Israeli website building platform company Wix.com Ltd. (Nasdaq: WIX) has reported positive results for the fourth quarter and full-year 2024, with GAAP operating profit for the first time and higher non-GAAP net profit than the analysts’ forecasts. However, the company provided cautious revenue guidance for 2025 due to the negative influence of the exchange rate but Wix expects a 30% rise in free cash flow over the year.
Wix share price has risen by more than 300% since its low-point in 2022 and is currently trading nearer its peak price in 2021, although it is still 35% below its record price. After publishing results this morning, the company’s share price opened 1% lower, giving a market cap of $12.09 billion.
Wix president and COO Nir Zohar said, “In the face of significant difficulties, in a company where two-thirds of its workforce is in war zones – Ukraine and Israel – we are very pleased with our achievements on the business side in 2024. This was a record year in many ways, both in terms of continued growth, and in terms of the acceleration in growth we saw during the year, which also translates into forecasts for 2025.”
The company, managed by CEO Avishai Abrahami, recorded $1.76 billion revenue in 2024, up 12.7% from 2023, including $460 million in the fourth quarter, up 14% from the corresponding quarter of 2023. Wix reported $100 million GAAP operating profit after a net loss of $24.4 million in 2023. GAAP net profit was $138 million – four-times the 2023 amount. Non-GAAP net profit in 2023 totalled $383 million (including $117 million in the fourth quarter), or earnings per share of $6.39.
“Profitability will continue to grow in 2025”
Zohar told journalists that Wix entered “the rule of 40 in 2024 and will enter the Rule of 45 in 2025.” -the principle that a company’s combined growth rate and profit margin should exceed 45%. He added, “Profitability will continue to grow both in percentage terms and absolute numbers in 2025. We predict an acceleration in the rate of revenue growth, despite currency data that is a bit difficult for us. We are in a very healthy place as a company, and we must remember that this is possible because of the improvements in our products. In 2024, there was a significant contribution to the Wix Studio product, which we launched at the end of 2023, for the more professional clients. In 2025, we will release two significant products for our second largest sector, those who build websites for themselves, and we believe that this will help accelerate growth in this part of the business.” Regarding reaching operating profitability on a GAAP basis, Zohar said: “This is good news for Israel, that we will start paying taxes, in addition to our not-so-small contribution at the income tax level.”
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Zohar said, “Most of our large shareholders are sophisticated and hold the stock for the long term, and discussions with them are not about the quarterly level or even the year, but about long-term plans. I think they are very pleased with our change, that we have become a profitable company. Emphasis in conversations with them today is how to maintain the level of profitability, and maintain and accelerate the growth rate. We have two central parts of the business: the partners’ part has been growing on average at a great rate of 30% in recent years. I assume that due to the law of large numbers this will decrease in the future, but it still has a good run ahead; and the other part is small businesses that build websites for themselves and they have been hit in recent years by the slowdown and instability in the global economy, and have not yet experienced a full recovery. We have plans to accelerate the growth rate there again.”
Published by Globes, Israel business news – en.globes.co.il – on February 19, 2025.
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