Cloud-based web development platform specialist Wix.com (WIX 2.08%) reported mixed fourth-quarter 2024 earnings on Wednesday, Feb. 19. Adjusted EPS of $1.93 easily beat the consensus analyst estimate of $1.59, but Q4 revenue of $460.5 million fell just shy of the $461 million forecast.
Overall, the quarterly performance was strong, with the company showcasing a robust 14% year-over-year jump in revenue.
| Metric | Q4 2024 | Analysts' Estimate | Q4 2023 | Change (YOY) |
|---|---|---|---|---|
| Adjusted EPS | $1.93 | $1.59 | $1.22 | 58% |
| Revenue | $460.5 million | $461 million | $403.8 million | 14% |
| Free cash flow | $131.8 million | N/A | $80.4 million | 64% |
| Adj. gross margin | 70% | N/A | 69% | 1 pps |
Source: Wix.com. Note: Analyst consensus estimates for the quarter provided by FactSet. YOY = Year over year.
Overview of Wix.com
Wix.com is a prominent cloud-based web development platform that empowers individuals and businesses to create stunning websites. The company provides a range of services from basic site building to complex application design through tools like Wix Editor and Wix ADI (Artificial Design Intelligence). Recently, its focus has been on leveraging AI for product enhancements, expanding its international market footprint, and scaling its partner and ecosystem networks. Success for Wix hinges on user base expansion, product diversification, and continuous technological innovation.
Wix has strategically diversified its offerings, integrating AI-driven solutions like AI-powered Website Builder to improve user engagement and conversion rates. Its growth is also underpinned by international market expansion, ensuring a diversified revenue stream beyond the U.S., and robust development of its partner ecosystem, which showed a strong 30% year-over-year growth in 2024.
Quarterly Highlights
This quarter, Wix.com showed resilience amid slight revenue forecast misses. Free cash flow stood out this quarter at $131.8 million, a sharp increase from Q4 2023's $80.4 million. The jump highlights the company's efficient operational capabilities. Gross margin improved by 1 percentage point to 70% from 69% a year ago, reflecting ongoing efforts to improve cost management.
NASDAQ: WIX
Key Data Points
Notable developments include advancements in international market penetration, with 40% of revenue now being generated from non-U.S. currencies. Through strategic initiatives, such as its AI solutions and the Partner segment, which grew 30% for the full year 2024, Wix continues to enhance its business model.
Wix experienced considerable growth in registered users, totaling over 282 million by year-end, with premium subscriptions reaching 6.2 million. This aligns with its strategy to convert free users to paying subscribers, bolstering revenue. Additionally, Q4 sales from its Business Solutions segment advanced 21% year over year, contributing to an 18% increase in total bookings of $464.6 million.
Wix completed a $200 million share repurchase plan in January that brought the total buybacks since August 2023 to $725 million. More buybacks are expected in 2025.
Looking Ahead
Wix management said it sees first-quarter 2025 revenue coming in at $469 million to $473 million. For the full year 2025, it projects revenue to total between $1.97 billion to $2.0 billion, representing a 12% to 14% increase. Bookings are anticipated at $2.025 billion to $2.06 billion, marking continued strength with an 11% to 13% growth outlook. Management is optimistic about margin expansion fueled by the continued adoption of AI tools and Studio's growth trajectory.
Investors should pay attention to the impact of foreign exchange rates, which may continue affecting revenue. Additionally, AI products and enhancements could drive significant transformation and monetization, supporting growth into the next fiscal year. As Wix continues to develop its ecosystem and geographical presence, these strategic focuses promise further expansion opportunities.
