Good day. Thank you for standing by and welcome to the Wix Q1 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a Q&A session. To ask a question during this session, you will need to press star one on your telephone. Please be advised today's conference is being recorded. If you require further assistance, please press star then zero. I would now like to hand the conference over to your host today, Emily Liu, Investor Relations Analyst. Ma'am, please go ahead. Thanks, Michelle, and good morning, everyone. Welcome to Wix's Q1 2022 earnings call. Joining me today to discuss the results are Avishai Abrahami, CEO and Co-Founder, Nir Zohar, our President and COO, Lior Shemesh, our CFO, and Joe Pollaro, our GM of the U.S. During this call, we may make forward-looking statements, and these statements are based on current expectations and assumptions. Please consider the risk factors included in our press release and 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. You can find all reconciliations between our GAAP and non-GAAP results in the earnings material and in our interactive analyst center on the investor relations section of our website, investors.wix.com. Now, I'm going to turn the call to Joe, who will be moderating the Q&A with the team. Joe? Thanks, Emily. Avishai, you opened the shareholder letter this quarter with why you believe the Internet will continue to grow. Can you explain a little bit more about your conviction around this growth? Yes, Joe. Thank you. I think it's based on a few things. First of all, if you look right in the United States in Q1, the GDP actually went down, right? While the Internet has still grown. We've grown at around 14%, and we see that most of our peers have also grown, right? That's showing that the Internet is still growing, and probably when the GDP growth will go back to normal toward 1% or a bit more than that, then we're probably gonna see another acceleration on the Internet. Another thing that is affecting the Internet today is probably that during COVID, we saw the Internet growing at two or three times the average pace of growth. I think now we're digesting that growth. Probably it makes sense, right, for growth to revert back to the mean. I think that is another part. If you look at the micro level, right, at the things that actually create that growth of the internet, SMBs, right, almost 50% of them are still not online. That is a reason that we're gonna see a lot of continuous migration from that. Think about your own life, right? There's still so many things that we do, booking appointments in some places, consulting, learning. There's so much more that we're doing every day that would make sense to do on the internet, and it's not there yet. I think that is another part that we're seeing. A lot of the commerce is migrating online. Yes, we are in a place where reverting back to the mean. Yes, there is a very heavy weight coming from GDP going negative. I think overall, the Internet. My belief is that the Internet will continue to grow in the future. Why do you think Wix is well-positioned to benefit from this growth? Well, I think that there's a few factors that play for us. Today, we are the largest platform for self-creators, right? I think that self-creators are people that, right. They build and manage their own website. I think that every year you have more young people that are really being exposed to technology, feel very comfortable with technology. This grows as a percent of the population. Those are self-creators, right? Those people, a lot of them wanna be the one who control their destiny and their marketing and their website. I mean, that trend, just by itself, will continue to make our market grow, right, on the self-creators. We see massive growth in partners, agencies, right, that make websites for others. We started to market Wix to that crowd about a few years ago. We see massive growth there. We disclosed that, as we've shown. I think continued product innovation, right? The biggest barrier to when people use Wix is if they can do it in Wix, they'll do it in Wix. If they can't, they will not. I think we have been consistently proving over the years that we are really good at that. We continue to innovate and continue to add functionality, I think, by doing that, increasing our market size. I wanna talk a little bit about the competitive landscape. We've had many different competitors over the years. How do you view the competitive landscape today, and what are you seeing in terms of any changes in market share during this time? Well, we don't see any significant change in the market. There's no new competitor that takes new big market share growing very quickly. Mostly, SaaS website builders are still growing faster than anything else. And pretty much in every metric that they are leading the growth in the category of website building or content creation. Within this category of SaaS website builder, Wix is growing the fastest. In fact, this quarter, we added close to double the number of net new subscriber as the next closest competitor. I think we are growing very quickly, right, in the website builder and SaaS website builder. I think again, you know, the key for All-in-one functionality for small businesses to move online. Historically, and I think it's gonna continue, we