Thanks everyone for joining us today. Hopefully you had a chance to watch our analyst and investor day videos that we posted last night. We're gonna spend a little bit of time now taking questions from some of our analysts on the Zoom. We also got some questions submitted to us over email, which we'll also work in during this time. I've got here with me Avishai, Nir, and Lior, and I think we're ready to get started. Right, guys? Yes, we are. All right. Yep. first we'll go to Brad at RBC. Brad, do you, wanna go ahead and ask your question? Yeah. Thanks, guys. Morning, or afternoon for you, I suppose. I guess, yeah, just first out of one, and then a follow-up. You can talk about achieving the, the free cash flow targets under the current growth rates. I guess current growth rates, there's, there's a lot of noise kinda going on. There's improving FX, you got some pricing in there. Maybe just help us unpack that, that statement between sub growth versus price mix, if you could. Let's just start there. Sure. I, I will try to relate to that, and, and hopefully it will be clear. I think that first of all, it's important to understand the methodology or the model. I think that this is also back to the, you know, to the previous analyst day, where we said that we are committed to the profitability targets, no matter what is the growth. Meaning that we will align cost based on the growth. To answer your question, you know, in simple words, we are just looking at the KPIs as it is today in term of conversion, in term of pricing, in term of FX, but also in term of the growth of our business, both for self-creators and partners. If we just continue that, without any changes, without any recovery of the economy, without any increase in conversion as a result of AI, without any positive impact, which we assume that we will have, you know, for the Wix Studio product, meaning, for partners, just continue the way we see the KPIs, the fundamentals of our business today, and this is exactly what it take us in order to get to the 25%. You know, that said, you know, obviously the growth can be higher, can be better, and, and certainly, you know, internally, this is what we expect. In case it is lower, again, we will align our cost in order to make sure that we will meet the profitability target, as we did in the last couple of years. Got it. Just a quick follow-up. On the subscriber growth, just when we think about that piece of it going forward, how much of that is coming from market share gains versus just kind of new domains, new business formation? On the market share gains side, where should we think about that coming from? Thanks. I think that this, this question goes to a few things, right? What we can always say is that, and we've seen even more of that last year, that the SaaS CMS market as a whole is taking a bigger portion of the website total markets, and we're seeing it on the obviously on the new website, where it's substantially bigger, but also on a website that have been renewed. Meaning that they are a old implementation, mostly built on some homegrown CMS or website management tool in some hosting company, and then it migrate to a modern SaaS offering. It depends on each year, right? Last year, we've seen actually a decrease in the total amount of website on the worlds. Obviously, that was even more in terms of the SaaS CMS products taking a bigger portion of the market. So it fluctuates, but I would assume that going forward, we're gonna see that in the next couple of years, SaaS CMS will take the majority of new websites on the planet by a big margin. I think this is a lot reflected in our just partners' business, gaining market share- Mm-hmm. Yeah. ... as that, as the SaaS CMS takes over much more. Yeah. This is something that you can see again, that partners that utilize modern tools are actually getting faster, and market share, more customers, and of course, that actually pushes other partners to move, other agencies to move to such tools. Yeah. It's very hard to compete when you build something from scratch or an old technology with a agency that adds it to modern tools. It's hard to compete on how good it looks, and how compete, and how good it works, how compete the functionality of there, and then the combination of all that is the efficiency in which you build it, which of course, is how profitable you're gonna be. Yeah. Got it. Thank you, guys. Great. Thanks, Brad. Next we'll go to Ygal at Citi. Hey, guys, good afternoon. Trying to match your, your black T-shirt dress code today. I wanna try the growth question again, maybe in a little bit of a different way. First, I mean, you talked about in the presentation how you can see the self- creators accelerate again, and you kind of showed how that progression worked based on the data you have. That was really helpful. You talked about partners potentially being even bigger than self- creators over time. You know, it feels like based on some of these growth drivers, again, with the macro, it's a little bit harder to put numbers on the growth, but it feels like there's a path to get back to the 20%+ which is I feel like investors have had a hard time kind of envisioning, but it feels like we're, we're seeing some of those things. You, you know, not to put a target on it, but, you know, like, can you bridge us there? Do you think that, that that's, that's an opportunity in, in the coming years, if, even if the macro's, let's just call it neutral? Then, on, on the product side, lots of great information, a lot of it is, is pretty technical. Can you just help us understand, maybe both on, on the Studio side and on the AI side, what, what's different about Studio and the AI stuff that you guys are doing, right? Like the ChatGPT integration and creating content is, you know, kind of everyone's got that now. What, what's different about what you guys are offering here, that the, the rest of the market might not