ways, a bit similar to MeJourney, what MeJourney is doing with the images, we are doing with the full-blown website. And all of that is something that is probably 70% of the website that you need on average, right? Sometimes it's 95%, but sometimes it's less than that.

Speaker Change: We will be doing on a regular basis as long as we need to obviously have to optimize the pricing.

Speaker Change: The second thing about the self creators.

Speaker Change: I believe that we can.

Speaker Change: Slightly higher percent of monthly plans in the second half of the year.

Avishai Abrahami: So it gives you an amazing way to start your website and shortens the amount of work that you need to do by about 70% to 80%. I think it's fantastic and very exciting, and it's even more exciting considering that we have some really cool ideas on how to take it even further and make it a better product that not just creates more beautiful websites but also is more tightly coupled with your vision for your own business. And so we're going to see a lot of that in the coming weeks. There's a lot of other things that we're working on, mostly for self care, which is mostly about how you manage your business. So at Wix, you know, we had a, We had the opportunity to see.

Speaker Change: So obviously all of the above will not be a headwind in 2024 I believe that you know everything that we're doing right now with the product and AI and so on and we mentioned that.

Speaker Change: Fulfill scheduled in the long run we believe that it will be a double digit growth just because of that because it has been the most effect of the macro environment, which already started to see that it's improving.

Speaker Change: But then again also you know the new product and AI is one of the examples of how we can bring.

Speaker Change: Increased conversion and also increase the growth of self critical.

Speaker Change: Thank you.

Speaker Change: And one moment our next question.

Avishai Abrahami: Our millions and millions of businesses are being run, what works and what's not, and we can recommend to our customers how to do things better, how to make the business more successful, or what they should be saying, but they don't say, and we are adding assistants that help you figure out how to take your business to the next level. I think that this is really unique.

Speaker Change: We will be coming from Mark Mahaney of Evercore ISI. Your line is open mark.

Mark Mahaney: Thank you I just wanted to ask about the sales and marketing leverage its not too often you see company grow revenue by 25% over two years and get cut sales and marketing expenses by 25% roughly those numbers are right. So just talk about the sustainability of that is it due to the increasing contribution from partners revenues due to the fact that you've reached enough brand awareness.

Avishai Abrahami: I don't believe anybody else is working on something similar to that, and I found it to be an amazing opportunity for small businesses to learn how to do things better. And a lot of it can also be automated, so I can tell you, well, I think we should have more posts on your website about things that relate to, if you're a yoga studio, about what is the right way to eat, or what kind of food you should consume, or what is better. If you, and, and, and, I mean, that can also be done by the AI.

Mark Mahaney: And scale, where sales and marketing can become more of a fixed cost going forward I know you gave guidance for.

Mark Mahaney: This upcoming year about where sales and marketing is but just talk through again the.

Avishai Abrahami: So the AI will not just recommend a lot of things; it can do them for you. So that is another exciting project that we're working on. And of course, in Wix Studio, there's a long roadmap of really exciting things that you're gonna see coming this year. Very helpful.

Mark Mahaney: Pretty significant leverage you have and the potential for keeping that just has a fixed expense going forwards. Thank you.

Speaker Change: Hey markets. So I think you've touched I think you touched on both drivers.

Avishai Abrahami: Just a follow up on that. I think a lot of what you've talked about in the previous answer will address this, but, you know, on the obviously a lot of great things to focus on here in this quarter, but for self-creators, the growth decelerated a bit sequentially, you know, on an easier year over year comp last quarter, I think New York commented on seeing that business get back to double digit growth. Do you still think that that's the right framework for that? And, you know, is it just AI and these components that get you there? Is there something else I should think about?

Markets: And I would say that yes definitely partners play a part in it but I think that more than more than anything it is about the scale the brand.

Speaker Change: And you have to remember that.

Speaker Change: We've seen a surge in our brand recognition.

Speaker Change: In the year is kind of leading up towards towards 2023, mostly throughout the Covid era, which combined.

Speaker Change: A very.

Speaker Change: Hi increase in our marketing spend because there was a high of extremely high demand, but also because so many people are now actually forced to go online in businesses in areas, where it naturally before they warrant.

Nir Zohar: Yeah, well, the deceleration of, I think that it's also super important to mention that is a result of a few things, not necessarily from the business perspective, on D W V Y V V Y V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V V So obviously, you know, we see results in the second half. We spoke about it also last quarter, but I think that, you know, it's new. We obviously believe that this price increase and optimization is something that we will be doing on a regular basis as long as we need to, obviously, to optimize the price. The second thing about the self-creator...

Speaker Change: And they got.

Speaker Change: We regenerated crazy exposure through our doors throughout that period of time.

Speaker Change: That led us kind of a late 2022 to the point, where we started testing whether we can go.

Speaker Change: And decrease the investment in marketing and what will that do to our to our sales and revenues.

Speaker Change: On an ongoing basis, what we have seen which we thought was very remarkable that not only does it.

Speaker Change: That it really helps us quickly stabilize in.

Speaker Change: Continue growing even at a lower base of marketing.

Speaker Change: Simply because a lot of our.

Speaker Change: A lot of the traffic, we kind of lost by not buying it was replaced by organic traffic, which came through the strength of the brand.

Nir Zohar: I believe that we had a slightly higher percentage per month in the second half of the year. So, obviously, all of the above will not be a headwind in 2024. I believe that, you know, everything that we are doing right now in the product and AI and so on, and we mentioned that, you know, for self-care tools, in the long run, we believe that it will be double-digit growth just because of that, because it has the most effect on the macro environment, which has already started to see that it's improving. But then again, also, you know, the new product in AI is one of the examples of how we can bring increased conversion and also increase the growth of self-employment. Thank you.

Speaker Change: And even that traffic again, you see that the corn basis are smaller than <unk>, but it was a much higher intent traffic. So it generated actually better financial results. So from our standpoint, yes, we do believe that on the <unk> side.

Speaker Change: The the marketing investment can pretty much be a fixed cost obviously with some fluctuation over time based on opportunities.

Speaker Change: Whereas when we look on the partner side of the business.

Speaker Change: I think 2024, especially with the fantastic results, we're seeing in on.

Speaker Change: On the studio side in terms of the product is where we're going to see more investment into marketing.

Speaker Change: Thank you Nir.

Operator: And one moment for our next question. This question will be coming from Mark Mahaney of Evercore ISI. Your line is open, Mark.

Speaker Change: And one moment for our next question.

Yes.

Speaker Change: Our next question will come from Chris Zhang.

Chris Zhang: Of UBS, Chris Your line is open.

Nir Zohar: Thank you. I just want to ask about sales and marketing leverage. It's not too often you see a company grow revenue by 25% over two years and yet cut sales and marketing expenses by 25%. Roughly, those numbers are right.

Chris Zhang: Hi, Thanks for taking our question.

Chris Zhang: Can you discuss a little bit and releasing that shareholder update about the price increase that is currently underway I just wonder if you could share a little more detail about the.

Nir Zohar: So just talk about the sustainability of that. Is it due to the increasing contribution from partners' revenue? Is it due to the fact that you've reached enough brand awareness and scale where sales and marketing can become more of a fixed cost going forward? I know you gave guidance for this upcoming year about where sales and marketing are, but just talk through the pretty significant leverage you have and the potential for keeping that just as a fixed expense going forward. Thank you. Hey Mark, it's Nir. So I think you have touched on both drivers.

Chris Zhang: The extent of the pricing increase which products for example.

Chris Zhang: The level compared to 2022, you are thinking about and also the timing and how that Baxter how that factors into your guide this year. Thank you.

NIA: Hey, Chris It's near I think I'll kick this off and then hand, it over to <unk> to talk about how the modeling and the guidance part of it but generally.

Speaker Change: There is a variation obviously between different geographies and different kind of subscription in terms of what is the decreasing percentage I would say roughly 5% to 15% really depends on those different parameters.

Nir Zohar: And I would say that, definitely, partners play a part in it. But I think that more than anything, it is about the scaled brand. And you have to remember that, you know, we've seen a surge in our brand recognition in the years kind of leading up to 2023, mostly throughout the COVID era, which, you know, combined, you know, a very high increase in our marketing spend, because there was a high, extremely high demand, but also because so many people are now actually forced to go online in businesses and in areas where, naturally, before they weren't.

Speaker Change: And the cadence again because.

Speaker Change: For new new prices.

Speaker Change: Uh huh.

Speaker Change: In the U S and in Europe are already in place and they are going to be expanded globally.

Speaker Change: And then in terms of the cadence for the subscriptions obviously they are the only the only increases when they renew so that's something that's going to be in effect.

Speaker Change: Throughout this year and actually will overflow also into 2025, the Oregon share more about it.

Speaker Change: First on the guidance.

Speaker Change: So with regard to the price increase we obviously took it into consideration when we provided the guidance for those places that we actually tested.

Speaker Change: <unk> implemented the price increase.

Speaker Change: Very important to mention that it's not cover all of our customers not all of our Geos and this is something that.

