Hi, everyone. Thank you for joining us today. Welcome to the Wix 2022 Analyst and Investor Day. I'm Joe Pollaro, General Manager of U.S. Operations and Head of Investor Relations. Quickly, I'll read our legal disclaimer. During this Analyst and Investor Day, we may make forward-looking statements, and these statements are based on current expectations and assumptions. Please consider the risk factors included in our 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, and you can find all reconciliations between our GAAP and non-GAAP results in the appendix of the presentation materials that we will post later today on the investor relations section of our website, investors.wix.com. As for our agenda today, several of our leaders will present, and we will follow these presentations with a Q&A session with our covering analysts. Then later today, we'll post all of these presentation materials on our IR site for you to access. One more thing before we begin, I wanna share a bit more about how we put together the presentation materials today. We've been speaking with investors over the last few months to get feedback on our story and hear your biggest questions regarding our evolving business. In addition, as we stated in our Q1 earnings release, we recently adopted a three-year financial plan that was approved by our board. We concluded as part of sharing it with you, we need to take a step back and walk through the components of our business that underpin this plan. This is what you'll see today. This also aligns with the feedback and questions we've received from the investment community. You won't see as much about product announcements and demos today, but much more on the evolution of our business, the investments we've made over the last several years, and how all of this fits together into our three-year financial plan. With that, let's start with our CEO and co-founder, Avishai Abrahami. Thank you, Joe. Thank you, everybody, for joining us today. We really appreciate your time. Today, we're gonna share with you what we did in the last couple of years, where we are today, and what we plan to do in the future. We're gonna share with you a lot of information, but if there are four things that I want you to take with you today, the first one is the website-building market, our market, right, is already a big market, and it is quickly growing. The second is that Wix as a company is growing through product innovation and efficient marketing. The third thing is that Wix is a combination of two kind of businesses today. The first one is a traditional business, self-creators, which is a growing business that is already very profitable, and we're gonna show you that. Our second market is the partners agency business, where we are growing very quickly. The fourth point is that we're gonna share with you our 3-year financial plans, and how we will drive profitable growth and achieve 20% free cash flow margins for 2025. Maybe to start with, let me remind everybody what is Wix vision, right? Wix was founded in 2006 with a mission to allow every business, a community or person to create their dreams online. We do that a lot for many different ways, but primarily for enabling them to build a very successful website, right? If you look at Wix at a glance, 228 million registered users. We have a lot of people joining Wix, over 2 million every month, trying to build a website. We have customer pretty much everywhere we're legally allowed to sell. It wouldn't be Wix without a video showing a recap of what do we do. This video shows, right, how diversified we're Wix offering here, how many different kind of customer we can address, how much product innovation went into the platform. One of the good thing about Wix was that since we opened in 2008, we enjoyed this tremendous growth. Let's start by looking at our market, right? The website market. We allow people to build websites. Well, COVID has changed the growth of the internet. Well, obviously, right? We're all been locked in our homes, and the only way we can communicate with the outside world was through our computer from the internet. This is how we both think, this is how we interacted, how we talked. We at Wix measure the growth of the internet by the amount of active websites. An active website is a website that is connected to a domain, and there is a website on the other side. What we can see is that if you look at Q1 2019, right, the internet is growing at 2.1%. Q1 2020 at 4.5%, in Q1 2021 at 5%, but this year we're at 0.8%. Right? This kind of makes sense because the internet growing so quickly during COVID, it's kind of pulled forward the demand from this year. I believe, and this is my personal belief, is that this will return to the average, okay? Maybe even faster. I think that all those external events that we're seeing now, China, the Fed, the war in Ukraine, all of those things are not, well, are mostly temporary, and I think that will help the Internet continue to grow back and accelerate again in the next couple of years. When you think about how to create a website, right? There are three ways in which websites are being created. The first one, which is the first method on the internet, was homegrown solution. People coded their website, they wrote code for that, or they used something that created HTML and they put it on a server. This is pretty much all about, you know, a developer managing the website, right? That was the only thing. There's no layer of software, nothing there. You work directly with the web server. The second one, right? This is something that appeared about 15 years ago, a content management system, or as we call them CMS systems. CMS system is a software layer that enable you to do a lot more because it give you so much more functionality. In this category, you'll find things like WordPress.org, Drupal, Joomla, and Magento. Since it give you better functionality, easier to do, it's grown much faster, and we're going to share that. Phase three, where we are today, and I think, it's SaaS, software as a service, website builders, right? In this category, you'll find things like Wix, Shopify, WordPress.com, and Squarespace. What it does, it means essentially it give you a content management system pre-installed, where you don't have to know how to manage it, you don't have to know anything about it, you don't need a developer. You can pretty much do anything you want. The editing environment is already integrated into that. You don't have to worry about security. It's all coming prepared for you. If we look at the growth of the Internet, today it's about 200 million active websites and growing at a rate of 1.3% year-over-year. However, right, if you look at the CMS portion of that, it is growing much faster than the internet. Actually grown 10 times since 2011. It's 26.7% year-over-year, and the market share has gone from 3% to 27%. An interesting thing to say here is that, if you notice, those are not necessarily add-ons on the total internet. A lot of the time, they replace existing websites, right? There's the old website with some legacy solution, and then somebody come and build a new version of that website with a CMS. The next part is the growth of the SaaS CMS, and they are rapidly taking a bigger share of the market of CMS, right? The CMS expanding very quickly to take over the internet while SaaS CMS solutions are expanding very quickly to take over the CMS solution. We can see 20 times growth in the past 10 years, 36% year-over-year growth. I even want to share with you a bit more, right, how Wix is doing inside of all of this. Wix has grown, well, since Q1 2020 to Q4 2021, from 16% to 26% of the new websites created. Let me explain, right? If you look at it, every time a new website is created, 1 in 4 of those new websites will be created with Wix. Right? We think that's pretty cool. Well, this raises the question, right? Why are SaaS CMS winning over legacy CMSs? There's a lot of factors for that. For the first one is that the newer generations, right? Are more comfortable with technology. They want to do things themselves. They don't necessarily want somebody to do it for them. They want to control their website, update the content, change it, change the design. Every time, you know, this generation is growing bigger in the workforce, it also increase the portion of the SaaS CMS. The next reason is that if you are running a regular CMS where you use regular hosting, you need to do all the patches yourself, you need to do all the security yourself, and this takes a lot of effort. You need to manage hosting, you need to manage caching, you need to manage how it looks in different countries. All these things are taken care of for you within the SaaS CMS. You don't have to worry about it. You get updates for free. You wake up in the morning and your website is better. The last thing is that it's really easy to edit. In order to edit your content, you just go, use an editor, and you just edit your content. That makes it a huge advantage. Those are the reason that why SaaS CMS are winning over, right, legacy CMS, winning over legacy systems. Since those reasons are a huge part ingrained within the base of the technologies, those reasons are here to stay. They're not going to change. We spoke about the market and we spoke about SaaS CMS, but I want to show you a bit of what we have, how Wix is built. We have this platform, right, we enable people to build websites. This platform is built from the following component. The first one is the hosting component. This is where all the websites are running, right? There's a bunch of servers that are taking care of how fast your website is loading, how safe it is, how secure it is, what happens if there is an AWS crash, how it will go in a different place up, so we won't have downtime. This is what we do in the infrastructure there. Above that, we have three different editors. The first one is what we call Wix ADI, which is a very simple editor. It uses AI in order to create layouts for you and pretty much design it. You just go for this wizard, and you end up having a website. The next one is a classic editor, which is a bit like PowerPoint, right, where you drag and drop things and you draw a website. You add the application that you need, you click Publish, and boom, you have a website working with any kind of functionality that you need. The next one is Editor X. Editor X is a tool for professionals. It's built that the professional designers can use it and express themselves to the maximum that they desire. The good thing about Wix is that because we have one infrastructure, all those free editors, right, have been built on top of that, and that enable us to really easily build additional editors without so much effort. The last thing I wanna mention, of course, is Velo. Velo enable us to build this development environment which is shared across all of our platform. It is in the infrastructure, it is built with the application, with the verticals, and it is available on all the editors. This is something unique and very exciting. For those of you who've been with us for a while, you already know that slide. I wanna share with you now what we focused on in the last couple of years. First thing we did is that we started to build our offering for partners, agencies, people that build websites for other people. To do that, we needed not to rebuild an editor. We didn't need to build an infrastructure. We only needed to give them really good management tools, right? Things where they allow them to manage multiple accounts, so they have many websites. They need easy way to manage those. They have many people working in their company. They need a way to manage their team and the permissions and rights that each one in their team have toward customers' website. They need a way to charge their customers, so we built that. Those are the things we built specifically for agencies. The next part is that we made a lot of effort to turn Wix into a professional platform. The first thing was performance. We wanted to make our performance to be the best-in-class. This is. This slide shows you how Google look at your website. What is the grade they give the website platform? As you can see here very clearly, Wix today is the fastest. We're very proud of it. It It took a lot of effort, but we think this is a massive benefit for our customers. Before we go into this slide, I wanna explain a little bit what is SEO and why it is so important. SEO means search engine optimization. How well can search engines see your website and understand it? It is very important because this directly affect your ranking on Google, on the organic search results, right? For website, this is a free way. You don't pay for that, right? If you are ranking high, you're gonna get a lot of customers, you're gonna get a lot of visitors to your website without paying anything. A few years ago, we had a system where we automatically tried to optimize for what we thought is good for your website. Today, we opened Wix in a way that if you understand what you do, you can go under the hood and do so much more, right? What you're seeing here in front of you on the screen are quotes from famous experts in SEO. This might not seem that important for you, but I gotta say, as an investor, right, but I can tell you that as a CEO of an Internet company, enabling our customer to have such good SEO capabilities is extremely exciting. One of the other thing we invested a lot in the last couple of years is eCommerce. Right? I wanna remind you that eCommerce is shopping cart, scheduling events, booking hotels, restaurants. Our investment in that has created this tremendous growth. As you can see here, 59% year-over-year. Currently, it's contributing 36% to total Wix revenues. We're very excited about it. We think there's a lot more we can do here. We think there's a lot of room to grow. Those are just a few of the things we did, right, everything until now. We did a lot more. Even these slides is just a summary of the things we did, right? Wix has always invested a lot in product innovation, and this has enabled us to grow. I wanna show you a bit more about why and how. If you look at the total available market for Wix, right? In 2017, it was $26 billion. Why? Because we could build website with very limited commerce or no commerce at all. As you've seen from what we presented before, right, we've added commerce, we've added ability to go for agencies, and that's expanded our TAM. In addition to that, our natural TAM has grown, just because the market has grown by $36 billion. Today, our total TAM is $211 billion. By the way, I really believe that with continued innovation, we're gonna find more things we can do and more new ways and places to grow into. This is not just theory, right? You can actually see the result of that. We're gonna take you to the details, but I wanna show you that, yes, it's true, our self-creators business has grown 26% on average year-over-year, right? That is a lot because the expansion in e-commerce, expansion in SEO capabilities, expansion in performance, all these things that enable us to go after new things. However, our agency business, which almost didn't exist in 2017, right, has grown to $270 million in the last year. This is all happening because of that innovation. From here, I'm gonna hand you over to some of our leaders at Wix. Nir Zohar will show you a deeper dive into our business model, our self-creator business, and how cohorts in Wix behave. Michal Bignitz will take you to our partners business, our agencies, and show you what they do with it, how they use Wix, and how it reflects in results. Yaniv Vakrat will take you into our B2B partnerships and what are we doing there, how it works. Lior Shemesh, our CFO, will share with you our three-year financial plan. Before that, I wanna say again, thank you for joining us today. We really appreciate it. Hi, everyone. My name is Nir Zohar. I'm the President and COO of the