have? Thanks. Hey, Gal. I'm gonna try and answer your first question around growth, and Avishai will continue with the product side. You know, our goal here in the three-year plan has always been to explain our methodology and how we think about how we should run the company, how we're driving the things that we control to get to the results that we want to commit to ourselves and, and, and, and to the street. Can we achieve further growth even without the macro economy on improved conversion through the AI and products that Avishai discussed on the video? Can we achieve further growth or accelerated growth through the adoption of Studio and the compounding growth that we are seeing in the partners' cohorts? Yes, absolutely, we can. The goal now is not to give projections. We want to give, you know, guidance only based on the things we know at the time that we know them, and we give the guidance. We definitely believe that we have the right levers to get back to higher growth, you know, as you said, even at the 20%+. We'll, we'll definitely continue to innovate towards that end, and these are also things that we control, and like everyone else, hope that there's some recovery in the market at some point. In regards to, you know, in regards to the question that you ask about the difference between Studio and AI, are you asking also about why is Studio different? Or just? Yeah, different, different than, than what else is on the market. 'Cause just 'cause some, some of it is, is a little technical in the way you guys presented it. You know, how are you approaching AI? You know, you kind of highlighted how you've got a lot, a lot of internal research and things like that. Like, how, how are you approaching AI, and what do you have, have that's different than others might not have? Maybe, I think it's worth answering the same question for, for Studio. What's different in Studio that, you know, isn't on the market that's, like, unique to Wix? Of course. Maybe I'll start with the I think what is the easier one, which is Studio. I think that the the concept behind Studio is that as a designer, you're used to working with tools like Photoshop and Figma, right? And those tool you work on what is called pixel-based, so you can actually position something perfectly and draw and move it, and they are very powerful tool in how you scale things, how you combine things. And most agencies, right, will have people that are very used to that kind of an interface. However, that doesn't translate to web design, where things are very fluid, content is fluid, screen sizes are different, font looks differently on different screens. What we try to do in Wix Studio is to bring the same kind of experience where you would have in Adobe Photoshop or in Figma and make it available to everybody, that they wanna be a designer on the web, right? If you know all the tool feel-- If you know those kind of tools, then, Wix Studio will feel very natural for you. We take care of all the complexity in the background of how to make it fit into a, a modern web environment. The... By the way, this is sup- as opposed to Wix.com, which is taking the experience that you would normally find in something like Google Slides or Microsoft PowerPoint and making it feel very natural for you. It's a very different UI, then also very different capability in terms of how deep you can do things and how much complexity you have in the thing you can actually create, which is why we think that Studio is a great tool for agencies and partners. As for the AI, well, we do a lot of different things in AI, so I'm gonna try and limit my answer for just a few of those. The first one is things like the responsive AI or the layout creation, right? The, the, the thing to understand is that LLM, which is what we are seeing today, large language models, are working on what we call a one-dimensional prediction, okay? Essentially, if you think about text, text always goes like that, right? Well, in some languages, it goes like that, but again, or in like this, but it's still one dimension. The way the LLM works is that they always predict the next word and take that, when they know the next word, they predict the next word after that. This is the concept behind it. When it comes to do visual things, right, visual designs, you need to take into account three dimensions or four dimensions. First of all, you have this dimension, and then you have this one, right? You position things, then you have to make sure how big they are. Then you have to look at how the color scheme and the fonts are combined with everything else on the same page. Then you have to develop a multidimensional AI to predict what is the next thing to do, right? It requires different kind of algorithms, and it requires a very different dataset to train on, and it requires very different thing, and, and because you cannot predict the next word, you have to predict the layout and then fill it with details. It's working differently, and that difference is why this kind of AI is different. Another example is how do you take a page and make it into a responsive page? Why is that important? As a designer, you're used to working with Photoshop. You build something, you build a design, take that design, but this design does not say how buttons should behave when they're on a mobile phone, for example, on a tablet, right? What we have to do is we have to say, "Well, this is the image of what you built," right? How we envision that to behave on a tablet or on a mobile phone or on a huge screen, right? That is, again, you have to use AI to be able to say that because different elements or different texts will actually create a very different effect. For you, for all of us as humans, it's very natural. To make that into a computer algorithm, it's essentially almost the same as image recognition. We kind of have to look at that and say, "Well, this is the design that you built for