Nir Zohar: That led us, kind of, late 2022, to the point where we started testing whether we can go and decrease the investment in marketing. And what will that do to our customers, to ourselves, and revenues on an ongoing basis? What we've seen, which we thought was very remarkable, that not only does it help us quickly stabilize and continue growing, even at a lower base of marketing, simply because a lot of the traffic we kind of lost by not buying it was replaced by organic traffic, which came through the strength of the brand. And even that traffic, again, you see that the core bases are smaller in essence, but it was a much higher intent traffic.

Speaker Change: We will probably test and if implemented.

Speaker Change: It will be an upside to the guidance.

Speaker Change: Okay.

Speaker Change: Understood that's super helpful.

Speaker Change: And if somebody I think.

Speaker Change: Quick follow up.

Speaker Change: Just for your revenue by region.

Speaker Change: Asia is a smaller part and usually fluctuates a little bit and if.

Our calculation is correct.

Asia and other regions actually saw a slight Q on Q decline can you maybe talk about the drivers behind that thank you.

Speaker Change: Yes.

Speaker Change: Are you talking about.

Speaker Change: North America revenue.

Speaker Change: Oh, sorry, Asia and either.

Speaker Change: Actually I don't either.

Speaker Change: I believe that.

Nir Zohar: So it generated actually better financial results. So from our standpoint, yes, we do believe that on the self-created side, the marketing investment can pretty much be a fixed cost, obviously, with some fluctuation over time, based on opportunities. Whereas when we look on the partner side of the business, I think, you know, 2024, especially with the fantastic results we're seeing on the studio side, in terms of the product, is where we're going to see more investment in marketing. Thank you, Nir.

Speaker Change: And other is like.

Speaker Change: As an impact of a.

Speaker Change: Kind of a small amount of a specific customer.

Speaker Change: And channel.

Speaker Change: So it's kind of fluctuated I think that you know obviously when you look at for example at Europe, and North America. It Hasnt been impacted by a specific product that we've launched only in the second half of.

Speaker Change: Last year.

Speaker Change: So we do see the effects will be tracked now I'm talking about specifically about Google ads I think that it's a great way to shoot to see that you know since we launched a new product.

Chris Zhang: And one moment for our next question. Our next question will come from Chris Zhang of UBS, Chris Yerlina. Hi, thanks for taking our question. As you discussed a little bit in the release in the shareholder update about the price increase that's currently underway, I just wonder if you could share a little more detail about the extent of the price increase on certain products, for example, and the level compared to 2022 you're thinking about, and also the timing and how that factors into your guide this year. Thank you. Hey Chris, it's Nir.

Speaker Change: It was a huge impact on a significant impact on our numbers, we showed the ability to introduce new products.

Speaker Change: But specifically with regard to Asia and other it is kind of a fluctuating really depends on the specific customers, especially coming from the Chinese activity.

Speaker Change: Okay.

Speaker Change: Understood Super helpful. Thank you so much.

Speaker Change: One moment for our next question.

Speaker Change: Okay.

Speaker Change: Our next question will be coming from Trevor Young of Barclays. Trevor Your line is open.

Trevor Young: Great. Thanks.

Nir Zohar: I think I'll kick this off and then hand it over to Lior to talk about, you know, the modeling and the guidance part of it, but generally, there's a variation, obviously, between different geographies and different kinds of subscriptions in terms of what the increasing percentage is. I would say roughly 5 to 15% really depends on those different parameters. And the cadence, again, because, you know, for new prices, in the U.S. and in Europe, they're already in place, and they're going to be expanded globally. And in terms of the cadence for these subscriptions, obviously, they only increase when they renew. So that's something that's going to be in effect, you know, throughout this year and actually will spill over into 2025. Lior can share more about, you know, his thoughts on the guidance. So with regard to the price increase, we are obviously, Please see the complete disclaimer at https://sites.google.com or at https://sites.google.com/. Very important to mention that it's not covering all of our castles, not all of our geos.

Trevor Young: First on the expanded partner revenue share can you just kind of walk us through how the accounting works there and the timing of the impact as I understand it. It's a contra revenue and may be recognized in arrears I'm just trying to understand how that potentially impacts <unk> later this year for our partners.

Trevor Young: Sure.

Speaker Change: So the revenue recognition will be on a net basis. So for example, if we got that.

Speaker Change: <unk> thousand dollars.

Speaker Change: From <unk> and <unk> share is about 20%. So we are going to recognize only the 800.

Over the period of the service.

Speaker Change: Any other subscription that we do very similar to that but it will it be just limited basis.

Speaker Change: So there wouldn't be even though impact on the profitability or the gross margin for example of the operating profit.

Speaker Change: I believe that you know this kind of.

Speaker Change: Program together with our with the amazing studio the product that we just launched you can think of that combination that it's a win win from one of its a great solution to our partners on the other end is a great.

Speaker Change: Business for them actually providing them the ability.

To be a SaaS model.

Speaker Change: Subscription base.

Speaker Change: For a very long period of time, because we are.

Lior Shemesh: This is something that we'll probably test and, if implemented, will be an upside to the guidelines. Understandable. That's super helpful.

Speaker Change: So I believe that it's not going to have an effect or any impact on the margins, but definitely we believe that it will be one of our significant growth drivers for the future.

Nir Zohar: And if I may, I think, just a quick follow-up, just for your revenue by region, Asia is a smaller part, and usually it fluctuates a little bit. And if our calculation is correct, Asia and other regions actually saw a slight Q on Q decline. Can you maybe talk about the drivers behind that? Thank you. Are you talking about North America revenue? Oh, sorry, it's Asia and the others.

Speaker Change: That's really helpful and as a follow up 33% margin in business solutions and <unk>, what drove that outsize step up was that pricing actions and Google workspace and then on the implied step down to 30% for fiscal 'twenty. Four is that just kind of a mix of more payments versus Google Workspaces.

Lior Shemesh: Wow, HMI. Well, I believe that, you know, Asia and other countries are like, as an impact of, you know, kind of a small amount of specific customers, you know, in channels. So, you know, it's kind of fluctuated. I think that, you know, obviously, when you look at, for example, Europe and North America, it has been impacted by a specific product that we launched only in the second half of last year. So we do see the effect of it right now. I'm talking specifically about Google Ads.

Speaker Change: So the many reasons I think that the number one reason is obviously you know our payments.

Speaker Change: Or unusually Q4, you know we told you early days and so on you have.

Speaker Change: Increase in GPP, increasing GP, which means that the increase in the volume of Friedman's when payment is going up so we get a better profit, we always say that and by the way one of the reasons why we believe that the gross margin will be the solution will be increased.

Speaker Change: In 2024.

Speaker Change: This is the reason, we see that payments scaling up and with that we see better margins.

Lior Shemesh: I think that it's a great way... Please see the complete disclaimer at https://sites.google.com or at www.globalonenessproject.org. But specifically with regard to Esha and others, it is kind of fluctuating and really depends on the specific customer, especially, you know, with regard to coming from the channel. That's super helpful.

Speaker Change: Great. Thank you.

Speaker Change: And this concludes our Q&A session I would now like to turn the conference back to the company for closing remarks.

Speaker Change: Thanks, everyone for joining us today, and we'll talk to you next quarter. Thanks.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Speaker Change: Okay.

Operator: Thank you so much. And one moment for our next question. Our next question will be from Trevor Young of Barclays. Trevor, your line is open.

Speaker Change: [music].

Speaker Change: Okay.

Yes.

Speaker Change: [music].

Lior Shemesh: Great, thanks. First, on the expanded partner revenue share, can you just kind of walk us through how the accounting works there and the timing of the impact? As I understand it, it's a contra revenue and may be recognized in arrears, and I'm just trying to understand, you know, how that potentially impacts REVs later this year for a partner. So the revenue recognition will be on a net basis. So, for example, if we got $1,000 from Palter, and his share is about 20%, so we are going to recognize only 8%. Please see the complete disclaimer at https://sites.google.com or at https://sites.google.com/policies. So there will be no impact on the profitability or the gross margin, for example, of the operator. I believe that, you know, this kind of.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: [music].

Lior Shemesh: To get there with the amazing Studio that we just launched, it's a combination that is a win-win from one end: it's a great solution for our partners. On the other end, it's a great business for them. Actually, you know, providing them with the ability to be a SaaS model or get them a subscription for a very long period of time, as we are. So I believe that it's not going to have an effect or any impact on the margins, but definitely, we believe that it will be one of our significant road drivers. That's really helpful.

Lior Shemesh: And as a follow-up, the 33% margin in business solutions in 4Q, what drove that outsize step up? Was that pricing actions in Google Workspace? And then on the implied step down to 30% for fiscal 24? Is that just kind of a mix of more payments versus Google Workspaces? So there are many reasons.

Speaker Change: Yes.

Speaker Change: [music].

Lior Shemesh: I think that the number one reason is obviously payments. Usually, in Q4, with all the holidays and so on, you have an increase in GPV. Please see the complete disclaimer at https://sites.google.com, and https://www.youtube.com.uk. Great, thank you.

Okay.