are innovating faster than most of our peers. I wanna touch on online commerce, something that's obviously an area of growth for us. It's clearly slowed here after accelerating a lot during COVID. We benefit from being a horizontal platform. Can you talk a little bit about why that is a benefit for us, rather than being just exclusively for one type of vertical? Yeah, of course. Well, we've seen a slowdown in online shopping, right? We see it all around, right? We saw it on Wix, but we saw it on Amazon, Shopify, PayPal, pretty much everything that has online shopping. Maybe it kinda makes sense. If you think about, right, for the last two years, we've been locked in the house, and now we all get a feeling that we got this free get out of jail card, right? We actually go out and do shopping. I see it for myself, doing shopping that normally I would do before COVID on the internet, and I just wanna be out in the fresh air. I think that is a big contributor to the slowdown in commerce. I think the lack of manufacturing in China and shipping and rising inflation, rising energy prices, war in Ukraine, all of those generating an additional strain. All of those combined to a slowdown in commerce. I also think that most of those are temporary, right? China will open, the war hopefully will finish. Hopefully, no new wars are coming. I think that's something we've seen in the regular commerce. However, Wix is very horizontal, right? We have a lot of different things that we do as commerce, and of course, products like booking events, travel, scheduling, and those are less affected, right? We can see that, I think the diversification of what we offer also give us stability on the long term. Fantastic. I wanna move over to some financial topics now. Lior, let's start with 2022, the rest of this year. Can you walk through the expectations that we provided this year for the rest of 2022? Yes, sure. If you guys remember at the beginning of the year, we thought we'll be at around 20% growth on a year-over-year basis. Actually excluding the impact from the headwinds, you know, and Avishai spoke about it, revenue growth would have been 20% year-over-year. For Q1, we grew 14% off of 41% on a year-over-year basis. Some of the headwinds that we actually see result from slower payments as a result of lower GPV from the slower near-term growth in e-commerce. Again, Avishai spoke about it a lot. Weaker top of the funnel and changes in FX rate, which by the way, mostly affect the H2 of the year. We also see a higher level of uncertainty than earlier in the year, obviously because of the overall environment in the world. That said, we are almost halfway through the year. We are also seeing a stable conversion and assuming that stability continues, we expect revenue growth of 10%-13% for the full year. I think that it's also important to mention that without the headwinds from Russia and the changes in FX, revenue would have been 12%-15% on a year-over-year basis. The fundamentals of our subscription business remain very strong with consistent conversion rates and retention rates. Okay. We also mentioned in our materials that we adopted a plan that was approved by our board to reach 20% free cash flow margin by 2025. I know we're gonna talk a lot about this at the Analyst & Investor Day on Thursday, but just briefly give us a preview of how we're gonna get there. Yeah. Joe, this is something that we are very excited about because as you know, we invested a lot about the new initiative in the last three years. We see the fruits of it, but we also start to see the leverage from those investments. We do expect to generate about 20% cash flow margin by 2025, mostly driven by the continued profitability of self-creators. We're actually going to show you on Thursday how profitable this business is, and leverage from Partners business as it scales up. I think that we all saw the growth on a year-over-year basis of Partners. We believe that this is something that will continue. Our self-creator business is already at this high level of profitability, so we expect it to continue. As our partners' business scales, we will see increased margin, which also drive margin expansion for the overall business. Most of the leverage is actually going to come from the partners business. We will share more information around this on the Analyst Day. In general, you should expect about five points of free cash flow margin expansion every year. Okay. A couple of topics I know investors are gonna be focused on with our results, gross margins. How are gross margins gonna progress for the rest of this year? I'll try to explain. At the beginning of the year, we did expect high revenue growth, which would have caused Creative Subscriptions gross margin to increase in 2022 versus 2021. Despite the macroeconomic headwinds, we remain committed to driving profitable growth and margin expansion. At the high end of our guidance range, we anticipate Creative Subscriptions gross margin will modestly increase in the H2 of the year versus Q1, and that Business Solutions gross margin will increase for the full year of 2022. If we are closer to the lower end of the guidance range, we expect Creative Subscriptions gross margin to be flat through the H2 of the year, and Business Solutions gross margin will still