desktop, how we envision that to work well on something else." Now, most of the time, you use some kind of approximations, and then you get something that looks very plastic, and you immediately can see that it's not natural. With AI, we can actually make it feels very natural and look really well while trying to capture, in most cases, the design intent behind it. Those are just two examples, but there are plenty of those. Okay, some of that AI is internally developed and proprietary to- All of... All of those are internally developed with Wix.com. None of them exist outside of Wix.com. Well, I'm sure some other people develop other models for that, but our models were developed internally here, and they are kept here. Got it. Thanks, guys. Thanks, Ygal. Next, we'll go to Mark Mahaney at Evercore. Okay, thanks. I have two questions, please. One, can you talk about pricing for Wix Studio? Just in terms of the long-term margin forecast of getting to the 35% plus free cash flow margin, I think at the last investor day, that was the goal was 30%. Just talk about the biggest differences between then and now that give you the confidence to take that long-term free cash flow margin higher. Thank you. Hey, Mark. I'll, I'll kick it off with the pricing and then hand it over to Lior for the long term. In terms of the pricing for Studio, for the time being, it will be very similar to the pricing of Editor X. Whereas the way we think about the monetization of Studio is around basically enhancing all of those KPIs that I mentioned, I mentioned in my presentation. By helping our existing partners move over to Studio, adopt Studio, and by means of all of the additional functionality and capabilities that we've added to Studio, to allow them to be in a position where they are more successful, they are building more taking on more projects, building more websites, moving and adding more business applications, and therefore, having a higher ARPS per website. Obviously, once we open the Studio for the general public to just get more partners joining us because we have such a good solu- great solution, those all are gonna contribute to an even further acceleration into the growth of the partner cohorts. That's basically how we think about the monetization side of it. Lior, you wanna talk towards the long term? Yeah, sure. So first of all, Mark, I will start with the, you know, the first part of the question, because you're right. Last time it was about 30%, right now it's 75% plus. The difference mostly coming from the fact that now we understand that we can get to the target with lower OpEx. I think that one of the, you know, of the examples of, you know, the last couple of years, we understand how we can be more efficient, and also obviously, about the change strategy, about the marketing, you know, being more specific about the self-creators. So I believe that we will get to the 35% of free cash flow, not before of 2028. Might be sooner, might be a bit later, but I believe that this is, where we believe that we can get there. Thanks, Mark. Thanks, I think this is actually a good time to jump in with a question that we got from, from one of our investors emailing in. Just when you talk about the differences between the model that we presented a year ago and today, Lior, what is the change in methodology or differences between how we put together the model last May and how we put together the model this year? Yeah. Well, I believe that actually, when you think about it, there is no change. I think that, you know, last time when we were talking about it, we said that we are committed to the margins, and we will control whatever we can control, which is obviously the cost. I think that, you know, what's happened in the last year is a just testament to the fact that we were able to align the cost to the current growth rate, and I believe that this is something that we'll continue to do. Again, I want to emphasize that we are committed to the 25% of free cash flow. We are committed to the $500 million free cash flow by 2025, and we will adjust the cost accordingly. Again, so there is no change except of the fact that, you know, the growth was not as we expected, obviously, because of the macro and the environment, but we managed to prove that we can control what is under our control, which is the cost. Great. Next question, we'll go to Ken at Oppenheimer. Great. Thank you for all the details. I wanted to dive into that last point in terms of controlling what you can control. I, I think we understand that 2025, that that's a floor. If, if growth does rebound, should we think of you guys flowing that upside through to the bottom line, or do you recalibrate the spend to, to recapture that incremental growth? No, absolutely, the first thing. I mean, we will. Obviously, some of the increase will, will definitely have a positive impact, meaning that it's a floor, and, and if growth is gonna be better, you should expect to be at higher than 25%. Got it. Okay, perfect. Then the second one, just on, on M&A, I noticed that's the number two priority in terms of use of cash. Just wondering if there's, you know, anything that you guys have in mind. Obviously, you have a competitor that just bought your main business. We just love to get a sense for what you guys might be thinking on, on acquisitions. We are always looking at different opportunities, and there's nothing concrete. I can say that we will not buy a domain business. That's for sure. I don't think that that has any margin that are relevant for what we do. Generally, Nir, I mean, we, we haven't changed our strategy on M&A? No. I think, as Avishai said, the, we're always looking around. We've have done some small acquisitions in the past, we may do so in the future, I think, you know, it's clearly something that, that is an opportunity that may come up. This, you know, what we posted doesn't mean that we are aiming to make any significant