Speaker Change: [music].

Operator: And this concludes our Q&A session. I would now like to turn the conference back to the company for closing remarks. Thank you everyone for joining us today, and we'll talk to you next quarter. Bye.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change: Yes.

Speaker Change: [music].

Operator: .. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? https://www.youtube.com.uk https://www.youtube.com.uk https://www.youtube.com.uk https://www.youtube.com.uk Thank you for standing by. Welcome to the Wix Q4 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Speaker Change: Okay.

Speaker Change: [music].

Emily Liu: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Emily Liu, Director of Investor Relations. Please go ahead.

Speaker Change: Okay.

Speaker Change: [music].

Emily Liu: Thanks and good morning everyone. Welcome to Wix's fourth quarter and full year 2023 earnings. Joining me today to discuss our results is Avishai Abrahami, CEO and co-founder, Nir Zohar, our President and COO, and Lior Shemesh, our 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 included 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.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Great.

Speaker Change: Okay.

[music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

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Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Sure.

Avishai Abrahami: 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 and in our Interactive Analyst Center in the Investor Relations section of our website, investors.wix.com. With that, I'll turn the call over to Avishai.

Okay.

Speaker Change: [music].

Speaker Change: Okay.

Thank you.

Okay.

Avishai Abrahami: Thanks, Emily, and good morning. 2023 was a milestone year for Wix. We maintain a leadership position as the go-to web creation platform for any user and any business, grew market share for the best-in-class innovation, executed successfully on key initiatives, and achieved strong growth with record profitability. The incredible progress we made this year positioned us to accelerate growth in 2020. And we now expect to exceed the targets applied in the three years plan; we provided August Analytics, www.thevenusproject.com, Leo, we work for the D around our updated expectations and if. For me, 2023 will be remembered as the year of a pivotal advance in our product suite. We started off the year, labeled by others as a company facing potential AI disruption. Since then, we believe we've proven ourselves, not only to be.

Speaker Change: Sure.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Yes.

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Speaker Change: Yes.

Speaker Change: Okay.

[music].

Avishai Abrahami: A beneficiary of Broader Advice but also an AI leader among, We have spent the past eight years developing and embedding AI technology in our product, www.larryweaver.com. We have meaningfully extended an already impressive toolkit of AI capabilities to include new AI-powered features that will help Wix users create visual and written web content more easily, optimize design and content, write code, and monitor websites and businesses more. The key I, products introduced in the last year include an AI chat for Businesses, Responsive AI Design, AI Code Assistant, AI Meta Type Creators, AI Text and Image, and more several other AI designers. We have also recently released our AI site generator and have heard fantastic feedback so far. I believe this will be the first AI tool on the market that creates a full-blown, tailored, and ready-to-publish website integrated with relevant business and applications based on user. Our technology has benefited all our users.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Good day and thank you for standing by welcome to the <unk> Q4, 2023 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.

Speaker Change: Ask a question during the session you will need to press star one on your telephone you will the inherent automated message advising that your hand is raised to withdraw. Your question. Please press star. One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your Speaker Emily Liu Investor Relations. Please go ahead.

Avishai Abrahami: With both site creators and partners having shown excellent engagement over the past year, in fact, the majority of new users today are using at least one AI tool on their web creation. This has resulted in reduced friction and an enhanced declaration experience for our U.S. users, as well as increased conversion and improved monetization. We expect our AI technology to be a significant driver of growth in 2020 and beyond. We also leverage AI to improve many of our internal processes. In particular, research and development is a lot. This includes an open internal AI deployment platform that allows everyone at Wix to contribute to building AI-driven users, user features in 10. We also have a GNI-based platform dedicated to conversational assistants, which allows any product team at Wix to develop their own assistant tailored to specific user needs without having to start from scratch.

Emily Liu: Thanks, and good morning, everyone welcome to <unk> fourth quarter and full year 2023 earnings call. Joining me today to discuss our results are obviously other hanmi CEO and co founder Nir, Zohar, President and CEO, COO and <unk> Shemesh CFO.

Emily Liu: 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 and in our interactive Analyst Center on the Investor Relations section of our web site investors <unk> dot com with that I'll turn the call over to RBC.

Avishai Abrahami: We are able to develop and release high-quality AI-based features and tools efficiently and at scale. We expect AI to continue to be a major competitive advantage as we build a product suite and more AI tools to make the web creation experience more frictionless for you. As well as helping to improve operations, in addition to AI, we made a huge step in our offering for partners with the introduction of Studio. A Cornerstone Partners Web Development Plot. Since August, more than 500,000 agencies and freelancers have created studio accounts. And we currently have more studio premium subscriptions than we expected to have. Most notable.

RBC: Thanks, Emily and good morning, everyone.

RBC: 2023 was a milestone year for weeks, we maintain our leadership position as the go to web creation platform for any user in any business.

RBC: <unk> market share for the best in class innovation executed successfully on key initiatives and achieved strong growth with record profitability the.

Speaker Change: The incredible progress we made this year position us to accelerate growth in 2024.

Avishai Abrahami: Nearly half of our student accounts were created by new partners who had not created on Wix. This strong start is a testament to the trailblazing innovation of Studio and our success in winning market share amongst professionals and larger entities, with all the feedback. And based on our performance so far, I am confident that Studio World is our most successful product today since our initial investment in the professional market in 2019. We continue to see considerable momentum, with partners' revenue growing nearly 40% year-over-year in the most recent two quarters. This growth has been driven by the incredible strides we've made in building a best-in-class product tailored for agencies and freelancers, Mark. And we have no plans to slow the number of improvements, and new exciting tools are on the way for partners.

Speaker Change: And we now expect to exceed the targets applying the free use plan.

Speaker Change: We provided at our August analyst day.

Speaker Change: Right.

Speaker Change: Leo we work for the details.

Leo: Our updated expectation in a few minutes.

Leo: For me 2020 free will be remembered as a pivotal.

Leo: Advanced in our product suite, we started off the year.

Leo: Labeled by address the company facing potential disruption.

Leo: Then we believe with proving ourselves not only to be.

Leo: And beneficiary of.

Leo: Florida investment.

Leo: But also in AI leader among peers.

And we have spent the past eight years, developing and embedding AI technology in our product as well as the gross hour operation This year.

Leo: We meaningfully extended.

Leo: Impressive toolkit of AI capabilities to include New AI powered features that will hit <unk> user create visual.

Leo: And Rick in web content more easily optimize design and content layout right chord and manage their website and businesses more efficiently.

Leo: The key.

Leo: Products introduced in the last year include an AI chat experience for businesses responsive AI design AI code assistant AI meta tag creators and Texan image creators amongst several of our other AI design tools.

Nir Zohar: I'd like to share a bit more about the business fundamentals underpinning the strong top-line performance achieved in 2023 and the primary growth drivers that we expect to accelerate to accelerate growth in 2025. The 2023 cohort performed extremely well and was among the strongest non-COVID cohorts in our history. Our Q123 cohort generated $60.4 million in cumulative bookings through its first four quarters.

Leo: Also recently released our AISI generator and have heard fantastic feedback so far I believe this will be the first AI tool on the market that creates a full blown tailored and ready to publish website integrated with relevant business application based on user product.

Leo: Our technology is.

Leo: Benefited all our users.

Leo: With Berkshire creators and partners, having shown excellent engagement over the past year in fact, the majority of new users to date.

Nir Zohar: This is the second highest level of community bookings in this timeframe, behind only the Q1 2021 cohort, which benefited greatly from COVID tailwind. This performance is particularly impressive given the significantly smaller user base of the Q1-23 cohort compared to previous cohorts due to our streamlined marketing strategy, targeting higher intent users with lower amounts of acquisition marketing investment. Our success here is a testament to the scale of the Wix brand and the value our platform provides to users. This strong cohort behavior also demonstrates the solid fundamentals of our business, including steadily improved conversion and monetization. ARPS improved to more than $253 in 2023, up 10% year over year. This was driven by a continued mixed shift to higher tiered packages, higher pricing, and increased adoption and usage of business solution products as we continue to onboard higher intent and commerce-oriented users, particularly partners. Existing court behavior also improved compared to the prior year, demonstrated by net revenue retention increasing to 105% in 2023 from 102% in 2022.

Leo: Are using at least one AI tool, although web patient journey. This has resulted in a just friction and enhanced declaration experience for our users as well as increased conversion and improve monetization, we expect our AI technology to be a significant driver of growth in 2024.

Leo: <unk> and beyond.

Leo: We also leverage AI to improve many of our internal processes that weakness, especially research and development velocity. This include an opening 10 deployment platform that allow for everyone at weeks to contribute to building guide driven use it.

Leo: User features in tandem.

Leo: We also as a journey I best platform dedicated to conversion or conversational assistant, which allow any product team at tweaks to develop their own assistant tailored to specific user needs without having to start from scratch with these platforms.

Leo: We're able to develop and release high quality AI based features and tools efficiently and at scale. We expect to continue to be a major competitive advantage for us as we build our product suite and more AI tools to make web creation experience more frictionless for our users.