company, and I will take us into a deep dive into our business model. In terms of what I'm gonna share with you today, I think the four key things that I want you to take away is, first, a good look at our and understanding of our user cohorts and how they are driving our growth over many, many years. Secondly is the efficient way that we deploy our marketing investments in order to increase that growth even further. We're gonna do something that we haven't done in the past, which is actually break apart the two different sides of our business, show you the cohorts of the self-creators, and why that side of our business is a very healthy and sustainable one. Switch over to showing the cohorts of our partners business and how that is generating compounding bookings and revenue growth into our future. Let's actually, for anyone here who hasn't heard this before, let's go back to the basics for a second in terms of understanding Wix's business model. I'll start with the basic notions, which is, first of all, the registered user. People come to us from all over the internet, and they give us their email and their password. They create an account, and they become a registered user. A cohort will be a group of those users, of those registered users in a certain period of time. It could be a monthly cohort, it can be a quarterly cohort, even a yearly cohort. It allows us to look at the statistical behavior of the full group into which we invested our marketing dollars. A premium subscription will be the step in which a registered user will start paying us for more functionality to connect their own domain to the website, get more commerce functionality, and many more pieces of our offering. The cohort value, which is kind of the aggregated value generated by all that group of users in a certain point of time. It will be measured by bookings or revenues, and it will be driven by that conversion of the registered users to the subscriptions, their retention over time, and also the average revenue per subscription as they're taking more and more higher-priced subscriptions. This is a slide of the cohorts value, and this is actually a slide. It's not a new slide. This is a slide that we present to you on every earnings. We update it on every earnings. It's the quarterly Q1, quarterly, cohort value in bookings over many, many years. You can see how it is compounding and growing over time. Today, we wanted to do something a little bit different. We wanted to continue talking about cohorts, but in a different view. This is, again, these are the Wix cohorts. Here it's an annualized view of the cohorts, but we are showing the bookings retention over time. How much bookings we got from each cohort of each year when it was just created, and how has that repeated itself in the years to come. For example, if I will take the 2016 cohort, which is the kind of the light yellow in the middle, you can see that it is starting back in 2016 at a rate of about $90 million. Then it increases over time to roughly $120 million, but then stabilizes over many years. Even today, when you look five years later in 2021, it still contributed about $120 million to the revenues we generated back in 2021. I think one more point which is worth understanding is the underlying behavior that causes this graph to look like it does. That stability of retention of those cohorts over so many years. The reason for that is the combination of the freemium business model. Some of those registered users have not converted yet back in 2016. They will continue to convert over many, many years. It's also coupled with the fact that this is obviously a subscription model, so as long as they stay and continue and renew their subscriptions, we will get more revenues for them and more bookings year after year. Another basic, I think, concept of our model is the way we deploy our marketing dollars. Now, about 50% of our users are still coming to us through unpaid sources, whether it's word of mouth or recommendations, searches on Google, maybe sometimes people will just hit the free banner on the registered user website and go back and get back to our website. The other 50% are coming through our methodology of running our marketing investment, which we call the TROI methodology, the time to return on marketing investment. Now, again, this is a slide that we show every quarter, and it kind of shows the evolution of Q1s over the years, how we did the initial investment and how that investment became profitable over time. Let's try to take a little bit of a deeper dive just to make sure that we understand this. Let's take Q2 of 2021. It's the first post-COVID cohort that we have, which is more stabilized. We've invested $55 million of our marketing dollars into that cohort. Within the same quarter, within Q2 of 2021, we already got back about 50%, $28 million. Now as time progresses, we continue getting more and more dollars out of that cohort because of that retention behavior that we spoke about before. It will continue going up until it peaks and basically returns the whole 100% around somewhere between quarter three to four after the cohort was generated. I think another very interesting view of the TROI is if we look at it over a longer period of time. Here you can see a quarterly TROI from Q1 of 2017 and basically up to date. You see the amount of marketing investment in each cohort, in each quarter in any of those years. What's remarkable is that we're still getting roughly 50% of the investment within the same quarter in which we made the investment. In some more recent quarters, you can start seeing that it might be going a little bit below, but that's also because we started investing more into partners. I'm gonna talk about the separation between the TROI of the partners and the self-creators down this presentation. What I wanna do now is to basically separate something we've never done before, is to try to separate these two business lines that we have. Avishai mentioned before that the self-creators and the partners. In order to do that, let's start with just explaining who are self-creators. Self-creators represent a very diverse user base. It's again with more than 2 million registered users that join us every month. You can get any kind of business type or any kind of business vertical you can even imagine. The slide shows a selection of those, but obviously that's not the full list, and it's very long and pretty much has anything you can imagine. They also come from all over the world and basically in anywhere that we can legally operate. I think it's worth to, for a second, to stop just for a few minutes to understand a little bit of the faces behind all of these numbers. Let's take a look at two of those self-creators. Lori is a tutor and a business person. She's quite incredible, to be quite honest. She comes up with the ideas. I have to implement those ideas. Sometimes too many ideas. We're Lori and Jay Langston. We're the founders of The Program Tutoring, which is a local tutoring service that meets the needs of a lot of children in our area. From math to science to history, English, there's really not a subject that we do not cover. Before I started the program, I taught school for 12 years and I decided to quit and stay home with my youngest one, who was 3 at the time. Shortly after that, someone said, "Can you tutor?" It went from there, and it just started to pick up. This little organically grown business that Lori started was continuing to grow, and we knew at some point we needed a brick-and-mortar store, and that we absolutely needed a website that could grow with us. We became a business at that moment when we launched the website. We were gonna have two kids in college, and we took on this lease. The pressure for Lori to perform. I really had to be dazzling. We prayed a lot about that. We had a couple margaritas. In 2021, we grossed almost $1 million through the business. The area in which we live is a high-achieving area. Because college has become so difficult to get in, it's going to require a lot, and the kids know that. Today, we have roughly 80-100 classes a week, over 40 tutors. Currently, somewhere around 350-400 students a week, and then if you count the final exam reviews, it could be upwards of 1,500-1,800 in one week. We're adding services all the time. We're changing content all the time. When we do that, we need to be able to have a quick operation where we can make a page, create a service. One of our biggest days of the year is when we do final exam reviews, and when we send the blast out for announcing that particular service. Sometimes within 30 seconds, the class would be full, and I was like, "I'll have to add another class." In 30 seconds it would all be full. A mom told me one time, she said, "When I get that information," she said, "I feel like I'm on a game show. I have to stop immediately and go sign up for everything that I need to sign up for. During our busiest time or during our slowest time, if the bookings ability for the students to book went down, we couldn't do anything. We cannot operate without our website. You know, it's reassuring to know that our website is always up and running. It really makes us feel confident. Wix is so responsive to us. I cannot even really say enough. It feels like we have another team member. Yeah. That's what it feels like. These were Lori and Jay, and I think it's worth stopping for a second to think about why did they choose Wix. Why did they come to us? First and foremost, it's the power of our brand, which is definitely the leading one in our category. Secondly is going back to what Avishai explained before about those different editing environment. It's very easy to start something, and then you have a very deep functionality that in which you can achieve more and more and get more things done with your business over time. The other thing that is playing a very strong role in what people care about is how good will I look, because if you look extreme. If your website looks very good and it's stunning, it has stunning design, you look very professional, and the result is very professional, and that coupling is also extremely important. There's the versatility that allows you basically to start from pretty much anything and take it to wherever you believe, whatever your dream or vision is for your business online. Lastly, going back again to what Avishai explained about the power of the SaaS CMS, is the fact that it's super easy to maintain. You don't have to worry about security and installations and upgrades of software and changes in browsers or resolutions or devices. It is all being taken care of by the Wix platform. Now, a few words about the financial aspects of the self-creators, and I'm not gonna go very deep. Obviously, Lior is gonna take us through everything at the end of the day. I think it's worth mentioning just a few points here. One is the revenue. You can see that the self-creators are generating a very consistent and strong revenue stream over the years, and literally became a $1 billion business last year, and keeps on growing and sustaining our long-term growth. Secondly, in accordance to that, we see that the growth of the average revenue per subscriber has also been increasing over the years, and that has a lot to do with the fact that we're innovating all the time. Avishai spoke about all those different pieces of innovation. When someone has a need for the business and we unlock that specific need, that specific blocker, and they can add that and go deeper with facilitating the success of their business, then they're also willing to eventually go to a higher price subscription, which also is driving that increase over time. Lastly, I think it's worth looking at the GPV generated from self-creators. It was over $6 billion in 2021. You know, it just started kind of getting into the payments and GPV back in 2019. 60% of our overall GPV is coming from self-creators. Let's actually do that separation. Let's try and look at the self-creators cohorts separately now from the partners, and then we can also add on how the partners cohorts look like. When you look at the self-creators user cohorts, you can see that very much like the cumulative ones, again, this is an annualized bookings retention of the self-creators. It looks very similar. It starts from a high point. It is very solid. It drives growth over the years. It's very healthy, and it continues to generate more and more and more revenues as the years progress. Let's now actually switch and look at the other side of this equation, which is the partners cohorts. Here I think there's something remarkable. This graph might confuse you for a second because it looks much more like the cumulative cohort value that I showed you at the beginning. It is not. This is still annualized booking retention, but for the partners. You can see obviously it is starting from a lower point because this is a younger business, but it is compounding growth much, much faster from the other side of the business, which is also why we're so excited about it. Now let's actually look at them side by side. On the left side, you see the self-creators cohorts. On the right side, you see the partners cohorts. I think it's worth understanding the different dynamics of why one looks one way and the other looks different. If I start with the self-creators, we're talking about small business owners. We're talking about people who are using Wix sometimes for personal use. They will build one website, maybe two websites, and over time, they may cancel a subscription and buy another subscription because their need has changed, but they will stay on that kind of constant graph over a very long period of time. With the partners, we see something very different, which also is very intuitive because the partners are designers. They are agencies, small or big. When they start, they open the Wix account, and they start building websites, they will compound more and more and more websites over the years. If they're successful, that will continue to grow and will push the Wix retention and their contribution to our growth higher and higher. Yes, it is starting from, obviously, a smaller point, but it is going much faster as in terms of the compounding growth. As we're going to add more and more, we'll get more of that as years go by. Now, obviously, we spoke about the TROI for the overall. It's worth also kind of mentioning the TROI in a separate way for both the self-creators and the partners. For the self-creators, we are maintaining the 7-to-9-month TROI that we've been at for many, many years. But I know that many of you have asked us in the past what are our thoughts on how we are thinking about maybe expanding the TROI or why we are seeing fluctuations. The reason for that is that we have the partners' TROI. That TROI is a little bit longer. It's 10-12 months currently. It makes sense if you're looking at that kind of how the graph looks and how the retention and the return dynamics are so different from the self-creators. By the way, it may change in the future as we understand that mechanics better and better understand what's the right balance point for the TROI for the partners. And another important takeaway, I think is that if you remember that previous slide I showed you where we see the TROI quarter-over-quarter, and there's a little bit of a decline in the first quarter return. That is because of our investment into the partners' TROI, which is a little bit longer. On the cumulative base, when it's an average together, it looks like it's a little bit low, whereas the self-creators are still returning the full amount of money at 7-9 months as before. Before I wrap it up and taking kind of a connecting the dots of those cohorts to one place, I just wanna play a little bit of kind of a mental exercise. What you see here is the bookings contribution in the past decade of all of these existing cohorts. Let's assume for a minute we have these cohorts that are in our