change. Yeah from our current methodology. Great, thank you very much. Next question will go to Andrew Boone at JMP. Good morning, guys. Thanks for taking my questions. I wanted to better understand the 5-point change in terms of OpEx for long-term targets. Can you guys double-click on that in terms of helping us understand whether that's, that's marketing? If it is marketing, where are you guys getting the efficiencies in terms of the change? Yeah. Well, it's not just marketing. I mean, think about it this way, and this is why, you know, I, I try to illustrate. The growth in OpEx is going to be only a direct result of the increase in revenue. We have no intention to increase head count. Whenever revenue is increasing, so, you know, most of it go to the bottom line. It means that as a percentage of revenue, operating expenses will be by far less than what it used to be, you know, that previous year. It doesn't mean, by the way, that in dollar it's not going to increase. It will increase, but as a percentage of revenue, it will go down, because when your revenue go up, let's say by 13%, and your OpEx only by 5%, it means that you're getting leverage immediately as a percentage of revenue. You know, this is exactly the drill, this is exactly the model, meaning that we don't have any intention to increase OpEx beyond the variable costs that are related directly to the increase of revenue. For example, billing expenses is just an example to that. Then, as we think about the partner opportunity, as that's our greater growth driver for Wix.com overall, can you guys just speak to the size of the opportunity? Right, you guys have a significant competitor on the e-commerce side. How do you think about the Wix.com opportunity within partners in terms of kind of the TAM? Thank you so much. Mm-hmm. Yeah, I think, I mean, Avishai, you, in your presentation, shared a lot about, you know, the size of growth that SaaS CMS is taking, of CMS-. Yes CMS is largely a professional type platform, right? The partners, right. Partners, yeah. I think that if you look at agencies, most of the time, the people that will come to an agency are people that are willing to pay for somebody to do their business better. Essentially, most of the time, those will be bigger businesses. As we've seen, we're enabling two things, right? One is to have better tools for partners. We actually increase some available TAM, but not just available TAM, it's available TAM into the bigger kind of websites. If you look at companies today that are mostly, selling to agencies, you can see that most of their business will be for larger customers than the average one we have in Wix.com. There's a result from that, we can already see that retention and, and, the e-commerce revenues are, of course, higher on those websites. We can already. I think we demonstrated that. Mm-hmm ... In a deck, when we showed that, that partners, websites tend to be, to sell more or, or have more activity than regular Wix.com websites. It kind of, it's the natural thing to, to, to assume and to see. I think that overall, partner sites have a higher value and will continue to be more, more with higher value and, and, and a better retention. For us, the more exciting thing is not just a specific site, it's that our addressable, available market, where we can actually bring Wix.com to customers, is growing with it. Because when we allow more partners to use more Wi- to use Wix.com- ... into more projects, we are also making the fact that you can use, our available addressable time is, is way bigger. I think there is a, a slide on that on down listing presentation. Yeah. Okay, we'll go to the next question from Clarke Jeffries at Piper. Well, thank you for taking the question. You know, one thing that stood out to me was the sort of slope of bookings by cohort and especially the difference between partners business and the self-creators business. I've, you know, I've been looking at this before on the aggregate basis that you give in, in terms of cohort booking, but I, I wanted to ask what growth rate you're seeing in the oldest cohorts between the partners and the self-creator business? It seems like the partners business would be at a higher rate, but, curious to see, like, what the growth differential is on the oldest cohort. Hey, hey, Clark. Without going, you know, I think we, we supplied quite a lot of detail there, so I, I'm not gonna break it apart further than what we've already showed in the presentation. I would say that, that the generalization that, that you observed is absolutely that there's a much higher growth in the partners business. It, it makes sense because when, when you think about kind of the, the underlying behavior on, on a, on a self-creator, essentially, in a cohort, a small business or a person that is represented in that cohort will build one website over their lifetime, maybe two, or, you know, maybe they'll have more than one active at the same time. That's, that's kind of averaging it at, at a much, obviously at a lower, at a lower number. Whereas in partners, over time, we'll see the designers, the agencies adopting more and more capabilities and then bringing in more projects. Even if for some reason a project, you know, went away because, because the client left them, at the end of the day, if they're successful and they're building a business, then that expands. That expansion over time is what is driving basically the, that, that growth of the cohort. Now, naturally, still, the bigger piece of our business is the self-creators business. When you aggregate them, it looks much more like the self-creator, cohort than the partner cohort. Our belief is that with these new introductions, with the investments we've done that are already paying off over the last few years, and the additional introduction of Studio, our ability to grow the, the partners cohorts and accelerate them is gonna be much, much