increase for the full year. To summarize it, in either scenario, Creative Subscriptions gross margin will be at least flat through the year, and Business Solutions gross margin will increase versus a year ago. Okay. Do we still expect 5% free cash flow margins in 2022? Just on top of that then, can you explain the bridge from the current free cash flow margins that we're at to the 8%-10% free cash flow margins we expect in 2023? While we have undertaken some actions already this year to reduce ongoing operating expenses, revenue growth is a bit lower than we had anticipated, due to the headwinds that we spoke about before. If we were at the high end of the revenue guidance range, we will definitely have 5% free cash flow margin. If we are at the low end of the guidance range, we may not reach the 5% margin. That being said, free cash flow will absolutely be positive. Into 2023, we will see gross margin expansion in both Creative Subscriptions and Business Solutions. Importantly, we have significantly reduced the pace of hiring and additional investment, but we do absorb a full year of those costs in 2022 from hires in 2021. Now despite that impact into OpEx in 2022, we will see leverage in 2023, which will bring us to approximately 8%-10% of free cash flow this year. As I mentioned before, you should expect to have about 5% improvement in free cash flow every year, from now on through 2025, where we get to the 20% of free cash flow. Okay. I just wanna kind of summarize this to recap. The key takeaways here are that we are absorbing a full year of costs from our hiring activity in 2021 this year, and that's gonna be a drag on margins this year. We're gonna see benefits from slower hiring in 2023. Additionally, we're gonna see benefits from growth margin expansion in Business Solutions, and that's really coming from efficiencies in hosting and just payments continuing to scale and additional revenue growth, right? Yes, exactly. Okay. Nir, let's move on to partners, another big growth area for us. This has become a larger part of our business, and I know that the team has spent a lot more time investing in this effort. Why is partners the right direction for Wix, and how do you think it shapes the company over the next several years? Sure. Absolutely, Joe. You know, we've spent a decade basically of investing into a product and a brand around this easy-to-use, affordable platform that is serving at least, you know, at the beginning, first and foremost, the people we call self-creators, the people who come to build a website and a business for themselves. You know, over the years, as that business evolved, and it's, you know, into a very big and healthy business, we also figured out that there's a lot of people coming to our platform, but they're actually using that as what we call partners. They are building websites for someone else, whether it's a like a independent designer or agency of any kind or even bigger companies. It was very evident for us a few years ago that this is another path of investment that will take us to kind of the next level of growth in our business. Because it's another segment of our business that is probably at least as big as the one that we're serving, we've been serving for a while, and probably even much larger. You know, it requires an investment, understanding how to expand the brand to also include what they're looking for, which is more professional services and something that fits a professional. We started making those investments under the understanding that this can be another major driver for us, in the years to come. You know, we always knew that it's gonna be a multi-year effort in terms of both the perception and the brand building, and also on the pro-product side. I think that first of all, it's already paying off. You know, it's growing on its own very, very fast, about 41% year-over-year recently. If we look, you know, if you look at the cohorts of the partners versus the cohorts of the self-creators, those, the bookings retention there is three times more than what we see on the self-creators. That's a big. Actually one of the key things what we wanna try to do on Thursday on the analyst day is to kind of separate and give you more color on what is the difference between those two different segments of our business. That's helpful. So you've met with investors a lot here in the last couple of months, as you normally do. What do you think is most misunderstood right now by investors about this partner's effort? Well, I think, you know, when we just started talking about partners a few years ago, I think some of the investors thought that there's gonna be kind of an immediate result, where we knew that it's gonna be a multi-year effort. You know, a lot of our product strategy was connected to that. You know, obviously releasing Wix Code, which was great for the self-creators, but also was something that was very important for the partners in order to be able to create websites that are more complex and cater for specific needs of specific clients. Editor X naturally, which is an editing environment for professionals. The account management team that we built in New York in order to support the activity with the partners. We knew it's gonna be a longer thing. I think that over the years, there's a little