system. These are users who generated. We made the marketing investment. We don't need to do it again. We don't do it again. Let's assume for a second that we decide that we're shutting down Wix in terms of signups. No more signups, no more new registered users. Only the existing cohorts are in, and they're gonna generate whatever they generate, but we're not gonna spend more dollars on marketing. We're not gonna generate more growth. We will get growth from the existing cohorts, and I think that is one of the amazing things about our model because this is basically the foreseeable expected future bookings over the next 10 years of those existing cohorts, which are already in our system. Almost $16 billion in future bookings and revenues in the next 10 years. This is why we're so excited about our business model and why we think it will give us an amazing leverage of growth going forward. With that, I wanna thank you all again for coming and being here with us today. I'm gonna hand it over to Michal Bignitz, our head of partners and agencies, who's gonna tell you more about what we've been doing there, in the last few years. Thanks, Nir, and hi everyone. I'm Michal Bignitz, the head of Wix Partners here at Wix. Today I'm super excited to be here and tell you how Wix became the place for any agency to build their clients' web presence. I want to start from the bottom line. In the last two years, we've seen a massive growth in the number of partners joining Wix. More than 200% increase, taking us to a total of more than 500,000 partners to date. Another impressive number to look at is the number of sites these partners are building, a growth of more than 100%. As Nir showed us, this all sum up to an exponential growth we see with partners' cohort bookings, leading to $270 million revenue in 2021, driven both from existing partners that continue to grow with us and new and much stronger partners generating higher bookings. This is exactly my focus, bringing more agencies to Wix and making them build more sites with us. Today, I want to show you the reasons behind the graphs. What have we done to make more and more partners join us, and how we plan to continue this massive growth. Let's start by talking about the partners we used to have in the past and how they've advanced with our platform. Meet Flor IT Sàrl. They've been with us for six years. They're an agency of 10 employees, and since they joined Wix, they've built more than 1,500 sites with 350 just in the last year. When they started, they offer basic sites with limited number of pages and limited functionality. Like this one, Boomhut Boris, a small business building and selling wooden playhouses. The beautiful site tell the story of the company, showcase some of their work, and invites visitors to contact them by a form. The actual sale take place offline. As the Wix platform evolved, Flor IT added more services to their offering, and today they are also building complex business websites like Coco Collection, a luxury fashion label selling globally using Wix Stores' advanced capabilities. In this graph, you can see the number of sites Flor IT Sàrl built over the years and the split between business sites with online transactions in orange, and others. Along the years, Flor IT Sàrl not only grew in the number of sites they were building, scaling their business massively, they were also able to grow in their offering, charging more for each project and growing their business by more than 300%. The high volume, low complexity partners like this one were the first ones to adopt the platform, and we scaled together. Today we are able to bring more partners like this. They are growing much faster than in the past, and obviously the long-timers partners continue to grow with us. If in the past these were the only partners I could show you, today I'm privileged to say that in addition to them, we have new types of partners joining us, partners that provide more services to their clients and offer more types of website with Wix platform. All thanks to the massive product advancement we did in the last couple of years. I want to show you some of them. The biggest investment and also our biggest product achievement were around providing our users and partners a secure production-ready environment, fully maintained and monitored, ready to scale with uptime of 99.98%. At the end of the day, professionals are looking to build professional websites that will run and behave flawlessly. They maintain hundreds of sites in production, and they want to know that there would be zero downtimes, that their site stand in the highest global security standard, that the performance of every website would get the highest score, and that everyone who's looking would find their client's site in Google. To get to this place, we've done a massive amount of work. We have infrastructure of data center across 3 continents. We deployed more than 200 CDNs globally. We have a 24/7 war room to monitor and handle attack. We have 2 layers of DDoS protection per site. We have built-in SEO tools and many more. All of these are not easy to get to. For an agency to get to this level of infrastructure, it would require the knowledge, the resources, time, and money. With Wix, they get them out of the box, allowing the agency to focus on growing their real business. This is our unique offering and the advantage over all other solutions. I can tell you that from talking with hundreds of partners that moved to Wix from other platforms, this is also the number one reason they did it. Instead of telling you about it, I will let you hear it directly from them. The biggest nightmare of any web designer is getting a phone call from a client and saying, "My website's down," and the only answer that I could provide is that our hosting is down. There's nothing we can do. With Wix, we never even have to think about that, and it's not something that our clients have to be concerned about, being that all of the security is included with their premium subscription. My name is Dante Montalbano. I own Seven Circle Media. We're a full-service web design and marketing agency. I would say that the strongest part of our agency is an ongoing service that we provide for quick-service restaurants and e-commerce companies. In March 2020, we joined the Wix Partner Program, and our company absolutely exploded. We grew the company by 200% in terms of different clients that we took on, as well as revenue. Today we're working with probably almost 400 different businesses. We have a handful of different ongoing businesses that we work with, and we're still able to continue to grow the company and take on even more clients. I started working in marketing and web design basically out of college and knew WordPress was popular, and that's what a lot of web designers were using at the time. We were working with Yoast plugins. We always experienced security issues, missing secure sockets layer or SSL certificates. It was almost like anxiety and stress to kinda figure out how we was gonna get this done, and I said, "There's gotta be something better that I can use." Once I switched over to Wix, my first impression was, wow, I cannot believe that something could be this intuitive. When you click a button, you don't have to click four others to change the period at the end of a sentence. I can publish a website in a matter of a few hours. It was like a breath of fresh air. I was so happy to be able to start projects, be creative, be able to work on them, be able to get the client exactly what they needed. It was just great to be able to move over and have a successful relationship because nobody wants to have a negative conversation with their client. There's not a lot of jobs that you can say, I can be creative, at the same time doing business and helping with numbers and helping revenue growth. We've been able to take a local mechanic and build one of his businesses from literally zero clients to 100 leads per month, strictly using an SEO strategy and no other marketing. Being that we're working with Wix and Wix alone when it comes to SEO, it makes it so much easier to be able to manage SEO and keep our SEO checklist in place and in check. I'm really excited to see the company grow and continue to build their clients' success, take their vision or dream, and make it into a reality for their business. Thank you, Dante. We are really proud to have you as our partner. I want to talk about our SEO investment. We had another huge achievement doing them. We weren't just able to improve the product dramatically by providing SEO advanced capabilities. We now see the biggest name in the SEO industry moving to Wix and offering their services with our platform. In the last year, we already saw a growth of 52% in the number of SEO services provided by our partners, and we expect to see this number grow even further. The next milestone was the release of Editor X, a fully responsive editor with advanced design capabilities tailored for pro designers. The release of the new editor allowed us to add new types of agencies that search for a full-blown design capabilities platform and would never join us if we didn't have it. Monday Media joined Wix in 2021. They told us that before joining, they had to say too often, "No, we can't do that," to their clients. It wasn't their abilities, it was the platform they used. When Paul and Steve, the founder and lead designer at Monday Media, found Editor X, they put the platform to the test. They built their most complicated client site on it, a site for a lawn care business involving a database and hundreds of dynamic pages that would allow users to search by their postcode and see a report of soil condition at their address. With the code-free CMS, they discovered that building the site was not only possible, it also didn't take any more time to build than simpler site on their previous platform. Following this test, Monday Media shifted all of their projects to Wix, and this is the same trend we see overall. Just in the last year, we saw a 130% growth of sites built by partners with multiple premiums. Another big advancement was in the area of our vertical solutions. We added hundreds of integration and advanced capabilities to our verticals. Let's take E-com, for example. Custom Mattress Factory, a client of Digital Edge, are a manufacturer and a seller of mattresses. All of their sales are online directly to their clients, and they sell around $440,000 a month. To get to their client's unique store experience, Digital Edge use Wix Stores and Velo to create custom experience for the product pages, including different questions and variable for each product. They use the Buy Now, Pay Later feature, gift card, back in stock, custom mobile menu, monitoring tools, and more. Without these advanced Stores capabilities, Digital Edge would never choose Wix as their go-to platform. I can tell you that following the success of this E-com site, Digital Edge built with Wix around 300 sites over the last two years. Overall, we can see an increase of more than 200% in the number of E-com sites built by our partners. If we'll take a deeper look, we will see that it's not only driven from existing partners that started building more E-com sites with us, but also we can see that in the last two years, we expanded our reach to E-com agencies. More agencies that build E-com site know about our E-com capabilities and choose Wix as their go-to platform. Last but not least are all the Velo improvements we have done along the years. Recently, we opened many APIs, improved Velo dev environment, and added more capabilities to our CMS, all leading to much more advanced sites that can be developed with Wix. To demonstrate the complexity level you can get with Velo, I wanna share with you one last site for today, a food manufacturing company. The site includes 4,000 products, all needed to be uploaded and managed. For that, 7733 Designs, the agency that built this website, use our content manager. They use dynamic pages and custom forms to provide recipe recommendation, and they developed a product locator so consumer can easily find retailers that sell the products. Today, I chose to bring you some of the biggest advancement we have done in the platform over the years. All of the things I've talked about, production environment, Editor X, advanced business solutions, dev capabilities, CMS, are real needs of any web agency out there. Improving them, adding more capabilities allows us to bring more agencies to choose Wix as their platform. What I showed you today is only the tip of the iceberg. The beautiful thing about partners and our platform is that partners use it to the extent. Every improvement we did and will do in the future to make our platform better and more professional, open more possibilities for our partners, making our existing partners take more project with us, and making new agencies of any type choose Wix as their go-to platform. This is exactly our go-to market approach. As the platform evolves and Wix capabilities are getting better known in the industry, both organically and with our outbound marketing effort, more and more agencies are joining us. Once they join, a dedicated success manager helps our partner on board grow and utilize the platform tools to become more professional with Wix. For the larger scale agencies, we have a dedicated team that targets B2B opportunities. To elaborate more on that, I want to invite our Chief Business Officer, Yaniv Vakrat, that will speak about our B2B efforts. Hi, I'm Yaniv Vakrat, Chief Business Officer at Wix. I joined Wix leadership team about a year ago. Prior to Wix, I spent eight years in leadership roles at Adobe, including sales and marketing. Led all commercial activities for a company called PrimeSense, which was sold to Apple. I was also founder and CEO of a couple of successful startups. Early in my career, I spent four years at McKinsey in Silicon Valley office. I wanna thank Michal Bignitz for describing our partners agencies business. As she explained, I'm going to focus on larger partners and specifically on our strategy of growing through partnering with large SMB-focused service providers worldwide. Over the last couple of years, we started partnering with large service providers. The first one was NTT Townpage in Japan, where we formed a partnership with one of the largest directory listings providers in the country. The easiest way to think about this partnership is to look at NTT Townpage as a mega agency. The partner is both selling Wix to its SMB customers and building the website for them. Since then, we established similar partnerships, several other players in the space, Yell, which is UK's Yellow Pages and others. Last August, we switched gears and established a significant strategic partnerships with Vistaprint. Vista, for those of you who don't know, is the market leader in print on demand. Vista has partnered with us to offer Wix as the online presence solution to its customers. You're going to hear more details about this specific partnership later on in the presentation. More recently, we announced another significant partnership with LegalZoom. LegalZoom delivers formation services, registered agent, tax compliance, and a lot more to small businesses. The commonality between LegalZoom and Vista is the fact that these partners are offering Wix as part of their onboarding funnel. As such, some end users choose to leverage Wix do-it-yourself solution, and some end users are actually asking for help from an agency to build it for them. Why do partners find it compelling to work with us? For two reasons. Number one is the brand. Our investment in product and marketing over the years have yielded very good brand recognition. As you may know, there are many website builders that are selling white label solutions to service providers. We don't, and it's not because we're trying to be difficult, it's because our brand carries values with users, and our partners are