further. When that happens, and it becomes a bigger and bigger part of our business, then obviously that's gonna be a key contributor to, of the overall growth. Already today, you see that, you know, partners are growing at a 36% year-over-year. It's, it's a very significant growth. Based on everything I've showed, the, the higher GPV, the higher ARPS, the higher, the, the, the multiple sites per, per partner, and the general adoption of the platform, we believe that this growth can not only be continue, but actually accelerate. Perfect. I, I just wanted to sort of follow up with saying, you know, Lior, you know, the, the, the free cash flow margin for partners in 25 is, you know, significantly at a, you know, inflection from the prior year. I wanted to ask, was that always anticipated off of that update that you gave, where partners business is gonna reach positive by mid-2024, or is that a change? Then longer term, I mean, based off of these bookings comments and based off of the, the improvement in free cash flow margin, could partners be the higher terminal margin, free cash flow cash flow margin business at a general rate? Yes to both questions. Yes, we in a way, expedited the path to profitability for partners. It used to be 2025, now it's at least 1 year before. I think that this is as a result of all the efficiencies, but also from the current growth that we see within partners. Definitely next year, partners will start to be a free cash flow positive, you know, sooner rather than later. On the other question, the answer is yes. I think that, you know, Nir talk about the compounding effect of partners. Well, the compounding effect is, has a direct contribution to the profitability, because when you get one agency to keep on building more and more and more website, you know, the ARPU is different, obviously, but also the mix of the partners or mix of the, of the, business is different. We see the adoption of more business solution, so the ARPU is much better. I believe that the profitability of partners will be higher than self-creators. Again, I think that once we get, you know, kind of the 50/50 between partners and self-creator is gonna be seen quite easily. Okay, next question will go to Fiona Hynes at Morgan Stanley. Hi, good morning, everybody. This is Fiona, on for Elizabeth Porter. Thank you for taking the question. I wanted to ask on AI and the ability to improve conversion. Thinking back to when you launched Wix ADI, what did you see in terms of customers completing websites and improving conversion from registered users to paying subscribers? How should we think about similarities or differences with the launch of the latest GenAI products? Thank you. Well, I think you're touching the core of the issue, right? I think that historically, what we did at Wix is always reduce the friction when somebody tries to build a website. That was where we started, right? We said, "Well, now everybody can." Then we did something very basic, but slowly we continued to expand our offering to make it that we can reduce the friction for more and more people. The friction could be, you know, not having e-commerce and then making it easy to build an e-commerce site. Another side of it, of course, is to design the website and to write the content, to have the right images, and to know what kind of website you need to build. With ADI, I think we demonstrated a massive improvement in terms of conversion, and... Well, it took us time to optimize it. It's not like in the first day we seen a massive, right. It took us a year and something in order to always get upward. We had a place where we could actually leverage the algorithms and and make things better in a massive way that we couldn't without it. I would say it was very substantial. I do believe that the current technology enabled us to do way more than we did before, right. A few examples would be, of course, making a much more pretty and effective website, so those are very important things. That always translate to conversion in Wix. Understanding your business in a way that we couldn't. In ADI, in ADI, the way we generated text and content for your website was very naive, right. In fact, the algorithm that is behind the transformer and embedding algorithm behind ChatGPT was invented in 2017, right. A year after we released ADI, so obviously was much more naive. But if we can capture the content that you want to have on your website in a much more detailed way, and make sure that it's very easy for you to modify the way the website talk, and the language, and the narrative, then I believe that that would be another massive leap upward in conversion and satisfaction from customers. I'd say that this give us a lot of opportunities. The other side is how we manage the success of your business. Currently, right, we kind of, like, have to wait for you to say, "You know what? I want to optimize my SEO," right? "I wanna do a campaign on Google. I wanna be able to add a few pages in because I see that users are looking." We go to the customer, and we work to the customer, and we present an option, but the customer have to be engaging in order to do that, have to initiate it, and then we try to help the customer do that. With AI, we can actually have AI approach you and say, "Hey, I analyzed your business. Do you know that you really need to do that, or that would be a great idea for your business?" Okay, by doing that, we can actually make a customer website more successful, and of course, increase this business success, but also allow them to use more of the Wix platform. In many ways, also increase our average revenue per subscriber. I think it, it's really, gonna be a win-win situation, I think, in the next 2 years, where we leverage more of those technologies and, and utilize and, and allow our customers and ourselves, because of that, to capture more benefits. I just want to add a word of caution. A lot of these things