Leo: Well it is helping to improve operations. In addition to AI when made a huge step in our offering for partners. This year with the introduction of studio.

Leo: A cornerstone partners web development platform.

Nir Zohar: We now expect existing USO cohorts to generate over $16.2 billion in bookings over the next 10 years, illustrating the power of our business model and differentiated product offering. Turning to 2020 to 2024, Lior will share the details of our outlook in a moment, but before he does, I want to highlight the drivers that we believe will accelerate booking growth in the coming years. First, the launch of Wix Studio has been great.

Leo: Not created on weeks before.

Leo: This strong start is a testament to the Trailblazing innovation of studio M.

Leo: And our success in winning market share amongst professionals and large agencies with all the feedback and our performance so far.

Leo: I am confident that studio, which is our most successful product to date.

Leo: Since our initial investment in the professional market in 2019, we continue to see considerable momentum with partners revenue growing nearly 40% year over year in the most recent two quarters. This growth has been driven by the incredible strides we've made in building a best in class products tailored for the agency and freelancers market.

Leo: And we have no plans of slowing.

Leo: A number of improvement and new exciting tools underway for partners, we expect to studio.

Leo: Border professional product offering to be meaningful catalysts of growth in the coming years.

Looking ahead for 2024, I am excited to build upon the success of the past year.

Leo: Thank you for the entire <unk> team. It is because of you and your hard work that I am confident that 2024 will be another year of incredible milestone an unbounded potential with that over to you.

Speaker Change: Thank you I'll be shy.

I'd like to share a bit more about the business fundamentals underpinning the strong topline performance achieved in 2023.

Speaker Change: The primary growth drivers that we expect to accelerate to accelerate growth in 2024.

Speaker Change: The 2023 cohorts performed extremely well and was among amongst them strongest non Korean courts in our history.

Speaker Change: Our Q1, 'twenty three cohort generated $64 million in cumulative bookings through its first four quarters.

Speaker Change: This is the second highest level of community bookings in this timeframe behind only Q1, 'twenty, one cohort, which benefited greatly from Colgate tailwind.

Speaker Change: This performance is particularly impressive given the significantly smaller user base of the Q1, 'twenty three cohort compared to previous quarters due.

Speaker Change: Due to our streamlined marketing strategy targeting higher intent users with lower amounts of acquisition marketing investment.

Speaker Change: Our success here is a testament to the scale of the weeks brand and the value our platform provides to users.

Speaker Change: This strong core behavior also demonstrates the solid fundamentals of our business, including steadily improved conversion and monetization.

Lior Shemesh: Thanks Nir. We finished 2023 on a very strong note, and we believe Brutus is on a great path going into 2024 and 2025.

Speaker Change: <unk> improved to more than $253 in 2023 up 10% year over year drill.

Lior Shemesh: As our business fundamentals continue to improve... We have seen early success with Wix Studio and our AI product......as well as in improving the macro environment, giving us confidence in our ability to accelerate year-over-year bookings growth... The Bulletproof Executive, 2013. We believe we're just on the track to accelerate year-over-year revenue growth in 2025. We now expect to outperform the 2024 targets we shared at our analyst day in August. I believe that we will significantly surpass the rule of 40.

Speaker Change: Existing core behavior also improved compared to the prior year derma.

Speaker Change: Demonstrating by net revenue retention, increasing to 105% in 2023 from 102% in 2022.

Lior Shemesh: Before I go through the details of our 2024 outlook, I want to quickly summarize our Q4 and full year of 2024. Please note that all financial data are non-GAAP unless otherwise noted... The yield for total revenue was $404 million, up 14% year-over-year. Revenue growth was driven primarily by partners' revenue, which grew 38% year-over-year. As Avishai mentioned, the studio is off to a great start. The Bulletproof Executive 2013, Creative Substitutions revenue in Q4 grew nearly to $12 billion. Business Solutions revenue in Q4 Group 20, We expanded the total gross margin in Q4 to $70 million. Operating the In-Carb Group to Nearly $25 million The Bulletproof Executive 2013, Q4 – Sales and marketing expenses grew quarter-over-quarter to $92 million.

Speaker Change: Turning to 2022 2024.

Speaker Change: We will share the details of our outlook in a moment, but before he does I want to highlight the drivers that we believe will accelerate bookings growth in the coming year.

Speaker Change: First the launch of weak studio has been a great success, we have seen existing partners build more projects in weeks and many new partners join our platform.

Speaker Change: We believe studio will continue to bring an increase to the activity of partners on Wix, which will drive growth in overall monetization of our partner cohorts.

Speaker Change: Second we expect conversion of <unk> to trend positively.

Our leading product suite continues to resonate and enables users to meet their goes online.

Speaker Change: Third is obviously I mentioned uptake of the milestone AI initiatives of 2023 has been incredible and we expect to see ramping conversion and monetization benefits from our entire AI toolkit for both south creators and partners this year.

Lior Shemesh: We are increasing our investment in Wix Studio. While we expect to continue gaining leverage on marketing due to our streamlined marketing strategy, especially with self-creation, we plan to continue investing in the Wix Studio brand. Thank you for watching. Be safe out there.

Speaker Change: Fourth we expect continued success in bringing on new businesses and commerce users that generate GPP and adopt business applications.

Lior Shemesh: Including headquarters and its structuring cost was over 19 million dollars. 22% of revenue, and many more. Thank you. Moving on to 2023 full year results, total revenue grew to 1, http://TheBusinessProfessor.com, ARR was $1.19 billion, up over 10% year-over-year. We ended 2023 with a total gross margin of 68%. It's nearly 500 basis points compared to 2012.

Speaker Change: We will also benefit from the compounding growth of <unk> from existing commerce users.

Speaker Change: Finally, we have recently implemented higher pricing for new and existing subscription. This recent price action as part of our goal of aligning the continuously growing value we deliver to users through the price. They pay our users have responded extremely well historically.

Speaker Change: Strong retention within our court during past increases, which provides us with the confidence that our approach to pricing is working.

Lior Shemesh: Throughout the year, we benefited from improved efficiencies in hosting and infrastructure. Optimization of Support Codes Partially Aided by Integrating AI into Workflows, Credit Subscription Gross Margin Expanded to 82% Ltd. Business Solution Growth Margin grew to 29% For the full year, as we continue to benefit from it, www. TheBusinessProfessor.com writes, In 2023, we generated a total of $246 million in free cash, including headquarters and restructuring. Marginal.

Speaker Change: Following our price increases in 2019, and 2022 as well as this one we believe there is still considered.

Speaker Change: <unk> room to continue to increase price as we innovate and deliver incremental value to users.

Speaker Change: We expect to continue to explore potential price action at a similar cadence going forward.

Speaker Change: Because of these drivers and the continued momentum we've seen this year. So far we are confident that our business will experience an acceleration in growth in 2024.

Speaker Change: With that I will now hand, it over to Laura to walk through more details on our financial 2020 for outlook and improved 2025 expectations.

Lior Shemesh: This includes BREXIT even free cash flow in our partnership, a significant In one year ahead of our three-year, This was a result of strong sustained growth as well as improved growth margin and meaningful operating leverage driven by the broader efficiencies implemented over the past year. We expect to continue to generate incremental margin improvements from the continued scaling of our core measures and the Stable Operating Space. As our business continues to grow, and as a result, we now expect to significantly exceed the Partners Free Cash Flow Margin target. 2024 and 2025 as outlined in our. I'm also happy to report that we finished 2023 with a GAAP net income of $33 million, our first year of GAAP profit. This profitability was due to the careful management of costs throughout the last couple of years, including stock-based compensation costs, which declined as a percent of revenue. For the third straight year, The Fantastic Growth and Incremental Profitability of Our Businesses. We re-accelerated year-over-year revenue growth due to the strong fundamentals of our user core. 2012 University of Georgia College of Agricultural and Environmental Sciences UGA Extension Office of Communications and Creative Services, Continued Returns from the Cost Efficiency Capture.

Laura: Thanks, Nir, we finished 2023 on a very strong note, which we believe puts us on a great path going into 2024 and 2025.

Laura: As our business fundamentals continue to improve.

Laura: We have seen early success with weak studio AI.

Laura: AI products.

Laura: Well as an improving macro environment, giving us confidence in our ability to accelerate year over year bookings growth in 2024, which we believe will just on the track to accelerate year over year revenue growth in 2025.

Laura: We now expect to outperform the 2024 targets, we shared at our analyst day in August and believe that we will significantly surpass the rule of 40 in 2025.

Laura: Before I go through the details of our 2020 full outlook I want to quickly summarize our Q4 and full year of 2020 results note that all financial data are non-GAAP unless otherwise noted.

Laura: Creating subscriptions revenue in Q4 grew nearly 12% year over year and business solutions revenue in Q4 grew 20% year over year.

Laura: We expanded total gross margin in Q4 to 70% and operating income grew to nearly $65 million.

Laura: 16% of revenue.

Laura: In Q4 sales and marketing expenses grew quarter over quarter to $92 million rollout as we increased our investment in the weeks to Joe Brent.