actually asking us to be associated with that brand. The second reason is our products and technology. Our technology offers varying degrees of ease of use and can really address the full spectrum of segments in the market, starting with ADI, which caters to small businesses with zero knowledge of design, all the way to Editor X, which is targeting expert designers in a do-it-for-me setting. Our large partners are signing up to our roadmap. It's not only what Wix is today, it's also what Wix will be in the future, and that's important for them that we continue to invest in R&D. What's in it for us? There's a few things. The first thing is getting access to a broader set of customers. A small business has a broad range of needs. They need to form a business, they need to register it with the authorities, they need a bank account, accounting software, they need to buy a domain, they need to do a website. They also need to print business cards and do marketing collateral and a whole range of other things. You probably noticed that we respond to a partial list of these needs. We want to meet customers wherever they are. We wanna meet them at the right place at the right time, and that's why we're partnering with these service providers. The second reason for why it's compelling for us is that we're leveraging an existing platform. Over the last few years, the platform opened up and now allows partners to be able to leverage and resell our services to their own customers. As such, engaging in that business means very little incremental R&D investment for Wix. The last point is that this partnership model gives us an attractive economics because we incur limited customer acquisition costs. We talked a little bit about why it's compelling for partners, why it's compelling for us. Let's talk about the how. How are we addressing this opportunity? There's really two things that we focus on. The first one is on technology. We developed many APIs to allow access to our technology by the partners. We developed customized funnels for our partners. And the last thing we do, we developed site migration tools to basically migrate websites from all technologies to Wix. The second thing we focus on is building a dedicated team to address this opportunity, starting from pre-sales, solution architecture, a sales team that covers the globe, and customer success that's dedicated for these specific large partners. One of the things that investors are asking us quite a bit is how these deals are being booked and recorded. It starts when we sign the agreement, we basically book the total multi-year commitment, and we record that upfront. Every quarter, we then update the deferred revenues, and obligations that are longer than 12 months are being recorded as unbilled contractual obligations. When we deliver the service, we, of course, recognize the revenue. Then what's really interesting about these type of partnerships is that oftentimes they over-deliver and exceed the expectations. If that happens, and we exceed the original commit, we record, of course, the bookings and the revenue associated with that delta. We thought it would be helpful for you to hear directly from one of our most strategic partners. To do that, I'd like to invite Nir for a chat with Robert Keane, Founder and CEO of Vista. I have with me, Robert Keane, who's the Founder and CEO of Cimpress, that used to be Vistaprint in the past, and now it's just Vista, right? That's correct, yes. Can you tell me a little bit, you know, you decided to go down the path of a partnership and announced it last year in August. I know from our shareholders' perspective, there were many questions kind of understanding the nature of what we're trying to do together, why this is such a significant step for both companies. Would love to hear a little bit of, like your vision for Vista for the years to come, and maybe also what is that change of Vistaprint becoming Vista and take it from there. Well, first of all, it's great to see you again, Nir. Look, I'll just say the reason we partnered with you, as you know, but for your shareholders', information, is you guys have a best-in-class technology platform for a business' presence in a lot of different ways. Vista, which is the expanded vision for Vistaprint, brings best-in-class design services, and as we've always done, what we call physical marketing products. That certainly is print, but it's, embroidered apparel, signage, many other things. The common thread of our two companies is that our customers want to have beautiful, impactful presence and marketing for their business, regardless of the channel, whether that's physical or digital. Vista serves literally millions and millions of small business customers around the world in many different industries, many different types of business models. Some are physical storefronts, some are on-the-go service providers, and some are 100% online entrepreneurs. Wix's offering we liked and we really admired because it's very broad, it's very deep. You guys have always been, ever since I've known you in the industry, very committed to innovation. That allows the customers who are coming into the Vista, you know, Wix solution to choose whatever they need. They can choose along the spectrum of the upgrade path. They can start with ADI, or they can start at the other end, a much more sophisticated approach or many of the things you have in between, like Editor X. It's that holistic package, and leadership in a platform that you've built that is very complementary to the physical and design services that we offer our customers. Making a decision, I know that you guys have, you know, over the years, invested a lot into creating your suite of technology to serve that need, right? I'm assuming the decision to switch over and kind of plug in an external technology is probably a hard and a big decision for a company. If you're willing to share a little bit of that about, you know, what brought it about, and also, you know, I'm humbled and honored that you chose Wix, but I'm guessing that you guys have done your homework. What made you choose us versus others? You're absolutely right. We did have an internal approach in technology. We bought most of that technology and then developed it, but we acquired it 10, 12 years ago. The simple fact is we need to focus as a business on what we can be best in the world at. We have great team members who've worked on that product, but we were not keeping up with you and even and the other firms and the other companies in the market. It wasn't an easy decision. Internally, it was hotly debated, but we really felt that it was important to start with the customer and say what's best in class, what's the best customer experience, period, and be agnostic whether we own it or partner for that. That led to, you know, I think frankly, we're very excited about what we've done in the few markets we've already launched. We look forward to what we do in the future. In retrospect, we probably could have done it much sooner. We did, I think have internal reluctance, including myself, to say, should we give up something that's so important to our customers, and give up control of that internally. We certainly did look at a lot of alternatives. There are many good companies in the market. I think you have a number of advantages that really won out. One is the quality of the technology platform, right? You pour a lot into that, and I think you think in a platform way, in a way which we felt differentiated you. That's very important for ourselves as a technology firm who's integrating in. The overlap when we just did market research focusing on the customers of where small businesses, who were not experts in graphic design, would turn to, Wix consistently came out as the number one option for us. That's globally, but certainly in all of our major geographic markets. Yeah, I think that also goes to many of the discussions you and I had when we were working towards this deal, about the alignment on looking for the user value and where is the customer gonna get the best, which I think led us to decide what should be done by Vista, what should be done by Wix, you know, not from an ego perspective, but actually from what's the most value that that can be gained. I think that for me, another exciting thing, and I would love to hear your commentary on it, is that I think that already in the few months that we started launching in various markets, because I think of the nature of the breadth of the offering of Vista on one end and the wide offering on the Wix platform, I think we're already starting to see more and more opportunities that we didn't necessarily, you know, account for when we just started talking about working together. I think this is also very exciting to me because I see more and more avenues of value that we can give to our customers together. Yeah. I fully agree with that. You know, we've invested in a lot of things like VistaCreate, in partnerships like this, in 99designs. The more we go into those design-oriented parts of Vista, the more this particular partnership, I think, will bear fruit. There's a lot of products you just mentioned. If we start with the customer, really understand what they need and what they're frustrated with in the offerings that are on the market today, and build towards that without trying to start first internally, I think we'll both do very well. I gotta say, maybe my biggest concern when we were just, you know, right after we signed our deal and started working together was that we as Wix are taking a very big commitment to suddenly work with a very big partner. I mean, you know, obviously, we've been working with SMBs for many years and we also had many smaller agencies that we've been working with. Suddenly we have Vista, which is essentially behaving like this super agency on a global level that has much higher technical demands and needs different ways to operate. If I had one, I think one big concern was, can we adapt to working with, you know, and with applying our technology to supply your needs? I think, you know, after launching the first markets and gearing up for the bigger ones, one of the key things I'm happy to say that we've managed to overcome that and work very well together. I fully agree with you. I think it was a concern on both sides, because this is not simply, you know, a very simple reselling relationship. It is a deep integration into the customer journey of our customers, our mutual customers. In both of our firms being 100% online in their focus and very technology-oriented in their focus, I have to say, it's gone very well, very much in line with our aspirations and our hopes that you and I spoke about before we signed. That was a concern I understand from your perspective as well. I'm happy to say we've been very happy with the way the teams, the product teams, the technology teams, UX teams are working together on this. Yeah. Same here. I got to say, I think, you know, we're nearing that kind of. We'll always have more to develop and more to integrate and to gain more value. I think most of the heavy lifting is kind of behind us, which to me is, you know, it's exciting 'cause now we can start doing really amazing and new paths for different kind of business owners. I think, you know, we're mixing much more commerce than you guys used to serve before, and suddenly that can be a big part of what's being offered to the customers. Generally, I think we can start figuring out together more and more of how to give more value and make our joint customers more successful. I think, you know, even though real excitement is gonna be in the second half of this year and going forward as we start to actually realize real value out of this. I totally agree with that, and we're gonna be working full bore to make that happen, but we've got off to a very good start. I agree. Robert, thank you so much for answering my questions and sharing some of your excitement and point of view with our own shareholders, and hope to see you very soon face-to-face. That'd be great. All right. Thank you very much. Have a great day. You too. Thank you. Bye. Hi, everyone. My name is Lior Shemesh, and I'm the CFO of Wix. I'm going to talk today about the three-year plan and describe how we get there and where we are today. A few points before we actually start. Self-service creator business is durable and profitable, and having already achieved the rule of forty for several years now. Nir spoke about it before. We think that the growth of the self creator is going to continue at a double-digit growth, and this is something that it's obviously very, very achievable. The way that we plan to do it is by doing actually the same things that we've done in the, in the last few years. For example, developing new products, new features, increasing conversion, increasing the output. We think that this is something that is, that is going to continue. Partners business is still in early stage, but growing significantly with potential for higher margins. Nir spoke about it and described the cohort behavior with a compounding effect. I believe that this is something that will go and generate more profitability in the future, also mostly based on the growth margins. Michal also described to you exactly where we invested, the infrastructure, we improved the services and so on. From now on, we are going to get a lot of leverage. We are planning to generate significant growth margin and operating level in the next coming years, and by 2025, we anticipate to achieve the rule of forty for the full business, with revenue growth of about 20% and 20% free cash flow. We are going to get to $2.5 billion of revenue and $500 million of free cash flow for the full year of 2025. This is the plan that was recently approved by our board. Now let's talk about a few assumptions, when we actually build this model. We assume that current economic headwinds going to continue through 2022. Revenue growth starting in 2023 assume kind of getting back to normal. We assume moderate employee headcount increase annually. We've made, some assumption with regard to the split between self creators and partners, mostly with regard to the indirect cost. We assume that the current effects will remain as it is today. Let's start with self creators. As we mentioned before, self creator has been at rule of 40 for a few years now. When you look at 2021, we're already at $1 billion of revenue and about $193 million of free cash flow. As you can see, the growth was very stable in the last few years, and we think that this is something that is going to continue with a double-digit growth for the next few years. I'm going to talk about it in a few minutes. The growth margin has been stable at 82% for creative subscription. Now, this is something that it's really important to understand because it has not changed and will not change in the next three years. It's actually going to improve modestly in the next few years. With regard to the growth margin of business solution is at 25% and is going to improve. We have about 60% of our operating expenses out of revenue, bring us to about 20% of free cash flow already now and the rule of forty. With regard to 2022, I'm not going to repeat the explanation that Avishai showed before about the economy and so on, but even at 2022, the growth is still 5%-8%. Let's go to the creative subscription. You can see that growth margin is really stable at 82%. Business solution is about 25%-26%, a slight improvement over 2021. I believe that if we exclude the impact of the headwinds, we maintain the rule of forty even for 2022. Let's talk about the 3-year plan and the long term. As we mentioned before, this is a durable business, already generating a very steady growth. I believe that this is something that will continue with double-digit growth for the next three years, but actually also in the long term. We assume 2023 to 2025, 17%-19% annual growth, and for the long term, about 15%. With regard