are new, and exactly like we had happened with ADI, which we really still, you have been optimizing for many years later, and that create a lot of the benefits, it's gonna be the same here. It's gonna take time to find the best way to use such technologies. Oh, it's very helpful. One more, if I could. In the presentation, you noted an opportunity for self-creators to return to double-digit growth. How do you balance risks like a more penetrated market post-COVID and potentially increasing competition against the benefit of an improving macro? Would love to understand more some of the positives and negatives that you're balancing that drives your confidence in returning to that double-digit growth algorithm. Thank you. Hey, Fiona. I, I think you're referring to my comments through the presentation about our, our thoughts about, you know, the future of growth of the self-creators. I, I think, you know, you're asking about the confidence in it. Part of it is, or part of that future growth is, is based on the, I think, the assumption that everyone in this room, and I would assume everyone on this call, has that at some point, the economy will bounce back. Is it gonna be later this year, or next year, or the following? None of us knows. Obviously, but we all think that at some point, that is gonna happen, and that has a direct influence on small businesses. They're very susceptible, susceptible to, to, to the changes in the microeconomy. They're very sensitive. Obviously, when, when we're gonna see that recovery, it's gonna influence all the, the whole of that part of our business. I think that the, the core of our confidence comes from the second part, or, or the second growth pillar that is attached to it, that is the innovation that, that we're, that we're doing, around self-creators. A lot of it is around, around AI, I think Avishai, in, in, in, in his just, just answered that part of the question in, in terms of, relating back to what happened with, with ADI and how we think that can influence on, influence the reduction in friction in creating a, a, a website and, and, and, being more successful, in, in building your business online. I think there's a lot of competition out there, and I think competition is a very healthy thing. It keeps you on your toes. It, it makes sure that you don't, don't fall asleep, that you keep on innovating and trying to improve yourself in order to be the best for your customers. I think we've proved that we've done this on the product side for, for many years now, and we intend to intend to continue doing this. Again, this whole approach around generating the websites with AI is, is, is, is part of it, but we're innovating also in their solutions for commerce and solutions for restaurants, and solutions for, for hotels, and, and, and solutions for people who want to book events or, or sell their time and, and, and scheduling. And I think that that is where our strength comes from, and this is, where we think that, that can be a great contributor to the growth of self-creators going forward. Very helpful. Thank you for the time. Great, thanks. Let's go to Trevor Young at Barclays. Great, thanks. In the prerecorded session, there wasn't a lot of talk about the international side of things. How are you thinking about maybe re-accelerating growth outside of North America, as that's more than a third of the business, and, all three key regions outside of North America are still in single-digit territory? Are there any sort of, like, puts and takes to think about, such as ramping partners internationally? Or, you know, would international, accelerating from here provide some upside to the, the revenue growth that's kind of baked into your guys? Hey, Trevor. I, I, I think, you know, first of all, yes, absolutely, partners are gonna play a big role in it. The launch of Studio is a global launch. It's already translated to languages, which means that all of our- as our launch is first and foremost, is an internal launch to all of our existing partners. Later, sometime in the fall, we're gonna proceed and open it up for mass market. Obviously, that should have a significant and positive impact globally, and as well as outside of those regions that are outside of the U.S. and North America. You do have to remember that generally, especially if you look at the EU, and... Not only the macro headwinds are still, I would say, stronger, or at least I would say that there's better signs of recovery at this stage, in, in the US and North America. That's going to play another role, I think, in, in that kind of, improvement and returning to accelerated growth, in those regions as well. That's helpful. Just as a follow-up on one of the earlier questions, you, you talked about some of the key verticals that you already service. Are there any verticals that you think there's opportunity, anything like on the social side and kind of like individual, you know, creators who make their own content for social platforms, or any other verticals where you see some opportunity going forward? The answer is obviously yes, but obviously we're not gonna disclose which one. For the same reason, but. Fair enough. Thank you. Great. Next question. Let's go to Naved at B. Riley. Yeah. Thank you. Maybe a quick clarification. You guys shared that partner growth was 35%, and partner revenue was up 36%. I'm just trying to figure out the compounding effect, like an existing accounts are going there. If I feel, this seems more linear, so is there something that I'm not looking at right in terms of the math there? Then I have a follow-up question on AI. You are talking about between partner growth and partner revenue growth? Yeah. Okay. Mm. Remember that when, when you get new partners, it takes time until it roll into the revenue. Meaning that you have a partner, you start to play with the platform, you build one website or two websites, right? I think that the compounding