bit of kind of a gap between what the investor community is understanding. First of all is about the effort needed. Even though we did create some specific things for the partners, the vast majority of our tech stack, of what we do, serves both the self-creators and the partners. When you think about the investment, when you think about our attention as a management and where our head is, we don't have to really separate between completely different businesses which are pulling from different angles. I think there's also still a little bit of a misconception about understanding fully why this market segment is so important and how are we gonna keep on running, you know, the core healthy veteran business segment of the self-creators versus the partners. I do believe that over time, as we're starting to see more and more returns coming from partners, there's gonna be a convergence and an alignment between what we see and why we are so excited about it and how investors think about it. We believe the big part that what we can do on Thursday is to try and really kind of tell the story of these two segments and give that kind of clarity to our investors and shareholders. Okay. Let's zoom back into the quarter here. You know, obviously there's been some uncertainty here in the Q1 as we've talked about. Can you describe just right now our overall cohort behavior and what we're seeing? Yeah, absolutely. You know, obviously both Lior and Avishai spoke about this kind of reduced demand at the top of the funnel that we've seen, you know, in the last few quarters. When you look at the behavior itself, once people come in, once they're within the cohort, we see a very stable behavior. It's pretty much the same conversion rates, pretty much the same retention rates. It's actually a bit higher average revenue per subscriber. And the overall, I think, of all of the cohorts together is still expected to generate almost $16 billion of revenue in the next 10 years. Just on cohorts, I mean, we spoke about this last quarter, but I think it's worth emphasizing again. Given the strength and the consistency in the cohort performance, can you explain how the large cohorts from 2020 and early 2021 are impacting our growth now and through the end of this year, and then how we lap that in 2023? Yes, absolutely. You have to kind of go back in time a little bit. When you think about it, you know, sometime Q2 of 2020, we started getting these, let's call them the COVID cohorts. The ones that came once people started getting locked down in their houses and the demand for being transactional and moving businesses online suddenly skyrocketed all at once. These cohorts were massive. It lasted throughout 2020 and into 2021. When you compare the size of those cohorts to 2019, they were so much bigger. They also, by the way, sort of behaved better. I'm gonna touch about it because that behavior kind of outlasted the subsiding of COVID. When you think about from a mathematical point of view, you had these massive amount of subscriptions in very large cohorts of 2020- 2021. They when they started to renew going into 2022, the rates were similar, but the absolute numbers of cancellations were naturally higher. This is behavior that is, you know, it makes perfect sense. It will kind of overlap for a while and then it will subside. It's affecting our net subscriptions, but we expect it not to last for much longer. I think for us, one of the exciting things that in those COVID cohorts, we've seen a much higher intent towards the business website. We've seen an adoption of higher-priced packages, which was the bills subscriptions. We've seen higher GPV and better conversion. That general behavior is even though the new cohorts are back to kind of more normalized sizes, we're still seeing that kind of behavior, which we deem as a very good sign. Obviously, that delivers the value which continues and will contribute to that $16 billion of revenue over the next ten years. Okay, great. Lastly, before we wrap up our portion and open the call up, I just wanna circle back and get your view on Lior's commentary on free cash flow. As you said, we're gonna dive into this more on Thursday, but give us more insight into profitability and the way that you all are managing cash flow. As you said, Joe, we're gonna go much deeper into it on Thursday and actually break apart the actual numbers so it'll be clear. Self Creators is really a big margin business segment for us. You know, it's highly profitable from a cash flow standpoint, which makes a lot of sense, right? I think it's also important to remind everyone that we have managed Wix toward being cash flow positive for a long time now. We've been cash flow positive for seven years now. We're gonna be cash flow positive in 2022, and we have no intention of changing that ever. We have this already one very big segment that is operating and generating at high margins. We have another segment, which is the partners, which is still operating at lower margins because of you know the more recent investments we did into it. We believe that those are gonna also increase as we go into 2023 and beyond. We're just gonna see a much stronger consolidated cash flow altogether. Our plan on Thursday is to actually try and kind of table those two segments separately so