Wix(WIX) - 2023 Q4 - Annual Report

Revenue Growth and Performance - Total revenue in Q4 2023 was $403.8 million, up 14% y/y, driven by Partners revenue growth of 38% y/y to $130.1 million[7] - Full year 2023 revenue reached $1.56 billion, up 13% y/y, with Partners revenue growing 35% y/y to $468.5 million[8] - Wix expects 2024 bookings growth of 12-14% y/y, accelerating to 15% y/y in 2H24, with full year revenue growth of 11-13% y/y[3][13] - Creative Subscriptions revenue for Q4 2023 reached $296.154 million, a year-over-year increase from $265.268 million in Q4 2022[30] - Business Solutions revenue for Q4 2023 was $107.617 million, up from $89.772 million in Q4 2022[30] - Total revenue for Q4 2023 was $403.771 million, compared to $355.040 million in Q4 2022[30] - Total revenues for the year ended December 31, 2023, increased to $1,561,665 thousand, up from $1,387,666 thousand in 2022, representing a growth of 12.5%[38] - Creative Subscriptions revenues for the year ended December 31, 2023, reached $1,152,007 thousand, compared to $1,039,479 thousand in 2022, a growth of 10.8%[38] - Business Solutions revenues for the year ended December 31, 2023, were $409,658 thousand, up from $348,187 thousand in 2022, a growth of 17.6%[38] - Business Solutions Revenues for Q4 2023 increased to $107.6 million, up from $89.8 million in Q4 2022, representing a 19.9% year-over-year growth[41] - Revenues excluding FX impact for Q4 2023 were $402.3 million, with a 13% year-over-year growth[44] Profitability and Margins - Wix anticipates 2024 free cash flow margin of 21-23%, driven by growth and operational efficiency[3][17] - Wix achieved positive GAAP net income in 2023, two years ahead of plan, with a Q4 FCF margin of 22%[3][7] - Gross profit for Q4 2023 increased to $277.658 million from $226.276 million in Q4 2022[30] - Operating income for Q4 2023 was $1.769 million, a significant improvement from an operating loss of $32.603 million in Q4 2022[30] - Net income for Q4 2023 was $2.954 million, compared to a net loss of $38.975 million in Q4 2022[30] - Basic net income per share for Q4 2023 was $0.05, up from a loss of $0.67 per share in Q4 2022[30] - Wix expects 2024 non-GAAP gross margin of 68-69%, with business solutions gross margin exceeding 30%[16] - Non-GAAP Gross Profit for Q4 2023 was $282.0 million, with a Gross Margin of 70%, up from 65% in Q4 2022[48] - Non-GAAP Operating Income for Q4 2023 was $64.7 million, with an Operating Margin of 16%, compared to 9% in Q4 2022[49] - Non-GAAP Net Income for Q4 2023 was $74.0 million, with Basic Non-GAAP Net Income per Share of $1.29[51] - Non-GAAP Gross Profit for Creative Subscriptions in Q4 2023 was $246.1 million, with a Gross Margin of 83%, up from 79% in Q4 2022[48] Cash Flow and Financial Position - Free Cash Flow for the year ended December 31, 2023, improved significantly to $182,197 thousand from a negative $33,512 thousand in 2022[38] - Cash and cash equivalents increased to $609,622 thousand as of December 31, 2023, from $244,686 thousand in 2022, a growth of 149.2%[36] - Net cash provided by operating activities for the year ended December 31, 2023, was $248,246 thousand, compared to $37,152 thousand in 2022, a significant increase[35] - Free Cash Flow for Q4 2023 was $80.4 million, up from $38.6 million in Q4 2022[52] Share Repurchase and Capital Allocation - Wix completed a $300 million share repurchase plan in February 2024 and is pursuing approvals for an additional $225 million repurchase[3] AI and Product Engagement - Wix's AI products, including AI Site Generator, have seen strong user engagement, with most new users interacting with at least one AI tool[4] Partner and User Growth - Wix Studio attracted over 500,000 agencies and freelancers in six months, with nearly half being new Partners[2] Future Expectations and Guidance - Wix expects 2025 revenue acceleration and to significantly surpass the Rule of 40, driven by 2024 bookings growth[6][13] - The company expects to maintain and enhance its brand and reputation, and plans to localize products and expand payment infrastructure[28] - The company anticipates fluctuations in foreign currency exchange rates, interest rates, and potential illiquidity of banking systems to impact its business[28] Bookings and Recurring Revenue - Total bookings for the year ended December 31, 2023, were $1,597,503 thousand, compared to $1,472,119 thousand in 2022, a growth of 8.5%[38] - Creative Subscriptions ARR (Annual Recurring Revenue) as of December 31, 2023, was $1,192,814 thousand, up from $1,080,824 thousand in 2022, a growth of 10.4%[38] - Total Bookings for Q4 2023 reached $395.0 million, with a 5% year-over-year growth when excluding FX impact[44] - Q1 Cohort Bookings for 2023 were $56 million, compared to $60 million in 2022[43] Share-Based Compensation and Dilution - Share-based compensation expenses for Q4 2023 totaled $58.2 million, slightly down from $59.9 million in Q4 2022[46] - Basic weighted-average shares used to compute net income (loss) per share for Q4 2023 were 57,317,815, compared to 58,189,246 in Q4 2022[54] - Diluted weighted-average shares used to compute net income (loss) per share for Q4 2023 were 59,085,757, compared to 58,189,246 in Q4 2022[54] - Effect of dilutive securities for Q4 2023 was 1,767,942, compared to none in Q4 2022[54] - Stock options excluded from diluted weighted-average shares for Q4 2023 were 2,245,872, compared to 4,332,022 in Q4 2022[54] - Restricted share units excluded from diluted weighted-average shares for Q4 2023 were 818,288, compared to 3,123,019 in Q4 2022[54] - Convertible Notes excluded from diluted weighted-average shares for Q4 2023 were 1,426,728, compared to 3,969,514 in Q4 2022[54] - Total diluted weighted-average shares outstanding for Q4 2023 were 63,576,645, compared to 69,613,801 in Q4 2022[54] - Basic weighted-average shares used to compute net income (loss) per share for FY 2023 were 56,829,962, compared to 57,993,364 in FY 2022[54] - Diluted weighted-average shares used to compute net income (loss) per share for FY 2023 were 58,408,331, compared to 57,993,364 in FY 2022[54] - Effect of dilutive securities for FY 2023 was 1,578,369, compared to none in FY 2022[54] Assets and Liabilities - Total assets increased to $1,805,280 thousand as of December 31, 2023, from $1,758,367 thousand in 2022, a growth of 2.7%[32] - Total liabilities decreased to $1,859,765 thousand as of December 31, 2023, from $2,021,609 thousand in 2022, a reduction of 8.0%[33]