to the growth margin, we're already at 82%. We believe that it's going to improve modestly in the next three years to 82%-84%, where the long term is 83%-85%. We are already there. With regard to the business solution, we will continue to improve the growth margin as payment scaling up and improving and generating more and more leverage. Today we're at around 25%-26%. We believe that it's going to continue to grow to approximately 29%-33% in the next three years. The long term calls for about 35%. With regard to the overall free cash flow margin, we believe that it will be improved in the next three years, mostly because of leverage that we are seeing from hiring less people, as we mentioned before. Also for the long term, we believe the margin are going to increase to about 30%, bring us to 45% in terms of the rule of 40. Now I'm going to talk about partners. We can see that revenue growing and is significantly higher than self creator, but it also makes sense because we started this business a few years ago. It was growing significantly well, and we think that it will continue in a very similar way. We also invested millions of dollars in order to create the platform, in order to build it, and we mentioned it very few times before. Michal spoke about it. Still, because it's an early stage, we don't see the leverage from this business, meaning that the gross margin for creative subscription is at around 52%. That will increase significantly. I'm going to talk about it. The same goes for business solution. At 2021, overall operating expenses are at around 100% out of revenue, simply because we invested a lot in this business. Now let's go and talk about 2022. We see that revenue growth slowing because of macroeconomics and the headwinds that we spoke about before, but still, margins are improving. Now let's talk about the three-year plan and the long-term targets. I will actually start from the long-term targets and then talk about the three-year plan. We believe that the growth for the long term is going to be at around 20%, actually higher than Squarespace, because, you know, we mentioned before about the behavior of the cohort and so on, and we believe that the time for business is actually higher. With regard to the gross margin, the gross margin is 85%+. The plus is because we think that, and Nir talks about the cohort behavior and the compounding effect of this business, and therefore, we believe that the margins are going to be higher for creative subscriptions. In terms of the business solutions, it will be very similar to creative to Sales Creator at around 35%. When we look at the three-year plan, the improvement already started to happen. We are going to see some improvement in terms of the gross margin, 62%-73%. The same goes for business solutions. As payments scaling up, it's going to be around 22%-34%. Most of the leverage is going to come from operating expenses. We are going to see improvement of about 10% on a year-over-year basis. We started with around 100% of operating expenses, go down to approximately 70% in 2025, 10% every year. From there, it's only 2-3 years until we get to that long-term model to less than 50%. On top of the improvements that we are going to see in the next three years, we believe that these businesses will continue growth, scaling up, and most of the leverage for the combined company is actually going to come from this business. Long-term margin are going to be around 30% for free cash flow, and rule of forty, or actually, I can call it rule of fifty, is going to be at around 50%. Now, I want to talk about the combined company and where we expect it to be. By 2025, we are going to get to $2.5 billion of revenue and $500 million of free cash flow. We can see that very clearly from the plan. In the next three years, we are going to see a lot of improvements coming from leverage in the operating expenses, but also improvement in gross margins, both for creative subscription and business solution, from all of the reasons that I spoke about before. Taking us to around 40% in terms of the rule of 40 by 2025. Long term is really interesting. We believe that the growth is going to be at around 17% going forward. The gross margin for creative subscription is going to be 85%+, where business solution gross margin is going to be at around 35%. Operating expenses, as I mentioned before, is going to be less than 50%, and overall free cash flow margin will be at around 30%, bringing us to approximately 47% in terms of the rule of 40. This is very similar to what we showed you a few years ago, but with a much higher baseline, with a much higher top line than we had a few years ago. Now, how we get there? How we get to those margins? How we improve those margins? Again, for Sales Creators, I'm not going to repeat it's already at a very high margins. We are going to see some improvement, but it's not gonna be big. With regard to the business solution, for Sales Creators, we believe that there will be some more improvement over there as payments scaling up. This is the same just for partners. Gross margin improving significantly, mostly from the leverage that we see in terms of our investment in infrastructure, but also for the care organization. Well, for business solution, again, it's going to improve very similar to SaaS creators, going to about 35% for the long term, and by 2025, we're already going to get to 34%, simply because it's mostly coming from payments scaling up, and therefore, we are going to see more and more leverage, and also from the benefit and the contribution of the increased take rate. Most of the leverage in the next few years is going to come from the operating leverage, and we mentioned it before, but it's mostly attributed to partners. Operating expenses are going to go down to approximately 50% for the long term. Now, you can see the differences between Sales Creator to partners. For Sales Creators, we got a lot of leverage in the past few years, and this is why it's a super profitable business. Partners is going to be the same. By 2025, we believe that the improvement is going to be at around 10% on a year-over-year basis, going down to 50% for the long term. To summarize the three-year plan, we saw that Sales Creator business generating significant cash flow and will continue to deliver profitable double-digit growth in the long term. Partners business complements Sales Creators, and while still early, it's gaining scale very quickly. The profitability is in sight. We plan to significantly improve margins, achieving 20% free cash flow and the rule of forty by 2025. Long-term targets model is around 17% in term of annual revenue growth and about 30% free cash flow margin. We are scaling up to $2.5 billion of revenue and $500 million of free cash flow for the full year of 2025. Thank you, everyone. Now we are going to take 10-minute break, and we'll come back for some questions. Maybe increasing the amount of services that go towards the transactional or store-related services? Well, what we say is that in many cases, partners tend to be sites that will have a bigger company behind it. As a result, their share of GPV, which is what we disclose, is actually higher than the rest of the population. If you think about it, a lot of the people that build a personal website for their portfolio, for example, will do it themselves. They tend to be much more common. If you need to have a store for a business of 20 people, right? You usually go to an agency to do it. This is a lot of what we've seen, and I think this trend will continue. All right. Perfect. Just one follow-up question. You know, I wanted to understand the mix between creative solutions and business solutions. You know, today, business solutions are a third of the mix that partners, 25 of the mix that self-service. Looking at those long-term free cash flow targets, you'd expect there to be a max portion of business solutions kinda get to that free cash flow margin without maybe a commensurate lowering of operating expenses. You know, Lior, what do you expect from the trajectory of business solutions long term to reach those profitability targets? With regard to the first part of your question, I assume the long term is about 35% of Business Solutions out of the overall. It might be more than that, you know, it's really hard to predict that, but this is pretty much what we see right now. By the way, it's you know, it's keep on growing, so I think that it's reasonable to assume that. The second part of the question was about. What was the second part of the question? It was more about the timing on profitability for. The timing profitability. -for, business solutions. Actually by 2025, partners will start to generate free cash flow. With regard to the profitability based on US GAAP, it will take some more time. Okay. All right, thanks, Clark. I know we're having a little technical issue, but we're working on getting it fixed. Hopefully, we can move on to the next question. I think we're going to Brent at Jefferies. Brent, you have a question? Yeah. Thanks for hosting today. Many are asking on the 2023 assumptions if you know what you're embedding in expectations for the macro. Clearly, we're seeing some economic conditions deteriorate a little quicker than most of us thought. Can you talk to what you've embedded in those expectations for the global economy? Thank you. We assume for 2023 that it's pretty much back to normal. You know, we don't know if it's obviously going to be in the beginning or in the middle of the year, but this was one of the assumptions that we made because really it's really hard to predict it. If I can add, I think this goes back to Avishai's presentation as well. If we talked about the historical growth of the internet. Yeah. We believe that we've seen previous crises, right, on the Internet. Normally, we saw that a crisis on the Internet usually create more demand for small businesses and innovation. Actually, it does not hurt our growth as much. Well, my belief is that what we're seeing now is a lot about the return to mean, return to average. As COVID was pulling a lot of Internet growth forward, and that is a big part of the slowdown we're seeing today. Again, we don't have the skills to predict the global economy. It's not what we do. We know Internet. We don't know that economy that well or pretend to know economy that well. I do, from conversation with customers and users, it is kind of clear that a big portion of the slowdown on the internet today is directly a result of the growth during COVID. Thank you. Brent, did you have a follow-up or? I'll turn over to my friend, Mark Mahaney. All right. Mark from Evercore. Okay. Thanks, Brent. Joe, it's hard to hear management, so I don't know if there's a solution for that. Let me ask two high-level questions. First, I just want you to step back and talk about the partner business and the lessons you've learned as you've kind of tried to really lean into that over the last, you know, two years. Just, you know, a high level. I don't know that the partner strategy has worked as well as you would have thought, but that's all right. What are the learnings and, like, the best ways you've learned to improve the partner outreach and the partner side of the business? Secondly, this 30% long-term free cash flow margin. Lior, just talk about the bridge to get there. I think we spent time on the last call talking about the bridge to get to the, whatever, 20% free cash flow margin. How do we get from the 20% to the 30%? What are the pieces that go to get there? Thanks a lot. I think, Joe, you should take the first one. They cannot hear us well. Okay. I think, Mark, I'll take the first one. Hopefully, you can hear us when Lior takes the second one. I think, you know, on the partners business, you know, keep in mind that we spent a decade really marketing Wix as a do it yourself, easy to use website builder, and we obviously have had great success there. It takes time to change perception in the market. I think a lot of agencies know us and know our brand very, very well. We're obviously releasing products and doing a lot of marketing toward the new professional side of Wix, which Michal shared in her presentation. This will take time and we knew that. I think that it has actually progressed at a pace we thought, if not actually faster than we thought. We've seen a lot of growth here in the last two years. I wouldn't say that this has taken longer than we had anticipated. I think we're on a great pace. Lior, you wanna take the second one? With regard to the improved margins for partners. Actually, there are two factors in order that we need to achieve in order to be there. By the way, it's already started to happen. The first one is the gross margins. We assume that gross margin will continue to improve. We already achieved that for self-service creators. It's not that, you know, it's something that we predict, something that we know that is going to be definitely also for our partners. Actually, partners in terms of the gross margin is going to be better because of, you know, the behavior of the cohort. Here, you know, in explaining the presentation very well, where you see a compounding effect. Therefore, the profitability in terms of the gross margin for partner is going to be higher. It's already started to happen. For example, if we think that the business, the creative subscription margin is going to be up to 70% already during the three-year plan. I believe that it will take two or three years more in order to get to the 85%. Now, the second thing is about the operating expenses. We can see that right now for partner is approximately 100% of revenue, but it's dropping by 10% every year. By the end of 2025, we will get to about 70% out of revenue, and then it will take just another two years to get to less than 50%. The combination between the leverage that we see in operating expenses and gross margin are going to bring us to approximately 30% of free cash flow. Now, bear in mind that it mostly happen from headcount, and its related expenses like overhead and so on. When you recruit less people, so obviously you see the leverage coming from payroll, but also from expenses and overhead. The other thing is about a lot of leverage that we assume that we are going to get from core and from hosting. Because we invested $millions in improving the infrastructure, but once it's done, we start to see, you know, the benefits of it. We see that the gross margin is going to continue to increase, as we are going to get a lot of leverage out of this component. Joe, do you wanna see if they can hear us now? I'm sorry? You still wanna make sure that they can hear us? Mark, can you hear us better now? I think we're gonna have someone come on and fix Lior's microphone. Let's take a second to do it just to make sure that we got it. It's only Lior's microphone? Yep. All right. Okay. All right. We're gonna fix Lior's microphone. Can't hear. Okay. Are you hearing it? Mark, can you hear me well as well? Yes. Yeah, you're looking good too. Okay. Thank you. There we go. Thank you. It's only Lior that's problematic. Finally. Come on, guys. Finally we got a compliment from Mark Mahaney. Oh, you got it. Finally. Come on. Okay, now we're good. All right. Test it. Now we're good. Mark, you're the best. Yeah. No, I don't think. Mark, can you hear Lior now? He's on mute. He's on mute. He's on mute. Okay. Mark, you're on mute now. All right, never mind. All right. Thank you. I think we'll go to Deepak. Deepak at Wolfe, do you have a couple questions? Yeah, great. Thanks, guys. Lior, maybe I'll start with you. First, on the self-serve target, how should we think about the price mix with volume you achieve this target over the next two, three years? You know, how much do you need to grow the 6.1 million subs you have today, and how do you think about sustained pricing power of the model? Then maybe kind of related to that, a bigger picture question. Beyond financial models, where do you