We expect to continue gaining leverage in our marketing due to our streamline marketing strategy, especially with self creators we plan to continue investing in the studio grant in 2024.

Laura: Q4 free cash flow, excluding headquarters in restructuring cost was over $19 million or 22% of revenue as we continue to benefit from high operating efficiency.

Laura: Moving on to 2023 full year results total revenue grew to $1 56 billion or 13% year over year and creative subscriptions.

Laura: <unk> was $1 19 billion up over 10% year over year. We ended 2023 with a total gross margin was 68% an improvement of <unk>.

Laura: 500 basis points compared to 2022.

Lior Shemesh: We have implemented them over the last couple of years, and I have seen strong incremental progress. We believe that these results put us in a very strong position to accelerate growth into 2024, as our successful efforts in implementing operating-efficient give me confidence we can continue to generate incremental profit. And I want to spend the rest of my time on our expectations for 2025. We are reintroducing annual bookings guidance due to the improved visibility and confidence in our bookings.

Laura: Throughout the year, we benefited from improved efficiencies in hosting and infrastructure costs and optimization of our bulk water, partially aided by integrating AI AI into our workflows.

Laura: Subscription gross margin expanded to 82% in 2023 and business solution gross margin grew to 29% for the full year as we continue to benefit from improving Biogen and wix payments.

Laura: In 2023, we generated a total of $246 million in free cash flow, excluding headquarters and restructuring costs.

Laura: <unk>, 16% of revenue ahead of our prior expectations and guidance.

Laura: This included break even free cash flow in our polymer business a significant milestone and one year ahead of our three year plan. This was a result of strong sustained growth as well as improved gross margin and meaningful operating deleverage driven by the broader efficiencies implemented.

Lior Shemesh: The Bulletproof Executive 2013, For the full year 2024, we expect total bookings of $1.78 to $1.81 billion. The Bulletproof Executive 2013, We expect year-over-year growth of total bookings to accelerate in the second half of 2024 to 50%, at the high end of the guidance. In particular, the acceleration is expected to be primarily in creative... Bringing it to double-digit year-over-year growth, the second half of Anticipated Growth Positions the Business to Achieve Accelerating Year-over-Year Revenue Growth in 2025. We will walk you through the drivers of our bookings growth in 2024, and you can find additional information in the shareholder app. For the full year 2024, we expect total revenue to be $1.73 to $1.76 billion, or $11 billion. 13% year-over-year.

Laura: Over the past two years.

Laura: We expect to continue to generate incremental margin improvements from the continued scaling of our e-commerce business and the stable operating expenses base as our partner business continued to grow.

Laura: As a result, we now expect to significantly exceed the positive free cash flow margin target for 2024, and 2025 as outlined in our three year plan.

Laura: I'm also happy to report that we finished 2023 with GAAP net income of $33 million, our fifth year of GAAP profitability.

Laura: These results demonstrate the fantastic growth and incremental profitability of our business.

Laura: We re accelerated year over year revenue growth due to our strong fundamentals of our user growth.

Laura: And the strong cadence of product innovation. The continued returns from the cost efficiency capture we have implemented tweaks over the last couple of years and the half drove and drove strong incremental profit.

Lior Shemesh: We expect revenue in Q1 2024 of $415-419 million, or 11-12% year-over-year. Thank you very much, and plan to operate with the same efficiency in 2024. The Bulletproof Executive 2013, One of you will be a... For the full year 2024, we expect a land gap and total growth margin. For more information, visit www.

Speaker Change: I want to spend the rest of my time on our expectations for 2024.

Speaker Change: We are reintroducing annual bookings guidance due to the improved visibility and confidence in our business are stable and positively trending macro environment and strong behavior, particularly in our polymer business for.

Speaker Change: For the full year 2024, we expect total bookings of $1 78 to $1 $81 billion.

Lior Shemesh: FEMA.gov. We also expect to generate additional leverage due to minimal growth in operating expenses year over year. We expect NAMGAP operating expenses to be 51-52% of revenue for the full year, also better than our August plan, and NAMGAP sales marketing to remain similar to 2020, at roughly 23 to 24 percent of revenue. We will continue with marketing activities related to Wix Studio throughout 2024 as we capitalize on the growth we have seen since its launch. We anticipate that our strong growth in operating efficiency will generate positive gap operating profit and net income in 2024. We expect to generate free cash flow excluding headquarters costs of $370 to $400 million.

Speaker Change: 12% to 14% year over year, an acceleration from 2023.

Speaker Change: We expect year over year growth of total bookings to accelerate in the second half of 2024% to 15%.

Speaker Change: As.

Speaker Change: At the high end of the guidance range in.

Speaker Change: In particular, the acceleration is expected to be primarily in creative subscriptions bookings, bringing it to double digit year over year growth in the second half of 2024.

Speaker Change: This anticipated growth positions the business to achieve accelerating year over year revenue growth in 2025.

Speaker Change: Walk you through the drivers of our bookings growth in 2024, and you can find additional information in the shareholder update.

Speaker Change: For the full year 2024, we expect total revenue to be $1 73 to $1 76 billion.

Speaker Change: Moving to 13% year over year, we expect revenue in Q1, 2024 $450 million to $419 million or 11%, 12% year over year, we continue to operate the business in an efficient manner.

Evidenced by the meaningful operating leverage we generated in 2023 on both a GAAP and non-GAAP basis.

Lior Shemesh: 21 to 22, revenue in 2024. We expect this free cash flow guidance, in combination with our shared re-purchase, will translate to more than $6 in free cash flow per diluted share in 2021. Ahead of our time.

Speaker Change: We plan to operate with the same efficiency in 2024 and expect strong growth in gross profit due to anticipated gross margin improvement on a year over year basis.

Speaker Change: For the full year of 2024, we expect non-GAAP total gross margin of 68% to 69% with non-GAAP business solution gross margin to be approximately 30% for the full year ahead of the plan. We shared in August we also expect to generate additional leverage due to minimal growth in operating expenses.

Lior Shemesh: As we continue to responsibly manage dilution, we expect stock-based compensation for the third consecutive year as a percent of revenue to be approximately 30%. Revenue in 2024 in line with our three, We expect capital expansions, including costs associated with our new headquarters build out. For approximately $7-$10 million in 2024, we will incur the final cost of our new headquarters in the first half of 2021, and Anticipate this course to be roughly 8-10 years old.

Speaker Change: Year over year.

Speaker Change: <unk> 24, as we capitalize on the growth we have seen since its launch.

Speaker Change: We anticipate that our strong growth and operating efficiency will generate positive GAAP operating profit and net income in 2024.

Lior Shemesh: We are very excited about the upcoming year. We believe we have positioned ourselves to re-accelerate growth. The Bulletproof Executive 2013, With that, we will now take a few questions. To ask a question during this session, you will need to press Star 1-1 on your telephone. To withdraw your question, please press Star 11 again.

Speaker Change: We expect to generate free cash flow, excluding headquarters cost of $370 million to $400 million.

Speaker Change: Or 21% to 23% of revenue in 2024.

Speaker Change: We expect the free cash flow guidance in combination with our share repurchase activity will translate to more than $6 in free cash flow per diluted share in 2024.

Operator: Please stand by while we compile the Q&A roster and one moment for our first question. Our first question will be from Elizabeth Porter of Morgan Stanley. Your line is open, Elizabeth.

Speaker Change: Of our three year plan.

Speaker Change: As we continue to responsibly manage the dilution, we expect stock based compensation expenses to decline for the third consecutive year as a percent of revenue to approximately 13% of revenue in 2024 in line with our three year plan.

Elizabeth Porter: Great, thank you so much. Congratulations on a strong quarter. I wanted to follow up on some of the comments about better conversion rates, you know, both at the Wix studio capturing pros that didn't continue through the funnel, and also self-creators with AI reducing friction to build a website. When we look at the premium subs as a percentage of registered users, that metric has been pressured for the last few years. So should we see this ratio start to improve in 2024? And if not, where would you point us to to track the success of better conversion rates? Thank you. Well, I think, hey, Elizabeth, it's me here.

Speaker Change: We expect capital expenditures, including costs associated with our new headquarters build out of our crop of approximately 7% to $10 million in 2024, we will incur the final cost of our new headquarters in the first half of the year and anticipate these costs to be roughly $8 million to $10 million.

Speaker Change: We are very excited about the upcoming year, we believe we have positioned us to reaccelerate growth and generate incremental profitability.

Speaker Change: With that we will now take your questions.

Speaker Change: Certainly.

Speaker Change: Ask a question during this session you will need to press star one on your telephone.

Nir Zohar: I think that, generally, Premium subs, whether as a percentage or as an absolute number, is probably not the best KPI to look at since it may be, you know, significantly impacted by different things like, you know, our general goal to drive more, higher intent, better users that are willing to spend more on the platform. You know, it goes towards pricing, it goes towards, generally, you know, the changes we've made in marketing and more. So, we definitely, you know, in some cases, have re-accelerated some of the subs activity over time, but when we look at the conversion rates, we look at it per geography, separately per different sources for traffic, and definitely in a different manner when we look at the subs creators and as well as the partners.