it will be very clear to understand. Okay. Emily, let's go and take questions. Great. Thanks, Michelle. You can open up for questions now. Thank you. If you have a question at this time, please press star then one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Our first question comes from the line of Elizabeth Porter with Morgan Stanley. Your line is open. Please go ahead. Hi. Thank you so much for the question. First, I just wanted to ask on the top of funnel engagement. It sounds like the fiscal 2022 guide is more a function of being further through the year versus seeing an improvement in demand. Can you just add some color on what you're seeing in the top of funnel engagement, how it changed versus last year, and any comments through April? Thank you. Of course. I think that we started to see a slowdown right in the second Q2 last year, and that was. Then things started to stabilize, and we mentioned that. Actually, toward the end of the year, we started to see a slow improvement. Obviously this year, as things got less stable, right, with the war and the inflation and other factors, we saw a small decrease. But now it's again consistent, so we don't see a decrease. We see a new steady state. The way we think about it is that we don't know how to predict when this internet slowdown will, an internet recession, right, will stop, so we have no way, we don't like to predict that. We didn't assume that in guidance, but I would say that we would assume that end of the war in Ukraine and probably, opening of China again to manufacturing and delivery will probably be big factors in that. Assuming that those things will change, we're gonna see improvement. Until then, we like to assume that it's a steady state, because this is what the data is showing us. Great. As a follow-up, I wanted to ask on the price increases. Can you provide any color on just the magnitude and when we could see it start to flow through the revenue impacts? Just given it's the biggest change since 2019, can you just quickly walk through kind of what happened in 2019 in regards to the magnitude and any impact on churn? Thank you. Sure. Hey, Elizabeth, it's Lior. You know, as you mentioned, you know, back in 2019, I think is the last time we did significant price increase. We actually, as the price increases roll over through the renewals and subscriptions, it takes time to take full effect. In fact, we stopped it at the beginning of 2020 because when COVID started, we felt uncomfortable to continue with those price increases. That being said, we always continued and always do continue to test different prices in different geographies to understand exactly what the, you know, what is the sensitivity the prices are and what should be the best one, the best price for each geography. Coming, you know, end of 2021, coming towards 2022, it was very clear to us that it's, you know, a good opportunity in terms of what we're seeing from our test results to start testing again in a more major way and going to a price increase, which we enacted in 2022. It's currently in place in the U.S. and Europe, and we obviously will extend it to other geographies based on results. It's just gonna roll out. The impact, I think, in 2022 is not significant. I think most of it is gonna be felt after. You know, it just shows the tests show us that it creates a long-term increase in cohort value, and therefore we do it. Got it. Thank you. Thank you. Our next question comes from the line of Ron Josey with Citi. Your line is open. Please go ahead. Great. Thanks for taking the question, guys. Maybe I wanted to follow up a little bit more on top of funnel, Avishai, but focus on conversion retention rates here. I think you said were steady for the past year, but cancellation rates are rising. Can you help us just provide some more information on those cancellation rates? Are they from newer subs, perhaps from lower ARPS subscribers? Any details on those cancellation rates would be helpful. Just on newer pricing or newer packages from newer subs, you know, ARPS continues to improve. Just can you help us understand or talk a little more about what packages are newer subscribers adopting that's leading to higher revenue and revenue per subscriber? Looking for just product adoption comments. Thank you. All right. Thank you. Ron, I think we might have been unclear because we don't see cancellation rate rising. We see it pretty much stable. The only difference we do see is that the inflow into the funnel, right, so the people that join Wix is actually not as high as we would expect it. Beyond that, conversion rate is pretty much the same. We do show an improvement toward more people are buying business packages, which is part of the reason for a higher driving ARPS higher. Cancellation rate is very stable, conversion is very stable, right? The only difference that we see is actually how many people try to build a website on Wix, okay? This is what. I'm sorry if there was some misunderstanding from how we communicated it. In regards to driving ARPS, we see that we have more people that try to build business, e-commerce, scheduling, things that require a higher subscription. That's one side of it. The other side of it is of course we have a payment as part of it, right? Obviously, because it gives us part of the