see big opportunities to sort of capture new subscribers? Obviously, there is a market growth component to it. There is potential for market share gains. Maybe can you sort of talk about the levers to kind of bridge the subscriber growth? Okay, we start with the first one, and perhaps we'll move to Avishai to talk about the market share gains and so on. Let's start with the first question. First of all, the model does not assume any change in pricing in the next three years in order to achieve the targets that we put. You need to remember that for self-service creators, more than 60% of the revenue for the next three years already exist in the existing quotes. Meaning without doing anything, no new quotes, new marketing and anything else, we already have 60% of it in our model. Actually we need to, you know, bring new customers from new quotes only about, and it's only about 40% of the revenue. When you think about it, you don't need to do a lot of changes in order to make it happen. In addition to that, we've always managed to improve conversion. We always managed to improve the output because of new product that we build, new services that we introduce to the market. You know, payments, for example, was one of them, and payments is part of this business as it's part also of partners. We assume that double-digit growth for the next year is something that is very, very reasonable, and I believe that we already showed that in the past few years. I mean, that was the case. Avishai, you wanna take the question around what we anticipate for market share gains or what we would need, I think, for market share gains on the model? Well, I think that in terms of the model, I think we are looking at natural progression of market share. We are not looking at anything dramatic to happen. We have to. I think it's a big part of it is that we know who our competitors are, who we are, and we understand pretty much what they're gonna do, what we're gonna do, and how this is gonna reflect. What we mostly look at is the natural expansion of SaaS CMS or SaaS website builders as part of the market. I think that to achieve this model, we don't look at any kind of an aggressive growth beyond what is the trend now. I want to mention again, you know, one in four new websites of any CMS, right, today on the planet are built with Wix. We are already winning with self-creators. Pretty much almost more than half, I think, of the sites created by self-creators are being built on Wix. We are going very quickly, right, into the agencies, and that is adding to that. I think the natural expansion of the market of self-creators, plus the addition of our expansion into agencies and partners, will pretty much guarantee that we're gonna get the market share that we need in order to achieve this model. Great. Thank you. Great. Thanks, Deepak. Next, we're gonna go to Andrew Boone at JMP Securities. Hi, guys. Thanks for taking my questions. I have one more on kind of product and things about the cadence there, and then the second one more on the model. To start off in terms of product, as we do think about OpEx reductions going forward, you know, the model has really been driven by product innovation and just the breadth as well as the depth increasing. How do we think about the pace of product launches and the cadence going forward, given the fact that you guys are pulling back on OpEx? For the model, can you just double-click in terms of marketing? You know, as we think about that as one of the biggest OpEx line items, how do we think about that, just leverage on the marketing line? Thanks so much. Well, you're asking about the tension between OpEx reduction, but we still need developers, right, in order to continue and provide product innovation. One of the things that we spent a lot of effort in the last couple of years is the ability to do more with less developers, right? We introduced Velo for that. We have we didn't announce it, but we completely rebuilt how we do infrastructure on the back end, and we're gonna announce this year another technology that is dramatic in the effect of how you build applications on top of Wix. Those things combined give us the ability to innovate very quickly with the same amount of developers that we have. We do also see that a lot of the products that we had that, you know, it took us a long time to build, shopping cart, scheduling, booking, events, are all now in a place where they move from being something that generate revenues, but not as much the cost of developing them and marketing them, to a place where they are profitable. I think just that naturally would also create another effect forward. This is also true, right, for Editor X, for Velo. All of these things that we develop and spend a lot are now becoming profitable. With regard to the marketing, I think that it makes sense also to share a few data points. For example, sales and marketing in 2020 was about 42% of revenue. In 2021, it was about 37% of revenue. For 2022, it's about 35%. I assume that the 2% down on a year-over-year basis will continue, and therefore, by 2025, the sales and marketing is going to be around 29%-30% of revenue. The leverage is obviously very obvious. It's coming from a few places. Some of it is actually from headcount that is part of the marketing. Some of it is from the partners organization for the salespeople that we hire in order to build the B2B partnerships. As this business is actually scaling up the quota of salespeople, for example, also increasing and changing. I believe that we are going to get a lot of leverage from those places. Therefore, you should assume about 2% as a percentage of revenue down on a year-over-year basis. I think it's also worth, Lior, just complementing this also with just a few words about the TROI, and this is also something that. Yeah. that we shared. You know, you've seen us and we spoke about in the past about our 7-9-month target for the whole cumulative marketing budget that we were spending. As partners became a more significant part of it in the last few years, you could start seeing some moderation in that slide I showed you where the amount of all the return in the first month is declining a little bit. That is because of the blended average also with the TROI of the partners. Now, when we break it apart, I think it's very clear that the 7-9-month target for self-creators remains the same, whereas currently we are operating the partners at about 10-12 months target. As I said before, this may continue to change a little bit because we're seeing so much compounding growth in the cohort behavior that it may make sense to invest even more. That's obviously all gonna go into that leverage on the marketing investment that Lior mentioned before. Mm-hmm. All right. Great. Thanks, Andrew. Let's go to Trevor Young at Barclays. Great. Thanks. A few questions on the geo footprint going forward. Is the partner strategy and in particular B2B, a mechanism for getting better penetration into certain regions? And if so, you know, what regions might those be? And then any color you can share on ARPU and profitability across regions today and where that maybe, you know, goes through 2025. You want to take the geographic. Yeah. Lior can maybe talk about the. Yeah. I think absolutely both the partners in the B2B partnerships is, as you said, a great way to leverage higher penetration into the different regions. You know, Avishai said this at the beginning, we are very widely spread already, and we're operating in pretty much any country of the world where we are allowed to. Clearly the level of penetration we have in some countries is not or in the more mature markets such as the U.S., is not the same as we have in I don't know in Germany. The goal is to keep on enhancing that penetration. A lot of it is coming from localization of our products and our designs and all the key. The components which the customers are using. Definitely we're gonna start leveraging also the power of the agencies and the designers and those big deals in order to go much deeper. I'm not gonna name the specific geographies for obvious competitive reasons, but this is definitely something that we're looking. At the end of the day, we are looking at kind of going global, fully global. We'll obviously cadence this by priority and opportunity, but the goal is to go country after country. That's really helpful. Just to follow up on that and in light of The comments about kind of more muted headcount growth going forward. Do you feel like you have the right headcount for some of that localization that you have to do, you know, kinda country by country? I think at this stage, yes. Obviously, you have to remember that when Lior mentioned that we will continue to grow headcount, but just in a much more moderate way than we have done in the past years. I think if you take into account our current growth so far, and I think we have seen an amazing growth throughout 2019 up to 2021 in terms of headcount. We really managed to bring in not only a lot of people, but also amazing talent. We're gonna continue to ramp up in the right areas in order to go deeper and deeper on these kind of opportunities. By the way, to your question about the RPS and profitability of the different regions, we're still at least on the self-creator side, and by the way, and also on the partner side, we are working with the TROI methodology, which means that we can adjust the investment to the returns based on the behavior of that specific geography. Great. Thank you. All right. Thanks, Trevor. Next, Elizabeth Porter at Morgan Stanley. Hi. Thanks so much for the question. First, I wanted to ask about the rebound in growth after fiscal 2022. Can you just parse out the impact from the price increases that you announced in April and May, and then layering some of the B2B contributions of those large deals? Second, kind of just what drives your confidence in kind of the durability of that growth longer term? Thank you. Start with the first one. The impact from the pricing or the price increase is not that significantly in 2022. Most of the effect is actually in 2023 and on because when you think about it's not going to happen in the same day, because it really depends on when the subscription is done and when it's renewed. It's also something that we've done only in the second half of the year or almost in the second half of the year. The contribution of the price increase is very small in 2022. With regard to the second part of your question about why this business is durable and why we believe that it will continue. Actually, there are two reasons for that. The first one is, as I mentioned before, 60% of the revenue in the next three years is coming from existing cohorts. As Nir described in the presentation, the $16 billion that we have from existing cohorts. This is exactly, you know, the case. When you think about sales creators, you have all those old cohorts from many years ago, they're still generating a very solid revenue for the next years, and we are not assuming that this is something that is going to change. It will continue, obviously. This is already 60%. The rest of the 40%, I think that we have a proven history of how successful we were to generate growth into this business. You know, even in the last couple of years with about 20% growth on a year-over-year basis. Because we will continue to invest in the platform. We said before that both partners and sales creators are in the same platform. In the end of the day, many of it is the same product. When you invest in eCom, you are actually supporting both segments. We believe that the conversion for sales creator will continue to increase. We believe that we are going to penetrate more globally into new regions that we don't have today. We believe that ARPU will continue to increase, and we believe that payment is going to be a bigger part of the overall business. This is why it make us believe that, you know, all those reasons that sales creators will continue with double-digit growth. Great. As a follow-up, I wanted to ask on just the B2B deals. As you've gotten some larger names, Vistaprint and then most recently LegalZoom, while it's still early Any sort of factors that you can speak to on brand recognition and willingness for brands to partner with you? What's the opportunity to see some accelerated pace of announcements in B2B as you've gotten some of these larger brand names in? Thank you. I think that definitely the fact you're announcing a deal with some company like Vista, like LegalZoom, on its own is a big contribution to how the market perceives you. Definitely we can say that since we started it already with Vista and now with LegalZoom, we're just seeing the pipeline expanding and growing, which is why we also believe this is another facet of our business that can continue to grow over quite a long time. I think that if you look at it, also what people are asking us for, and you, I think you heard that also from Robert on his interview. It is very clear that they are not asking us to be a white label or solution that is hidden underneath their own technology, but they actually want the Wix brand on their website, part next to their own, and side by side to their brand because it is now associated with professionalism, the success with best in class. I think that is, first of all, that's an amazing result which we are very proud and happy about, but it's also definitely something that will continue pushing this initiative going forward and increasing the potential of this pipeline. All right. Thanks, Elizabeth. Next we're gonna go to Matt Pfau at William Blair. Hey, great guys. Thanks for taking my question. Wanted to ask on the assumptions over the next three years and longer term. Obviously business solutions are the faster growing component relative to creative. What are some of the drivers behind that? Is it mostly payments, which I would assume it would be? Does that assume entering new verticals? Does that assume just a higher mix of commerce solutions being uptaken? Some detail there would be helpful. Yeah. The assumption behind the business solution, you know, we mentioned before, we have the G Suite solution that we provide, some applications like Ascend and so on. We assume that those application will be growing the same as the business itself, not more than that. Meaning that most of the growth is actually from payments. We assume that payment is from a few reasons. First of all, this is a compounding business. You have existing customers that drive more GPV, and you know, through their customers, but you also bring new one. It has a compounding effect, which is more, for example, than the self-service business itself. The second thing is about the take rate. I assume the take rate will modestly increase on a year-over-year basis, which also have a positive contribution over the payments. Therefore, it's going to change a bit the mix. Not dramatically, but it will change the mix. Got it. Just wanted to follow up, and you know, you guys may have answered this earlier, but at the start, the audio was a little bit hard to hear. Maybe just sort of talk about what some of the assumptions are behind the possibility of the Internet growing faster than the pre-COVID rate. That would be helpful. Well, you're asking what is the chance that the internet will grow faster than before COVID? Sure. I think that it's actually. This is again, my opinion, right? I can explain why I think so. First of all, I believe that there is a very good chance that internet actually could accelerate as it move forward. I think a lot of it has to do with the fact that COVID did change the way that we consume things, right? A lot of. I'm sure everybody here can relate to things that before COVID, they would do offline and now they're doing online. This is one side of it. The other part of it is that what we're seeing in the content creators and in people that have moved their business completely to being digital, and that's