Speaker Change: To withdraw your question. Please press star one again, please standby, while we compile the Q&A roster and one moment for your first question.

Speaker Change: Okay.

Elizabeth Quarter: Our first question will be coming from Elizabeth quarter of Morgan Stanley. Your line is open Elizabeth.

Elizabeth Quarter: Great. Thank you so much congrats on a strong quarter.

Elizabeth Quarter: I'd just follow up on you made a comment about better conversion rates, both with studio capturing problems that didn't continue through the funnel and also yourself creators with AI, reducing friction you build a website.

Elizabeth Quarter: Let me look at the premium subs as a percentage of registered users.

Elizabeth Quarter: Patrick has been pressured for the last few years.

Elizabeth Quarter: We see this ratio start to improve in 2024, and if not could absorb would you point us to to track the success on better conversion rates. Thank you.

Nir Zohar: We believe that the best thing to look at is actually the cohort value, which I think, and very easily, we've demonstrated that not only has stabilized, but it's actually an increasing trend, and in fact, we're gaining, getting to the point where it's close to surpassing even the heights of the COVID cohorts, which are obviously the strongest ones in our industry. And I think that's the best way to understand the real impact that all of these improvements to the product and the business are having under the hood. Great, thank you.

Speaker Change: Well I think hey, Elizabeth Samir.

Speaker Change: Think that generally.

Speaker Change: Premium subs, where there is a percentage or as an absolute number is probably not the best API to look at.

Speaker Change: Since it may be significantly impacted by different things like.

Speaker Change: Our general goal to drive to get more higher intent better.

Speaker Change: Better users that are willing to spend more on our platform.

Speaker Change: It goes towards pricing it goes towards generally the changes we've done in marketing.

Lior Shemesh: And just as a follow up, I wanted to ask about just the algorithm between top line revenue growth and investment. Given your initial three-year plan suggested roughly unchanged revenue growth, and now we're seeing an improvement with growth expected to accelerate in 2025, you know, how do you think about the levers of investment, you know, understanding you guys are still exceeding the rule of 40 in 2025? It would be helpful to understand the framework around the opportunity to invest versus maybe less of a need given the prior investment before. Thank you.

Speaker Change: And more so.

Speaker Change: We definitely in some cases have reaccelerate some of the south activity over time, but when we look at the conversion rates, we look at the liquidity per geography separately.

Speaker Change: Different sources for chassis can differently in a different manner. When we look at the stats creators and as well as the as the partners. We believe that the best thing to look at these actually.

Speaker Change: <unk>.

Speaker Change: Cohort value.

Speaker Change: Which I think in very easily we have demonstrated that noted only has stabilized it's actually on an increasing trend and in fact, we're gaining getting to the factory to the point, where it's close to surpassing even the height of the of the Covid cohorts.

Operator: So, you know, Elizabeth, as we mentioned before, I think that, obviously, to significantly overpass the... The Bulletproof Executive 2013, It has to be a combination of both profitability and growth. The reason why we see right now that growth is accelerating in the second half of 2024 is, for us, a great indication that we will see acceleration of revenue in 2025. Remember that most of the incremental revenue that we get goes to the bottom line in terms of profitability as we keep our operating costs more or less at the same level. I expect that this acceleration of growth will drive further free cash flow, which will be demonstrated in a much better or significant surpassing the rule of law. Great, thank you.

Speaker Change: Obviously are the strongest ones in our history.

Speaker Change: And I think that's the best way to to understand.

Speaker Change: The real impact that all of these improvements on the on the product and the business are having on there are kind of under the hood.

Speaker Change: Okay.

Speaker Change: Great. Thank you and just as a follow up.

Speaker Change: I wanted to ask on <unk>.

Speaker Change: Just the algorithm between top line revenue growth in investment given you're at Michelle three year plan, suggesting roughly unchanged revenue growth.

Speaker Change: Seeing an improvement with growth expected to accelerate in 2025.

Speaker Change: Do you think about the elaborate a investment understanding you guys are still exceeding the rule of 40 in 2025, just helpful to understand the framework around the opportunity to invest versus maybe less of a need given the prior in person before thank you.

Brent Thill: And one moment for our next question. Our next question will be coming from Brent Thill of Jefferies. Your line is open, Brent.

Speaker Change: So.

Speaker Change: Elizabeth I think we mentioned before I think that you know the only way of obviously you know to a significantly overpowered.

Lior Shemesh: Thank you. This is John Bion on behalf of Brent Thill. The question is on booking growth. You mentioned it's going to accelerate, and half of the incremental will come from several factors you mentioned, like studio creators, content, so on. Is there a way, when you think about them in terms of, you know, ranking them in terms of meaningful contribution in terms of the level of confidence you have behind each of those?

Speaker Change: The rule of 40.

Speaker Change: <unk> has to be a combination of both profitability and growth.

Speaker Change: The reason why you would see right now that growth is accelerating in the second half of 2024 for US is a great.

Speaker Change: Indication.

Speaker Change: That we will see acceleration of revenue in 2025.

Speaker Change: Remember that most.

Most of most of the incremental revenue that we get goes to the bottom line in terms of profitability as we keep our operating expenses more or less at the same level.

Speaker Change: Therefore, I expect that this acceleration of growth will drive further.

Speaker Change: Free cash flow, which will be demonstrated in a much better.

Speaker Change: Significant surpassing the rule of 40.

Speaker Change: Great. Thank you.

Speaker Change: And one moment for our next question.

Speaker Change: Our next question will be coming from Brent Thill of Jefferies. Your line is open Brian.

Speaker Change: Alright. Thank you this is John <unk> on behalf of <unk>.

Brent Thill: <unk> question is on bookings growth you mentioned is going to accelerate.

John Byun: Half of that incremental.

Brent Thill: Will come from several factors you mentioned like studio create in his comments and so on.

Brent Thill: Is there a way when you think about that in terms of <unk>.

Brent Thill: Ranking them in terms of meaningful contribution.

Brent Thill: I'm just a level of confidence you have behind.

Lior Shemesh: I think that the first reason is definitely the launch of new products. You know, at the end of the day, we are technology, a product company. And this is how we drive our growth, mostly from new features and new products. And this is what we did in the past, and we will continue to do in the future. So definitely, it's coming from the partners business, with launching studio, it was a great, We mentioned a few times about the numbers of new accounts with more than 50% on you. I think that for us, it's a great proxy to the fact that we are going to see much more, that it will be a significantly major growth driver for us in the next few years. The second one is, you know, everything that we've done with AI. We see a tremendous..., www.larryweaver.com. And, as you know, as always, the third one is about trying to optimize our pricing strategy. And this is what we've done in the past.

Brent Thill: Behind each of those thank you.

Speaker Change: Yes. So definitely you are now looking at the next <unk>.

Speaker Change: Couple of few things.

Speaker Change: It will be much better to look at 2024 and 2025, because obviously, it's a continuation of that remember that we are a SaaS model. So every time that we launched a new product.

Speaker Change: The time responses, we see more and much more contribution obviously this is why by the way we believe that the second half of 2020 for the growth is going to be accelerated.

Speaker Change: But then again also 2025 will be much better than 2024, I think that the first reason indefinitely.

Speaker Change: Launching new products.

Speaker Change: At the end of the day, we are technology, a product company and this is how we drive our growth.

Speaker Change: Mostly from from new feature from new product and this is what we did in the past and we'll continue also to do in the future. So definitely its coming from the powerful business with launching studio it was a great.

Speaker Change: Launch for us with.

Speaker Change: We see traction in the market, we see the demand.

Speaker Change: See how all agencies uses I think as you know we mentioned a few times about the number of new accounts.

Speaker Change: With more than 50% of our Nu.

Speaker Change: I think that is for us it is a great proxy to the fact that we are going to see much more of that it will be significantly.

Speaker Change: Significantly.

Speaker Change: The major growth driver for us in the next few years the second one is.

Speaker Change: Everything that we've done with AI, we see a tremendous.

Speaker Change: Results out of it which we believe that will continue into the next year.

Lior Shemesh: We'll continue to do so in the future. Thank you, and then maybe a follow-up question. I think Dr. Schwartzman mentioned a fault reason, which is the overall demand that we see on the macro level. Actually, that kind of leads into the question I had was when you mentioned positively trending macro in your prepared remarks. I was wondering if you could share more details on what you're seeing specifically. Hey, well, I think, you know, generally, and, you know, it's still, it's still not massive, but definitely, I think we're seeing a positive change in behavior in terms of, you know, the businesses being formed on the platform in terms of the GPV tool that is going through the websites of our users, both on the self-created side and the partner side. You have to also remember that we have a very wide activity of commerce, so not only shops but also, you know, people are selling, scheduling time, selling digital goods, booking, selling tickets to events, booking hotels, etc.

Speaker Change: And as you know is always the first one is about trying to optimize our pricing strategy and this is what we've done in the past we will continue to do in the future.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Mentioned, unlike a false false reason, which is the overall demand that we see.