revenues generated. The last part, right, is that we see more of the business solutions being consumed by customers, so payment, Ascend, Facebook ads, and stuff like that. Those are the reason for the higher average revenue per subscribers. Got it. Thank you, Avishai. Thank you. Our next question comes from the line of Ygal Arounian with Wedbush. Your line is open. Please go ahead. Thanks. Good morning, guys. One more on pricing because we're, you know, getting a decent amount of questions on this already this morning. Just can you compare what you're doing now to what you did in 2019, a little bit more color? I think in 2019 there were two phases. You know, one of them was getting rid of your lowest price tier, and then I think in the second round you were repackaging products. Is this more of a straight price increase or are you doing anything similar to that this time as well? You saw subs net additions kind of slow as you were doing that. Is that something you expect to happen this time as well, or is it different this time around? Hey, Yigal, it's Nir. In terms of what you were referring to in 2019, actually, the part where we removed the low priced package was back in 2018, I think. It wasn't part of the 2019 change. The 2019 change was a more straightforward increase in price like you referred to. What we've done now is similar to that to 2019. In terms of effect on net additions, yeah, there will be some impact. There always is because when you test pricing, you basically know that there will be some impact for people who are very highly sensitive to the new price. You're trying to balance it so the overall financial impact will be positive or even significantly more positive towards, you know, between what you're losing on conversion to what you're gaining in terms of the higher price point. Naturally, we only continue forward with the new prices when we test, and we see that that actually makes sense. We will probably have some impact on net additions. Okay. Helpful. Thanks. Then, not to front run Thursday too much on the free cash flow guidance, but first, any more color you could share on the difference between the partner profitability and the DIY profitability, in terms of magnitude or anything else that's helpful for investors? Then, you know, understanding better revenue growth leads to better leverage and you're, you know, you're gonna let the headcount growth kind of roll through. What other cost areas are there, maybe specifically on the marketing side, that kind of build through from where we are today to the 20% margins? Thank you. With regard to the first part of the question, we are going to provide a lot of details on Thursday, you know, talking about the different segments and the related costs and so on. You know, I can tell you that the self-creators is what you expect in terms of long-term profitability from a SaaS business. We are going to show it on Thursday. I think that it will be very, very clear. With regard you know, to the target of the 20% free cash flow and marketing expenses and so on, look, of course, when you are done with the major build out expenses of a business, you start to see the leverage. Meaning that we are going to see every year that the growth of partners is going to be, you know, much higher than the growth in cost. That will deliver, you know, a lot of leverage, which will result in a higher free cash flow, but it's mostly because of that. Marketing's always, you know, we act as a ROI for the top line. But most of the leverage is actually going to come mostly from headcount and also from infrastructure investment. Thanks, guys. Thank you. Our next question comes from the line of Trevor Young with Barclays. Your line is open. Please go ahead. Great. Thanks. Avishai, I think you said that premium subs were up year-on-year in the quarter and 2x the growth rate that peers saw. Would you just clarify whether premium subs were actually up quarter-over-quarter? And then second question, the shareholder letter alludes to actions taken this year to improve gross margin and reduce OpEx. Could you expand upon that a little bit? And are there any headcount reductions contemplated in that? And if so, what's the order of magnitude? I missed. The first thing is 2 net sub. It's 2. Yeah. Were net sub adds up sequentially. Yeah. quarter-over-quarter. Oh, yeah. That is. Okay, I missed that. I thought you meant two times. No. Yes, it is true. I think that this is one of the reason that we're saying that we're seeing a steady state with small improvements. That this is a something that I think is probably as a result that going back to the average of internet growth is now slowing down, and I think this is a part of what we're experiencing now. Again, it's very hard to tell what happened because most of it, right, is outside of our influence. It's like only reason we have some estimation is because we talk to customers or people that try to use Wix. What I did mention is that we are close to 2x the number of new net adds as to our next competitor, right? Our next competitor is in website building, right, in all of the categories of SaaS website building, right, we're growing almost twice as fast. That was my main point there. What was the second question? I'm sorry. I missed that. Trevor? Yeah. Second question was