something that is a new thing that is starting. We can see people, you know, teaching yoga on YouTube or teaching cooking classes. A lot of that is something that is growing very quickly. Tutoring over video. I think those two trends, alongside the fact that the younger generation is more comfortable with technology, combine to a force that will generate faster growth on the Internet going forward. Again, this is my personal opinion. For now, I can only share the numbers that everybody knows, I'm sure, about those guys. I do believe that we're gonna see the Internet actually accelerate in the coming years. Not go back to 2018. Actually go grow faster and be more interesting thing. Thanks, guys. Next let's go to Mark Zgutowicz at Benchmark. Hi, guys. Just to get maybe a near-term question then a long-term question. To get comfortable with your business solutions gross margin outlook, I think it might be helpful to understand sort of where the segments within business solutions gross margin are today. You have three primary segments, Google Workspace, Wix apps with third-party apps, and then you have transactions or payments gross margin. Mm-hmm. Can you share what the individual gross margins are, for those three segments? I have a long-term question. Thanks. I can provide some light, but you know, for the Google part, I cannot provide the gross margin because we cannot do it, you know, in terms of relationship with Google and the agreement with them. We cannot provide the margins that we have with Google. This is one. The other part about the application is a very high margin, obviously. It really depends on what the application is, if it's a third party or if it's a Wix application. If it's a Wix application, the gross margin is pretty high. It's more than 80%. If it's a third-party application, it can be somewhere between 20%-30% gross margin. Again, I'm sorry that I cannot share the Google gross margin part. How about the transactions, gross margin itself? Transaction gross margin is mostly based on payments right now. It also include, for some part, also shipping. Shipping we recognize on a net basis. Percent of gross margin, it's still not that big. With regard to payments, as I mentioned many times before, you cannot get more than 30%-35%, in terms of gross margin because about 2% go to the credit card company. There's also limitation in terms of what you can negotiate with them. Most of the leverage is coming from the operational part, meaning from our people that manage payments. For example, people that are responsible for the KYC and so on, the care that support the customers of payments. There we are going to see some leverage that is going to help us with the margin and improve it. I think, Lior, if I can just add, I think we haven't really seen that leverage yet, right? Yes, definitely. We've added a lot of people in the last two years. Yes. to the organization that Yes. payments organization specifically. That leverage is to come, but still today, we're not quite there. You're absolutely right. We are already going to see that in those three-year plan. You know, with the three-year plan, we are going to see the leverage coming from. Because we already created a department that's supposed, you know, to go and to make sure that the KYC is fine, you know, to go over a certain risk, because you need to also to have some kind of a risk management and so on. We created also the infrastructure to support it. We created the care team in order to help, you know, customers that dealing with payments. It was already done. It doesn't mean that we are not going to add headcount and it's scaling up, but the basis is already there, and therefore, you're going to see kind of scaling up in term of the profitability as well. Does the core support then imply sort of a single-digit gross margin for transactions than today in terms of that downward pressure transactions? Yeah. Again, what was the question? Just trying to get to the, you know, rough number for transactions gross margin today. You reported 20% overall business solutions gross margin in 1Q. I'm just trying to get to sort of what transactions gross margin is implied in that. It's gonna be approximately 70% in terms of the gross margin. This is the assumption around it. When it gets to a kind of fully get the full leverage of what I explained before, we will get to about 30%-35% only on payments. Yeah. Mark, I think you had a long-term question you wanted to ask. Yeah. Just as we talk about 2023, I know a lot of the sort of, I guess conjecture in terms of 2023, and obviously none of us know exactly what 2023 is gonna look like. You know, I guess, we obviously have a rising inflationary environment, rising rate environment. So if 2023 is not normal, and we see sort of the demand pressures that you're seeing, you know, this year as it relates to COVID sort of carry into next year and more specific to inflationary and rate pressures, how do you manage the business through that environment? How does that change your strategic priorities that you've sort of laid out here over the next few years? Obviously, right, if we see that demand continue to stay small, we will have to take action to make sure that, you know, we will continue to run the company in a profitable and cash flow efficient way, right? I wanna remind again that our growth is a factor of many different things. COVID was an exception in a positive way. Oh, and this year, we feel it in a negative way. Historically, okay, and we had a chance to experience a few economy crises for the last weeks, and we've seen that normally when there is a crisis, people try to start something new, try to find ways to innovate, and all of that actually are positive for Wix. Again, every crisis is different. It doesn't necessarily mean that what we've seen is gonna be what happen. I'm less concerned with the interest rate. I'm less concerned with the oil prices. I'm more concerned in manufacturing that allow people to create products and sell them. That is something that I'm a bit more concerned about. I think that it's not that likely that 2023 will reflect 2022. In addition, if that does happen, we'll take proper action to ensure that we get as close as we can to the model that we presented here today. Yes, exactly. We also need to bear in mind that this is a three-year plan, meaning that if the headwinds continue in 2023, by the mid of 2023, for example, it doesn't change the scope that dramatically for the three-year plan. There is some cost management that you can do, but I think that what is more important is what we see right now in the business that we actually control. It's not going to change significantly unless you assume that those headwinds will last for two or three years long. Okay. Thanks, guys. Appreciate it. Thanks, Mark. Next, let's go to Ron Josey at Great. Thanks, guys. Thanks for taking the question and for joining during the day. I wanted to ask maybe two. Just the first on the partner cohort slides, Nir, that you highlighted and the adoption of bookings, you know, what you're seeing in the first few years. I know we're at a lower base currently, but certainly faster growth. Nir, can you help us understand just what's driving that adoption between partners just working with and being more comfortable with Wix products versus what you all can do to improve education of the partners in terms of how they can use all of Wix properties? Avishai, I had a quick follow-up. Yeah, absolutely. I think that there's a combination of a few things and you know those graphs reflect, I think, both the improvements in products over the years. When you look at what we've done in order to support needs of partners over you know the cohort graphs I showed you before start in 2016. Over the length of those years, we've done many things. First of all, we've done many things that are generalized and contributed both the self-creators and the partners. We made massive improvements to our stores solutions, to our scheduling solutions, to our event solutions. All of those obviously were relevant for both a self-creator that wants to create his e-commerce site, but also to an agency that is building an e-commerce site for a client. On top of that, if you look, we've made a few more things that I think contributed even more. First of all, I think, again, something that contributes both but played maybe much higher value for the partners was Velo, the ability to create custom code for a client to create a very specific capability, very specific business behavior within a website. That was something that was very important for them. Naturally, Editor X. Editor X is an environment for designers, for professionals, and that's something that had a big impact and effect on the ability to adopt and to be successful. Obviously, we're also spending more time on actually talking to them, helping them, account managing the bigger accounts, and solving issues with them, not to mention the account management problems that they're having, because suddenly you have people who need to manage many websites under one account, which is a little bit of a different back office product challenge than someone who just is building one or two websites. All of those things are obviously driving, I think in many cases, the compounding growth that you're seeing on those calls. The other thing relating back to what Avishai related in the beginning, you know, many of the agencies have known about Wix for years, and many of them actually were using both Wix and other solutions parallel for years. A big part of what we needed to do was to convince them that Wix now should be the main thing, the main platform that they're using. That was done also on solving real issues, performance issues, making our site work much, much faster. In some cases, branding issues, showing them that Wix is amazing for SEO. Wix has been great for SEO for many years. We needed to actually grow and change the way people think. We were out there for the past two and a half years, spending a lot of effort on it and changing the way that they perceive our platform in order to make Wix the go-to platform in their agency. I think that's what you're seeing in a large part of that massive growth and compounding growth you're seeing in the cohorts of the partners. I think that over time, that compounding growth can actually increase. You can get even an acceleration in how it's compounding because you have more agencies that are adopting faster our solutions, moving more to our platform within the existing agencies and partners. Naturally, as our brand becomes much stronger for partners, we'll just get more partners in the new cohorts. I think we're gonna see a very steep increase there, which is very appealing, obviously. That, that's super helpful. Avishai, you know, there's a lot of questions, and you've talked about this with some of the other questions, is the balancing between innovation and profitability. You teased sort of a new product coming out here that might make it easier to build websites. Any sort of additional insights there would be helpful. Thanks, guys. Well, it's. Yeah, of course. I'll be happy to explain. I mean, this tension, right, is coming from innovation means that somebody writes a lot of code, right? You need for any product, like for example, shopping cart, right? There's millions and millions of lines of code. Every time we innovate, we have developers building something. Historically, a lot of that was using very different kind of libraries, very different kind of. What we did is that we've worked very hard to make sure that we write very little. Okay, twice. Most of what we do now can be shared among all of those applications. This is something that we already achieved, and we're going to announce this year something that enable us to build the last part, just user interface. You usually put enormous amount of effort into making user interface. Now for all the SaaS website builder, it's not just once, you do it twice, actually more than twice. Because once you do the regular user interface where our users interact with the application, but then you also have to do the thing that is on the website, where their users are interacting with the application. On top of that, you need to have multiple layouts of visualization. While we did that, when we're gonna announce it, going forward in the year, is we automated that part. We can actually do it very fast now. The result of that is that we can use the same amount of developers to achieve a lot more. I think that it was Steve Jobs that said, "Well, the trick in software acceleration is not to make developers that type faster. It is to make developers, to give them the tools that you can do a lot more with the same amount of lines of code." Right? Every line of code can do much more. I think we took massive steps toward that direction. Thank you, Avishai. Thank you, guys. Very helpful. Thanks, Ron. All right. Next we're going to Bernie at Needham. Great. Thanks, guys, for taking the questions. Just a few follow-ups on the partnership revenue. You just discussed, to answer Ron's question, how what you're doing to make sure, you know, agencies are using Wix over other providers. Are you seeing any competition in the B2B space, with other, you know, operators trying to go after that revenue? And then would love to just get a sense in terms of that 2025 partnership revenue guidance, what's the contribution of agency versus B2B, and if we should be thinking about the economics of those two revenue streams differently? The first part is that I mean, of course, we're seeing competition in the B2B space, right? I mean, traditionally, the tools by agencies will be mostly WordPress and TYPO3, Drupal and Joomla, and what we call traditional CMS systems. Some agencies have homegrown solutions, so we're seeing that as well, and developers who work there. I think that pretty much every time we convert an agency, it is from one of those solutions. Yes, we do see competition. I think we are really well-positioned and compared to those competitors, I think we have a much better offering. I think that well, if you see the numbers, right? The SaaS CMS are growing much faster than CMS systems because of those benefits. As for B2B, I think that today Wix has the best offering on a variety of websites, right? On the B2B segment, with the exception of e-commerce, where, of course, Shopify is a fantastic offering. I think that on the B2B section, if you look at the most of the possible websites, we have by far the best offering there. I'll just add to that. I think that from our experience, at least on the very big partnerships that we created, is that in many cases we see their competition actually within their kind of decision process, whether they wanna build it themselves or to go with someone from the outside. Where actually, I think so far, at least from our experience, we were the natural go-to platform. You know, in the case of this time, and Robert, I think shared at least some of it, they had, you know, a decade of trying to both build and buy solutions and then integrate what they bought and make it their own. They decided that the best way to go about it is to go with Wix because they knew that they will never commit the same amount of resources and attention to innovating specifically on this part of their business. I think we're starting to see how we're winning that competition of the mindset of do I wanna build it in-house or do I wanna go and partner with Wix? Yeah. With regards to the B2B versus agencies, in terms of the portion of the revenue, by far agencies is going to be, we assume that it's going to be larger than the B2B partnerships, simply because it's a much bigger market. All right. Thanks, Bernie. Naved Khan at Truist. Yeah. Thanks, guys. I just wanted to understand the 2025 guide a little bit better, maybe de-risk it a little bit. How dependent is the gross margin outlook on your ability to hit the $2.5 billion in revenue, or