effect is something that is happening a few months after you get the partner joined to our platform and start, you know, to build website and so on. By the way, very similar to how GPV, you know, is acting. You get your customer that, you know, start to sell his product, it takes time, and then you get the compounding effect of the GPV. It's obviously very similar to that. When you have a very high growth or hyper-growth business like that, it takes time until you see the differences, but definitely, we are going to see that in the future, the revenue growth is obviously going to be higher than the partner growth because of that compounding effect. Got it. Follow up on AI. If I think about how AI can have an effect on the cost side of things, as well as maybe the revenue opportunity. How should I think about the cost of infrastructure as you kind of deploy more and more AI capabilities? On the monetization side, can you talk about the opportunities to sort of, you know, maybe drive ARPU growth as you build out all these features then? What do you have embedded in your model, 2025 forecast in terms of, you know, being able to monetize model? All right. I think the first part of the question is actually a very important thing, which is you don't get AI for free, right? You pay for it, and it's actually... Some of it can be rather expensive. If you look at it, for example, if we do AI chat agent for support, right? We might be able to have less support agent, but you actually have to pay for GPU time, right? The combination here, and that's the question, is the balance. Obviously, we're gonna have to be smart about it and monitor it, right? We don't wanna have, create an AI agent that is as effective as a human, but costs three times more, right? We wanna... I gotta say that if I look at the trend the last couple of years, obviously the prices are going like that for GPUs usage. From what we can test now, there is a huge gap between the salary to the cost of the computer GPUs and computation. On the other side, when it come to conversion, that's even easier to manage and to understand when you use AI to do site generation or element like that. The cost is probably, is gonna be smaller in most cases, and then it's very easy to measure the effect and the value. I would say that this is gonna be on us, right? We're gonna have to make sure that we are smart about it and don't do projects that gonna cost more than what they generate. The next question you had is about how it's gonna increase the output, I think it's, it's, it's, it's a combination. It's not just one thing. The number one thing, I go back to what Fiona said, is that we wanna make sure that we improve conversion, right? Retention. I think this is where we've proven in the past with ADI, that it can, it can be done. It works well when you do it well. I'm a strong believer that we can do it again now that there are better technologies here of AI, and we can do way more than we did in the past. This is the number one thing. Another thing is that AI, the thing that can help you manage your business, will also allow us to offer you more tools and more elements. We actually believe that we can increase output by allowing you to utilize more of what you can do in Wix today, by being the one who that having Wix create initiative and then guide you for it, instead of you taking the initiative. The last part is that there are gonna be some AI models that we do intend to charge money for, right? I do believe that that is gonna be part of it, and it is still something that we have to test and prove in order to say how big the effect on that is gonna be. You wanna, you wanna mention- Yeah what you modeled? Sure. How you captured it in the long-term model? Yeah. As I mentioned before, we took under the model assumption, what we see right now. In both the term of the cost, the run rate of the cost, and the run rate of the growth. As Avishai just mentioned, I believe that there are two components over here. It's, you know, first of all, the most important word about it is about the ROI, okay? If there will be more cost, we need to make sure that we get a positive return. It can be in the way of more revenue, for example, better conversion, or saving in other places. I didn't take into consideration both. I didn't take into consideration the opportunity, but I also didn't take into consideration the cost of it. I believe that when we talk about positive ROI, it's just going to have a positive impact, on top of the numbers that I took. Yeah, and I, I mean, we have... It's not as if a lot of this is new to us, right? We've been, we've been utilizing AI within Wix.com for many years. We have a very good grasp on this balance that you were talking about, Avishai. Mm-hmm. Yeah. ... and, and how to, you know, manage it in, in the model as well, on the financial side. Absolutely. Absolutely. Okay, great. Let's go to Mark Zgutowicz at Benchmark. Thanks. Hi, guys. Really thoughtful presentation. Thank you for that. Two questions, just relating to top line. I was hoping you could, you could break out just the segment guidance targets between creators and partners. That you, you have partners, just looking at your slide here, partners, free cash flow break even in 2024. Just wanted to understand sort of top-line assumptions to get there. Then, just overall, you know, you mentioned that you can reach your profitability targets under a variety of growth scenarios. It looks like you're using the second half run rate and carrying that through to 2025. I'm just curious, if we see a run rate below that level, what areas would be, sort of, I guess, gain for, for making further OpEx reductions? Thank you. Mark, I will start with the first question. You know, I said that we are using the current run rate of growth. It means that if you want to understand exactly, you know, what will be the split between the revenue, so just take the current