Wix.com (WIX) Morgan Stanley Technology, Media & Telecom Conference summary

Strategic focus and product evolution

• Shifted focus to partner business since 2019, with major learnings from Editor X leading to the launch of Wix Studio in late 2023, which is now the most successful product release to date.

• 2024 centered on establishing and expanding Wix Studio, while planning two major new products for self-creators to launch in 2025.

• New products aim to rejuvenate the self-creator segment and expand the top-of-funnel reach, with the first release expected in spring and the second in summer 2025.

• Studio has enabled a clear separation between professional and self-creator experiences, allowing tailored improvements for each audience.

• Studio’s market share in the partner segment remains in the single digits, indicating significant growth potential.

Financial performance and outlook

• Achieved a 28% free cash flow margin in 2024, with revenue growth accelerating to 13%, surpassing the Rule of 40.

• Targeting a Rule of 45 in 2025, with free cash flow margin expected slightly above 30%.

• Long-term free cash flow potential estimated at 35%-40% for partners and around 35% for self-creators.

• Margin expansion driven by stable headcount and operational efficiency, with future growth expected from new product launches.

• Price increases are considered every two years, based on added value and customer adoption of new features.

Subscription and pricing dynamics

• 2024 saw a 1% decline in premium subscriptions, mainly due to churn from price increases, but average bookings per subscription (ABPS) grew 13% due to higher value customers and business solutions.

• Churn was concentrated among legacy, low-paying subscribers after price harmonization, but this is not seen as a key business metric going forward.

• The company plans to introduce new KPIs for better business modeling and investor communication.

• Average annual price increases are around 5%, supported by continuous value addition and higher-tier package adoption.

• Future price increases will be based on demonstrated value and customer usage of new features.