On a macro basis.

Speaker Change: Yeah.

Speaker Change: So and actually that's the kind of leasing to do Dan a question I had was when you mentioned positively trending macro in your prepared remarks wondering if you could share more details what actually you're seeing.

Speaker Change: Specifically thank you.

Speaker Change: Okay, well I think generally.

It still.

Speaker Change: It's still.

Dan: Not massive but definitely I think we are seeing a positive you attending behavior in terms of.

The business is being formed on the platform in terms of the <unk>.

Dan: To get going through the website.

Dan: Far off.

Dan: Of our users both on the Susquehanna side and the partner side.

Dan: You have to also remember that we have a very wide activity of commerce, so not only shops.

Dan: Shops, but also people are selling scheduling time selling.

Nir Zohar: And I think that in most of these cases, we're seeing a positive upward trend. So I think that's what makes us feel a bit more comfortable about the macro. Thank you very much.

Dan: Digital goods.

Dan: Booking.

Dan: Selling tickets to events booking hotels et cetera, and I think that in most of these cases, we are seeing a positive upward trend.

Ygal Arounian: And one moment for our next question. And our next question will come from Ygal Arounian of Citi. Your line is open. Hey, good morning, everyone.

Dan: So I think that's what makes us feel a bit more comfortable about the macro economy.

Speaker Change: Thank you very much.

Speaker Change: And one moment for our next question.

Speaker Change: And our next question will come from Yigal Iranian.

Ygal Arounian: Of Citi. Your line your line is open.

Ygal Arounian: Hey, good morning, everyone.

Ygal Arounian: Great.

Ygal Arounian: The product the strength of the product pipeline, all that information here, but kind of the expectations for more coming through now if theres anything that you can comment on.

Ygal Arounian: On the new things that are coming up in the pipeline that you're talking about here and maybe specifically on AI site generator.

Ygal Arounian: If there's more you could share on what.

Ygal Arounian: Early users are seeing what youre seeing from them and when we could expect a more general launch of that.

Speaker Change: Of course, I think that that will decide generator. So we released a BARDA would close version one.

Speaker Change: It's.

Speaker Change: A gateway for people to start with the website, meaning that you come in and you say you know I am.

Avishai Abrahami: And AI will interview you about what makes your business unique, where you're located, how many people, tell us about those people, and the staff members. And as a result, we'll generate a website for you that has all the great content. And the content will be text and images. The other thing that will actually get you to this experience is if you do it. Choose how you want the design to look, and the AI will generate different designs for you. So you can tell it, "Well, I like this thing." I want a variation on that. I don't like the colors; please change the colors, or I want colors that are more professional, or I want colors that are blue and yellow.

Speaker Change: A spa.

Speaker Change: New York City.

Speaker Change: I specialize in some specific things and.

Speaker Change: And the AI will interview on the what makes your business unique where youre located how many people tell us about those people and the staff members and as a result of regenerate the website for you that is.

Speaker Change: As all the great content.

Speaker Change: And content will be text and images.

Speaker Change: The other thing that's been really actually get you to this experience where you can.

Speaker Change: Choose how we want to have the design look like and the AI will generate different designs for you. So you can tell it like this thing I wanted a variation on that I don't like the colors bleaching the colors.

Speaker Change: I want colors that are more professionalized wine colored blue and yellow and then I will do it for you on data and you can also say that I don't really like this is that going to generally something very different or generated small variation of that in many ways a bit cumulatively journey, what imogen is doing with their images, we are doing with the full blown website.

Avishai Abrahami: And then I will do it for you. On the other hand, you can also say, well, I don't really like this design. Can you generate something very different or generate a small variation of that?

Avishai Abrahami: In many ways, a bit similar to mid-journey, what mid-journey is doing with the images, we are doing with the full-blown website. And all of that is probably 70% of the website that you need on average, right? Sometimes it's 95%, but sometimes it's less than that.

Speaker Change: Okay.

Speaker Change: And there is all of that is something that is probably 70% of the website that you need to have on average Tom damaged, 95%, but sometime its less than that so let's give you an amazing way to start.

Speaker Change: Your website and shortened.

Speaker Change: Shortened the amount of work that you need to do by about 70% to 80%.

Speaker Change: I think it's fantastic and very exciting and it's even more exciting considering that we have some really cool ideas. So now to ticket even further and make it a better product that not just create more beautiful websites, but also is more tightly coupled with your vision.

Speaker Change: <unk> business.

Speaker Change: And so we're going to see is a lot of that is coming there is a lot of things that we're working on mostly for safeguard is mostly in how you manage your business.

Speaker Change: It works.

Speaker Change: We had a.

Speaker Change: We have the opportunity to see it.

Avishai Abrahami: Our millions and millions of businesses are being run, what works and what's not. And we can recommend to our customers how to do things better, how to make the business more successful, or what they should be saying, but they don't say. And we are adding assistants that help you figure out how to take your business to the next level. I think that this is really unique.

Speaker Change: Millions and millions of businesses being around what works and what's not and we can recommend our customers how to do things better.

Speaker Change: To make their business more successful or why they should be saying at the time, saying and we are adding assist.

Speaker Change: Assistance that help you figure out how to take your business to the next level.

Speaker Change: This is really unique I don't believe anybody else is working on something similar to that and I find it to be.

Avishai Abrahami: I don't believe anybody else is working on something similar to that, and I found it. An amazing opportunity for small businesses to learn how to do things better. And a lot of it can also be automated so that I can tell you, well, I think we should have more posts on your website about things related to, if you're a yoga studio, about what is the right way to eat, or what kind of food you should consume, or what is better if you're... And I think that... can also be done by AI. So the AI will not just recommend a lot of things; it can So that is another exciting project that we're working on. And, of course, in Wix Studio, there's a long roadmap of really exciting things that you're going to see. Very helpful.

Speaker Change: And amazing opportunities small businesses to learn.

Speaker Change: How to do things better.

Speaker Change: A lot of it can also be automated so that I can tell you well I think we should have more post on your website, but things that regarding to ensure the yoga studio about what is the right way to eat well what kind of food is it conceivable what is better if you will and I mean that.

Speaker Change: Can be also done by the AI. So that will not just recommend a lot of thing it can be doing for you. So that is another exciting project that we're working on.

Speaker Change: And of course and weak studio.

Speaker Change: Long roadmap of.

Speaker Change: Really exciting things that.

Speaker Change: Youre going to see coming this year.

Speaker Change: Okay.

Nir Zohar: Just a follow up on that. I think a lot of what you've talked about in the previous answer will address this, but, you know, on the obviously a lot of great things to focus on here in this quarter, but for self-creators, the growth decelerated a bit sequentially, you know, on an easier year over year comp last quarter, I think New York commented on just seeing that business get back to double digit growth. Do you still think that that's the right framework for that? And, you know, is it just AI and these components that get you there? Or is there something else to think about?

Speaker Change: Very helpful.

Speaker Change: A follow up on that I think a lot of what you've talked about in the previous answer to address this but.

Speaker Change: On the obviously a lot of great things to focus on here.

Speaker Change: In this quarter, but for soft creators the growth decelerated a bit sequentially.

Speaker Change: Easier year over year comps last quarter or if it goes near commented on we're seeing that business get back to double digit growth do you still think that that's the right framework for that and.

Speaker Change: Just AI and these components that get you there or is there something else to think about thanks.

Nir Zohar: Thanks. What? Yeah, well, the deceleration of, I think that it's also super important to mention that is the result of a few things, not necessarily from the business perspective. But obviously, we were lapping with the price increase that, you know, from spring of 2022. So obviously, you know, we see the results in the second half.

Speaker Change: Hello.

Speaker Change: Yes.

Speaker Change: Generation of.

Speaker Change: It's also important to mention that this is the reason.

Speaker Change: A few things not necessarily from the.

Speaker Change: From the business perspective.

But but obviously we were lapping with the price increase.

From spring of 2022, so obviously an OECD a result in the second half of 2023, although we spoke about it also last quarter, but I think that we know that you mentioned.

Nir Zohar: We spoke about it last quarter, but I think that, you know, it's new. We obviously believe that this price increase and optimization is something that we will be doing on a regular basis as long as we need to, obviously, optimize the price. The second thing about the self-creator...

Speaker Change: We obviously.

Speaker Change: Believe that these price increases and optimization accounting thats.

Speaker Change: We will be doing on a regular basis as long as we need to obviously have to optimize the pricing.

Speaker Change: The second thing about the self creators.

Nir Zohar: I believe that we had a slightly higher percentage a month in the second half of the year. So, obviously, all of the above will not be a headwind in 2024. I believe that, you know, everything that we are doing right now with the product and AI and so on, and we mentioned that, you know, for self-caterers, in the long run, we believe that it will be double-digit growth just because of that, because it has the most effect on the macro environment, which has already started to see that it's improving. But then again, also, you know, the new product in AI is one of the examples Thank you. And please wait one moment for our next question. This question will be coming from Mark Mahaney of Evercore ISI. Your line is open, Mark.

Speaker Change: I believe that we can.