just on the steps you've taken so far this year to improve gross margin and reduce OpEx. Just could you expand upon that a little bit? Sure. Look, this year we started, obviously, when we started to see the slowdown, we reacted. Some of the reaction is mostly, you know, is something that we do or plan to do for a long term. Meaning, for example, you know, not hiring as much as we did, you know, last year. That was always part of the plan. We would kind of finish with the most of the build-out of the business. We are still going to hire, there's no doubt about it, but obviously it will not be at the same pace. The second thing is about a lot of benefit that we see in infrastructure, actually leading to a higher growth margin. Third thing is about payments scaling up. We see also better margins around it. Obviously, you know, you have all the related costs, which, you know, when you have less demand in the internet, you know, in terms of traffic, by definition, you have less marketing costs as a result of that. Remember that it's always about the ROI. Obviously we are reacting accordingly according to that. Everything together, we managed to reduce the operational cost quite a bit this year. Meaning that despite of the headwinds that we see, if we hit the high end of the range of what we provided, we're still going to be at around 5% of free cash flow this year. Thank you. Thank you. Our next question comes from the line of Matt Pfau with William Blair. Your line is open. Please go ahead. Hey, guys. Thanks for taking my question. Wanted to ask on the top of the funnel activity, obviously an improvement in the macro would help out there, but anything you guys can do on your end or that you're contemplating to help out the top of the funnel activity and, you know, get that 50% of SMBs that still aren't online to move online? Thanks. Yeah. I think that there are a lot of things we can do, and we're doing some of them. First of all, you know, it's a lot about marketing and adjusting marketing to the right period and the way the messaging should be done. This is the first thing. The second thing is increasing the availability of the product in different places, and this is how we work on, so the more channels we have. Vistaprint is one example. LegalZoom is another one. Also, you know, allowing us to market. Like, we couldn't do marketing for Wix as a shopping cart four years ago, and now we can, right? Because it's a good product. We couldn't do marketing for Wix as a really good scheduling solution, and now we can. Those are another ways that we can do in order to increase our exposure. Of course, there is always a limit, right? Because if the market slows down, okay, it will affect it. No matter how good your marketing is and how agile you are with product development, there will be some effect to that. I think that I'm very confident that if we are in a new status quo and this growth rate of the internet, we stay consistent, and then we're still gonna be able to achieve a much more aggressive goal in the next couple of years. We're gonna show you and walk you through that in the analyst day. A lot of it really is just about the thing I mentioned, smarter marketing, expanding product capability, which allows us to reach new markets and channels, a lot of the way to go after new markets. Okay, great. I wanted to follow up on commerce. You know, as you pointed out, you have exposure to a lot of different areas there. What are you seeing in the parts of your commerce business that are more related to in-person activities? Are you seeing an uptick there? Is that portion performing better than the e-commerce segment that you pointed out? Well, yes, some of them do. Some of them are still very slow. Travel is still very slow. We do see, like, things, like, events are back and, though we're not there before. They're still not where they should be, so I think there's still a lot of room for improvement there. Obviously commerce has slowed down, dramatically. I think we're pretty much in line to the average of what everybody's seen in the shopping cart. Scheduling meetings, we're also seeing that starting to recover. This is another exciting thing for us. During COVID, one-on-one meetings and group meetings were going down, and now we're seeing them again going upward. Great. Thanks, guys. Appreciate it. Sure. Thank you. Our next question comes from the line of Naved Khan with Truist Securities. Your line is open. Please go ahead. Yeah. Thanks a lot. One question on payments. If I just run the math for Q1, looks like your take rate's like 1.4% blended. I'm just curious how we should think about that as we go through the year. The other question I have is just on the current commentary, which is the one that Lior gave on the Q4 call. You said you expect growth to accelerate through the rest of this year. Even if I sort of adjust for FX for Q2, it's not. Is that decel just because payments are slowed? Or just kind of run us through the math there. Thank you. Hey, Naved, it's Nir. I'll take the first part of the question and hand it over to Lior. In terms of payments and the take rate, yes, you've seen that kind of increase, but I think that going forward throughout the rest of the year, I would say that expectations are that it should be roughly flat throughout