can you get there even without getting to the top line mark? If I had to think about the partner gross margin, possibly with thinking about the volume discounting that you give to your partners, is this something that you might diminish in order to get to the gross margin, or you think you might stay at those levels? With regard to 2025, the $2.5 billion that you mentioned, I'm not sure that it really depends on the gross margin. You ask what is the gross margin outlook. When we get to the- Well, yeah. Make sure I understand the question. I'm just trying to understand how dependent is the gross margin on leverage or scale, right? Can you get to the 20% free cash flow margin with maybe, you know, some lower amount of revenue, maybe $2.3 billion or something like that? Just trying to digest that. Look, obviously, you know, when we talk about leverage, it's something that also depends on scale because it means that top line growing faster than cost. In most of the cases, this is the reason for, you know, to get the leverage. Meaning that if we will be not at 2.5 but at $2 billion, it's going to change, but not that dramatically. If it's going to be less than $2 billion, of course, there is a more significant impact on the ability to get to 20%. Although, you know, if you ask yourself why we actually got to the point of the growth is not according to what we assume, so it means that we need to do some kind of a further cost management based on the reasons, based on the different reasons. If you ask about if it's going to be 2.2 or 2.3 or 2.5, yes, of course, you have this flexibility, and I don't think that it will be a major, you know, reason that we shouldn't meet the 20% of revenue, meaning the fact that we need more. The second question, I think, was about volume discount requirements. Just make sure that's important. Yeah. I think he asked about. Yep. Okay. Yeah. Yeah, on the volume discounting you do with partners currently and is that something that might go down as you kind of try to hit the gross margin target or something that you're not really thinking about actively? I think it's a little bit. It's much like thinking about pricing from our standpoint. We're always testing. In this case, it's not only statistical testing. We actually talk with the partners, understand what works best for them. We would like to find the best outcome that will optimize our ability to grow. I think in this case, because we want them with us, it needs to balance their interests as well. We'll keep on playing, understanding what's the best methodology and what's the best way to go about it over time. Great. Understood. Thanks, Naved. Thank you. Hey, guys, I wanna jump in with a question I know is on investors' minds even before this, but probably now after this, seeing it. That's the topic of the share repurchase. Obviously, our model shows a lot of cash flow generation coming. We filed with the Israeli courts earlier. Can you talk a little bit more about how we're looking at share repurchases, you know, in the future? First of all, Joe, that's a great question. Thank you for asking it. I think clearly in our minds that the management minds our stock is undervalued, right? I think, you know, a significant amount of our valuation is our cash, right? We just showed this the figure model that and those two different business lines. One of them very profitable, growing on a steady base over many years. The other one is a scaling growth, which is also very exciting. Naturally, as Lior mentioned, that will also create more cash flow as we go forward. You know, as he said, in the short term, we applied for that $500 million buyback optionality from the Israeli court, and we need to get the result, see if it's approved, and then we can plan ahead. Longer term, we're definitely gonna make, you know, consider, you know, how do we do a capital allocation and what are the best capital allocation opportunities against that cash flow that will benefit both, you know, the company and the shareholders. Great. Just one other question for you, Lior, around similar topic, somewhat around stock-based compensation. And obviously this is a, you know, a cash flow model that we've shared, but can you give us just a sense of, you know, your modeling on stock-based compensation going forward? Yeah. When you think about the three-year model, it has also effect on the SBC, the stock-based compensation expenses. Because when we talk about overall expenses and you get leverage from the fact that you are hiring less employees, we do hire employees, but less than what you used to do, we did in the last three years. It has also effect on SBC. For now, SBC is, I think it's around 16 or 17% out of revenue. As a percentage of revenue, I assume that it's going to go down by approximately 2% on a year-over-year basis. After two years, you should see a decrease of about 6%, which will bring you to approximately 12% out of revenue. It makes sense, right? Because, you know, when you see leverage coming especially from head count, it has also an effect on SBC. I think naturally, on the kind of managerial head count, HR aspect of it, I think it's clear for everyone that even with, you know, with the changes in the work environment and with inflation, everything is happening, great talent is still hard to come by, and there's amazing competition for it. It exists everywhere. It's in Silicon Valley, it's in New York, it's in Tel Aviv. It's in Ukraine, in Berlin, in Amsterdam. Wherever you go, it's really hard to compete for talent. We definitely see the equity compensation being a big part of how you tie in great talent, not only convince people to join you, but actually retain them over many years. I think one of the great things we had working for us at Wix for many years is that we managed to keep very long tenures for a tech company, and we intend to keep on doing so we can be so successful in delivering the three-year model that Lior showed you. Great. Okay. We're gonna get to two more analysts for a question. Next one is Brad Erickson at RBC. Hey, guys. Hey, Joe. Maybe before I go to my questions, could we have Lior just maybe repeat what he just said? I think most of us missed, like, all of it, unfortunately. Okay. About the stock-based comp. A microphone issue? Because of the microphone issue? I think it may have been, but it was largely. Joe, maybe you can hear it. Which, just to be clear, Brad, is it the part about the stock-based compensation? Yes. Right. Exactly. I think what Lior said was that today our stock-based compensation is around 17% of revenue. If you look ahead, we predict that percentage of revenue will drop by about 2% per year. As we're hiring less people, which we've said clearly in the model that our hiring is going to slow, that naturally will start to reduce obviously share grants and stock-based compensation. Perfect. Great. Then, yeah, just a couple follow-ups on the partners business. When you think about the 25 targets you gave, how much of that do you think and the growth contribution-wise, how much of that is coming from sort of like upper market, or we'll call it slightly more sophisticated e-commerce companies versus like the true long tail, less sophisticated e-commerce, do it for me type customer? That's the first one. Then the second one, as you head towards this, you know, three-year target and improving margins a lot, how would you say you're sort of allocating product investments between, again, if we bucket the two, that sort of upper market e-commerce, more sophisticated e-commerce versus long tail, do it for me type customers? Well, I think for the first part, I want to mention that, and I should start by saying that mostly, partners not just build e-commerce websites, right? They build many kind of websites. So, and so when you look at the partner business, right, it generates a variety of different kind of businesses. A lot of them are big, and some of them are small, and of course, it's a variety. You don't normally see the long tail go to partner because the long tail would be mostly personal people or very, very small businesses that cannot afford a partner. So the partner business, just by its nature, is mostly larger companies. We do have some big e-commerce customers, and we see that portion growing all the time. We actually have more and more of the larger e-commerce, which is kind of coming with the fact that we're able to do it, right? If you looked at our commerce about 2 years or 3 years ago, it was not able to support such businesses. Today it is. As the technology is getting better, the product is getting better, we're also getting those kind of customers. As for your, the... By the way, I wanna mention that two major things that enable that are the maturity of Velo. You can actually program today things on Wix in a way that is really unique and a lot of those things you cannot do on competitors' platform. We are starting to see some of the really big players taking an interest in that. The second question was allocating product investment to as how much is it going for the upper market compared to the do it for me? I think that for the do it for me, we have a fantastic offering now. Obviously, most of our effort is to enhance the platform in a way that enable us to go after a bigger customer or allow, I would say differently, to allow bigger customers to use Wix in a comfortable way and actually extend Wix in the way that they need in order to to use the system and create better websites. A big portion, right, of what we enjoy is the synergies between the fact that when we add... I'll give you the most basic example, import and export of a catalog of products, okay? This can be e-commerce, but this can be also, you know, if you're doing scheduling for yoga classes, right? When you have five products, you don't really need that. When you have 5,000 products, it become very important, integration between your existing CRM system, your inventory system to Wix, right? And those things are usually you'll find them in the bigger kind of customers. However, we saw the example of the couple showing you the classes that they are teaching, and that was again a very big thing, and that's a self-creator. The synergies, right, make it that we invest here and enjoy that here. In theory, some of the, well, the bigger customers, right, tend to require a bit more in the management tools, and that is the difference. I think that the last part I want to say maybe about that, a development team, right? When our development team create new verticals, they usually start only with self-creators 'cause that was the, right, the bread and butter of Wix. Today, when we are working in something, we usually balance that, and we look at both needs. A lot of the time, it actually means that we have to do less and not more, because we from day one plan it in a way that we can extend it to all the functionality that is needed. I think in long term, like we look at the two years from today, those synergies between both will actually grow and make it even easier for us to address the two sides of the market, the bigger customers and the small customers. Great. Got it. That's great. Thanks. Thanks, Brad. Let's wrap up. Sunil with Berenberg. Hi. I just have two questions. One is on the DNA and R&D spend. I want to understand what you are modeling in terms of these lines on your targets for 2025. My second question is about can you talk a little bit about what kind of product improvement initiatives you have taken? For example, what is the number of SKUs that your platform currently supports versus what it was a few years back? Anything that you can talk about versus your competition, how your platform is improving over time. I think just to clarify, Sunil, when you talked about product how many SKUs you support, are you specifically talking about our e-commerce offering and kind of the number of products? Yes. you can offer and sell on your website? Yes, that's correct. Okay. We'll start with the first one, which you got to the R&D. We are going to see some leverage from R&D in the next three years, but it's mostly from head count. If we're looking at the combined company both for self-creators and partners, and obviously the leverage is going to be much higher on partners. If you're looking at the combined, I believe that the overall R&D is going to be at around 20% out of revenue. As for the second question, well, this is one I'm actually gonna enjoy, right? Because this is a thank you, right? I normally don't go this technical when I'm on those kind of calls, but I'm gonna try and explain it because I think this is a very important message on where Wix was and where Wix is. If you look at a few years ago, you pretty much could use what you have in your basic shopping cart product, right? We have many products. I want to remind you, everybody, that we have many e-commerce offerings, right? Selling items, selling classes, selling events, event tickets, seating, we have a lot of them. Let's focus for a minute on the shopping cart, right? The thing is that when you look at companies, normally they have 10, 20, 30, 40 SKUs, but you do have those that have thousands. When you look at those that have thousands, it's not to support them on your database. You want to support them on their database. Meaning that you want to create this bridge that take their database and their product list and then move it into Wix. To do that, normally with any platform outside of Wix and you actually need a team of developers integration, and this is complex. With Wix today, you take Velo, right? You just use what we call the e-commerce API, the catalog API, and you integrate it. It's a few lines of code. You don't have to run it. We run it for you. It's hosted, we maintain it, we make sure it's running, we make sure it's always available, right? You create this bridge between the SKUs that you have in your database, in your systems, to what you have on our shopping cart. I think today, Wix is the only platform that can enable you to do it in such a simple way without really massive development effort. The answer to your question is that we support as many SKUs as your database can contain. Okay? In order for you to integrate that, you pretty much need to do very little, right? That is very unique about our offering today. Which goes to show that, yes, in the past it was true, we could support very few, right? Because most of our customers will be self-creators with a few carts, with a few products, right? Now we're in a place we can support pretty much any number of SKUs. Not only that, immediate real-time integration into your product catalog. I said Great. It's a bit more technical than normally, but I'm sure you all seen. Actually, I enjoyed. I understood everything. Well, that's actually a great one to end on because I think it somewhat encapsulates what I think a story we really wanted to make sure that you all heard and understood about Wix, and that is that, you know, we have a platform here that obviously operates a very stable and profitable self-creators business. I think everyone's very aware of that. I think hopefully today we saw a little bit more, and you saw a little bit more about how profitable that business really is. We're layering on top of that now a new business going toward a professional market and much more advanced users. It doesn't take us an enormous lift to do that. Certainly on the product side as we've seen. We're already scaling that business in a nice way. We now feel like we've got really nice visibility into that business becoming a very profitable business in the next several years. This is a lot of what we wanted to make sure that you all saw and hopefully that came clear today. We wanna say again thank you. We're really appreciating taking the time to be with us here today. I think that it was for us a lot of fun to prepare this deck and show us what we think and how we think and see you soon. Yeah. Thank you. Thank you. Thank you, everyone.