Speaker Change: Slightly higher percent of monthly plans in the second half of the year.

Speaker Change: So obviously all of the above will not be a headwind in 2024, I believe that everything that we're doing right now with the product and AI and so on and we mentioned that.

Speaker Change: In order to fulfill scheduled in the long run we believe that it will be a double digit growth just because of that because it has been the most effect of the macro environment, which already started to see that it's improving.

Speaker Change: But then again also you know the new product and AI is one of the examples of how we can bring.

Speaker Change: Increased conversion and also increase the growth of self critical.

Speaker Change: Thank you.

Speaker Change: And one moment our next question.

Speaker Change: This call will be coming from Mark Mahaney of Evercore ISI. Your line is open mark.

Mark Mahaney: Thank you. I just want to ask about sales and marketing leverage. It's not too often you see a company grow revenue by 25% over two years and yet cut sales and marketing expenses by 25%. You know, roughly those numbers are right.

Mark Mahaney: Thank you I just wanted to ask about the sales and marketing leverage its not too often you see company grow revenue by 25% over two years and yet cut sales and marketing expenses by 25% roughly those numbers are right. So just talk about the sustainability of that is it due to the increasing contribution from partners revenues due to the fact that you've reached enough brand awareness.

Nir Zohar: So just talk about the sustainability of that. Is it due to the increasing contribution from partners' revenue? Is it due to the fact that you've reached enough brand awareness and scale where sales and marketing can become more of a fixed cost, you know, going forward? I know you gave guidance for this upcoming year about where sales and marketing are, but just talk through again the pretty significant leverage you have and the potential for keeping that just as a fixed expense going forward. Thank you. Hey Mark, it's Nir.

Mark Mahaney: And scale, where sales and marketing can become more of a fixed cost going forward I know you gave guidance for.

Mark Mahaney: This upcoming year about where sales and marketing is but just talk to you again.

Mark Mahaney: Pretty significant leverage you have and the potential for keeping that just has a fixed expense going forwards. Thank you.

Hey markets. So I think you've touched I think you touched on both drivers.

Nir Zohar: So I think you touched on both drivers, and I would say that, definitely, partners play a part in it. But I think that more than anything, it is about the scaled brand. And you have to remember that, you know, we've seen a surge in our brand recognition in the years kind of leading up to 2023, mostly throughout the COVID era, which, you know, combined with a very high increase in our marketing spend, because there was a high, extremely high demand, but also because so many people are now actually forced to go online in businesses And they got to be generated and crazy exposure to others throughout that period of time.

Speaker Change: And I would say that yes that fancy partners play a part in it but I think thats more than more than anything it is about the scale the brand.

Speaker Change: And you have to remember that.

Speaker Change: We've seen a surge in our brand recognition.

Speaker Change: In the year is kind of leading up towards towards 2023, mostly throughout the Covid era, which combined.

Speaker Change: Very.

Speaker Change: And they got.

Speaker Change: We regenerated crazy exposure through our doors throughout that period of time.

Speaker Change: That led us kind of a late 2022 to the point, where we started testing whether we can go.

Speaker Change: And decrease the investment in marketing and what would that do to our to our sales and revenues.

Speaker Change: On an ongoing basis, what we have seen which we thought was very remarkable that not only does it.

That it really helps us quickly stabilize in.

Speaker Change: Continue growing even at a lower base of marketing.

Speaker Change: Simply because a lot of our.

Speaker Change: A lot of the traffic, we kind of lost by not buying it was replaced by organic traffic, which came through the strength of the brand.

Speaker Change: And even that traffic again, you see that the core basis are smaller than <unk>, but it was a much higher intent traffic. So it generated actually better financial results. So from our standpoint, yes, we do believe that on the <unk> side.

Speaker Change: The the marketing investment can pretty much be a fixed cost obviously with some fluctuation over time based on opportunities.

Speaker Change: Whereas when we look on the partner side of the business.

Speaker Change: I think 2024, especially with the fantastic results, we're seeing in on on the studios side in terms of the product is where we're going to see more investment into marketing.

Speaker Change: Thank you Nir.

Speaker Change: And one moment for our next question.

Speaker Change: Okay.

Chris Zhang: Our next question will come from Chris Zhang of UBS. Chris Yerlina. Hi, thanks for taking our question. So, as you discussed a little bit in the release in the shareholder update about the price increase that's currently underway, I just wonder if you could share a little more detail about the extent of the price increase on certain products, for example, and the level compared to 2022 you're thinking about, and also the timing and how that factors into your guide this year. Thank you. Hey Chris, it's Nir.

Speaker Change: Our next question will come from Chris Zhang.

Chris Zhang: <unk> of UBS, Chris Your line is open.

Chris Zhang: Hi, Thanks for taking our question.

Chris Zhang: Discuss a little bit and releasing that shareholder update about the price increase that is currently underway and just wonder if you could share a little more detail about.

Chris Zhang: The extent of the pricing increase which products for example.

UBS: And the level compared to 2022, you are thinking about and also the timing and how that factor.

Speaker Change: Chris into your guide this year. Thank you.

NIA: Hey, Chris It's near I think I'll kick this off and then hand, it over to <unk> to talk about.

Near: The modeling and the guidance part of it but generally.

Speaker Change #101: There is a variation obviously between different geographies and different kind of subscription in terms of what does the increasing percentage I would say roughly 5% to 15% really depends on those different parameters.

Speaker Change #101: And the cadence again because.

Speaker Change #101: For new new prices.

Speaker Change #101: Uh huh.

Speaker Change #101: In the U S and in Europe are already in place and they are going to be expanded globally.

Speaker Change #101: And then in terms of the cadence for the subscriptions obviously they are the only the only increases when they renew so that's something that's going to be in effect.

Speaker Change #101: Throughout this year and actually well.

Speaker Change #101: Overflow also into 2025, the Oregon share more about it.

Lior Shemesh: So, with regard to the price increase, we are obviously, Please see the complete disclaimer at https://sites.google.com or at https://sites.google.com/. It's very important to mention that it's not covering all of our customers, not all of our geos. And this is something that we'll probably test, and if implemented, will be an upside to the guidelines. That's super helpful.

Speaker Change #101: First on the guidance.

Speaker Change #101: No.

Speaker Change #101: With regard to the price increase we obviously took it into consideration when we provided the guidance for those places that we actually tested.

Speaker Change #101: <unk> implemented the price increase.

Speaker Change #101: Very important to mention that it's not cover all of our customers not all of our Geos and this is something that.

Speaker Change #101: We will probably test and if implemented.

Speaker Change #101: Will be an upside to the guidance.

Speaker Change #101: Okay.

Speaker Change #102: Understood that's super helpful.

Chris Zhang: And if I may, I think, just a quick follow-up, just for your revenue by region, Asia is a smaller part, and usually it fluctuates a little bit. And if our calculation is correct, Asia and other regions actually show a slight Q on Q decline. Can you maybe talk about the drivers behind that? Thank you.

Speaker Change #103: And if I may I think.

Speaker Change #104: Quick follow up.

Speaker Change #104: Just for your revenue by region.

Asia is a smaller part and usually fluctuates a little bit and if.

Speaker Change #104: Our calculation is correct.

Speaker Change #104: The Asia and other regions actually saw a slight Q on Q decline can you maybe talk about the drivers behind that thank you.

Speaker Change #104: Yes.

Lior Shemesh: Are you talking about North America revenue? Oh, so it's Asia and the others. Wow, H&R.

Speaker Change #105: Are you talking about.

Speaker Change #106: North America revenue.

Speaker Change #107: Alright, Asia and others.

Speaker Change #108: Sure it either.

Lior Shemesh: Well, I believe that, you know, Asia and other countries are like... as an impact of, you know, kind of a small amount of specific customers, you know, in channels. So, you know, it's kind of fluctuated. I think that, you know, obviously, when you look at, for example, Europe and North America, they have been impacted by a specific product that we launched only in the second half of last year. So we do see the effect of it right now. I'm talking specifically about Google Ads. I think that it's a great way to... see that, you know, since we launched a new product, it had a huge impact on www.larryweaver.com. But specifically with regard to Esha and others, it is kind of fluctuating and really depends on a specific customer.

Speaker Change #108: I believe that Asia and other is like.

Speaker Change #108: As an impact of <unk>.

Speaker Change #108: You know kind of.

Speaker Change #108: Small amount of a specific customer.

Speaker Change #108: And channel.

Speaker Change #108: So it's kind of fluctuated I think that you know obviously when you look at for example at Europe, and North America. It Hasnt been impacted by a specific product that we've launched only in the second half of <unk>.

Speaker Change #108: Last year.

Speaker Change #108: So we do see the effects will be right now I'm talking about specifically about Google ads I think that it's a great.

Speaker Change #108: Wait to ship to see that.

Speaker Change #108: Since we launched a new product.

Speaker Change #108: It was a huge impact on a significant impact on our numbers, which showed the ability to introduce new products.

Speaker Change #108: But specifically with regard to Asia and other it is kind of a fluctuating really depends on the specific.

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