the rest of the year. Lior, you wanna take? Yeah. With regard to the growth of the H2 of the year, obviously, yes, I mean, we do see the impact of those headwinds that we talk about. They are, you know, they have a big impact on the H2 of the year. Let's also bear in mind that most of the FX effect is actually in the H2 of the year. If we actually gonna hit the high end of the range so that the growth in the H2 of the year is going to be actually higher than the H1 of the year. This is something that we also need to take into consideration. Obviously seasonality, usually H1 is better than the H2. That said, you know, there is a lot of uncertainty. You know, we provided a very wide range, where usually we don't, of about 3%. When you think about it's almost $50 million. But that's just reflect the uncertainty that we see. You know, on the other end, we are halfway through the year, so it just makes sense to provide guidance the way that we know right now. Certainly there is a lot of impact of the headwinds over the H2 of the year. Got it. Thank you. Thank you. Our last question comes from the line of Andrew Boone with JMP Securities. Your line is open. Please go ahead. Hi, guys. Thanks for fitting me in. Can you talk a little bit about the linearity in the quarter for Europe? How big of an impact was Ukraine to results there? And then secondly, the LegalZoom partnership sounds exciting. Can you talk about any holes that you feel like you have in terms of your partnership strategy, in terms of distribution? Where are you investing there, and what can we expect in the future? Thanks so much. Europe impacts, you know, the Euro impacts from Ukraine, you're talking about the impacts from the Ukraine-Russia or just Ukraine? I'm not sure I understand the first question. Broadly speaking, as we think about 1Q and as we head into April and May, did you guys see a substantial slowdown in Europe as we kind of got into? Ah. The back half of February, March and April, May? Like, can you just help us size the impact of the war within that region? Does that make sense? Yeah, definitely we see slowdown in Europe. I think that is very similar also to the U.S., even slower than the U.S. Yeah, definitely we see a slowdown in Europe. I'm not sure we can tie it down to the war necessarily, right? I think it's. It's hard. In a way, it also has an impact. You know, it has impacts on gas prices and so on. Yeah. Well, we've seen a few impacts, right? Of course, this first one was that we have about almost 1,000 people working in Ukraine. We had to do a lot to help them and evacuate them from Ukraine, mostly to Poland. The other thing, of course, it did some slowdown to warm-up and product delivery. Not massive because most of them went back to work, right? When they could, so that is saying a lot on their mentality and their strength to do that. We saw a slowdown, of course, in Europe as inflation drove prices higher and uncertainty and so we saw that. The last thing was FX, right? Which is, of course, when you sell in euros and you count the profits in dollars that had an impact. Overall, I think that if you look at the impact from all of the wars, we had about 1% because we stopped business activity in Russia, so that was about 1%, right? We had 2% more coming from FX. Kind of like it's a bit harder to estimate what happened in terms of acquiring new businesses, but I would say that it's also about between 0.5%- 1% that came from direct effect of demand in Europe because of the war. In terms of LegalZoom, again, we're obviously very excited about it. You know, as the Vistaprint deal is maturing into reality, and we're starting to see the beginning of traffic coming from there, obviously striking another a very big deal with another fantastic company like LegalZoom is something that we're very excited about. I think, you know, we're working and strategizing how to continue bringing like the kind of big size deals to the table while continuing to, by the way, also closing out of smaller deals that are less not get to the same level of I would say don't get the same exposure as something as big as LegalZoom. I think that in terms of distribution, there's always things to improve, obviously, but we are covering many areas. We are strengthening the team there all the time. I think that also the response time and our ability to really get deals done is improved significantly and now is really a timeline that I'm very happy about. I think this is another great area of our business that is growing and maturing. Thank you. Thank you. This does conclude today's Q&A session, and I would like to turn the conference back over to the company for any further remarks. Thank you. Just before we go, I wanted to obviously thank everyone for being with us today, and we would really hope that you will also join us this coming Thursday. I think it will be a great review and much detail of this plan we're putting in place. A much better understanding of how we think about our business in terms of those, at least the core, two core segments of the self-creators and the partners, and also the kind of the path for the 20% free cash flow margin that Lior mentioned before. Love to see you there and to talk some more about it. Thank you, everyone. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.