run rate of growth of partners and just continue that. I didn't make any changes. It's exactly the same. No, even 1% more, no 1% less. Okay. So this is with regard to that, and again, I think that, you know, based on our assumption, we can always look at what we have right now and then better control it, right? I believe that, you know, from the last few years of experience, I think that that would be the best way to handle it. By the way, it's very important for me to mention, the way that we are running the plan or the budget is very simple. We are looking at current year plus two years, meaning we don't take any, any, any decision today without understanding the impact of it in couple of years from now. Meaning that next year, we are going to do the same, but 2026 will be included as part of the model. We have a very, very good control of what we are doing, in term of, in term of the cost. To your question, if we're gonna see that for some reason, we, you know, the growth is less than what we see right now, the first thing that we need to understand is the reasons. For sure, we are going to align the cost, you know, to meet those growth rate, in order to make sure that we'll get to the target of our profitability. To answer your question, how we're going to align the cost is really very much depends on the reason why we see less growth, and then we are going to react accordingly. Remember that many of our expenses, especially when you plan, you know, this kind of a model, are embedded into the revenue, meaning that there is a direct effect of revenue. If revenue is lower, it means that you have also, by definition, lower expenses. But if it's beyond that or much more than that, we will have to align the cost, and again, the way that we are going to do it is based on the reason why we see less growth. Makes sense. Thanks, bro. Thanks. I think this, this is actually a good transition to a question we got sent in email. I mean, thinking beyond 2025, we, we, we laid out pretty clearly the incremental cash flow margins that we're going to see here- Mm-hmm. -through 2025. How should analysts think about the incremental margins beyond 2025? Yeah. I think that it's also related to to the question about the long term, where I said that it's going to be not before 2028. I believe that everyone should assume that 2025 is not the end target, meaning that 25% of free cash flow is not the end target. We obviously see that it's going to be higher than that, and later on, the target will be set to 35%, for example. Yes, I believe that the leverage that we are seeing right now and will see in the next couple of years will continue. Therefore, I believe that somewhere like, you know, it, it won't be before 2028, but if you take this revenue or the leverage and just continue, you will get to the same-- exactly the same calculation that I'm doing. Yes, in the future, I think that we are going to generate more revenue, most of it going to go down to the bottom line and increase the profitability even further, especially with the partners business. Remember, partners business is going to be more profitable, so when the mix is changing, it will be much easier for us to see this leverage. Great. Let's go to Matt Pfau at William Blair. Hey, great. Thanks for taking my question. Just one for me. Wanted to ask about Wix Studio, and as you make it generally available, curious as to what type of investments that you're going to need from a marketing and support perspective. The reason why I'm asking is because you're releasing a very significant product here, while at the same time, if I look at your expected ramp in the profitability of the partner business, really making significant improvements there. Just trying to understand the relationship between those two dynamics. Sure. Hey, Matt, it's Nir. I... And, and, and Lior can to talk about, you know, budgeting aspects and modeling later on, if needed. Generally, you have to remember from that from our standpoint, everything that we have to do in order to market Studio, are activities we've done in the past. It's also, you have to remember that we are already well known and appreciated in in this community and within this crowd. We have a great a great starting point. The goal, once Studio is out there, and Lior spoke about it in kind of when we're going to be starting the when are we going to start the investment of marketing in, in Studio, obviously only after we release the product, which is in the second half of the year, is to start going and building, building and strengthening that, the Wix Studio brand, to the point where, we can, we can reach the adoption and, and reach the new crowds of, of partners that we want to bring in. From that standpoint, I think we have a very. I cannot go into the details, naturally, but we have a very, very strong and solid plan we've been working on for a while now. We have the resources in place, we have the right people and the right expertise. In terms of the customer care associated with it, that's also something that has been taking into account, both on the cost side, but also in terms of the training, the creation of a community around it, the adoption of more technical solutions for more technical crowd. That's again, something that we're not just starting just now, but we've been working on and adopting over a long period of time. Yeah. I will relate to the modeling part. I think that it's a great question because I think that it will enable you to understand the way that we are, you know, managing our model and plans. We took into consideration millions of millions of dollars in term of marketing for partners, especially around, you know, branding activities. Remember, guys, that I told you that in the second half of the year, we're going to invest more in branding activity for the launch of Studio. Obviously, this is something that will continue. The model, from one hand, taking millions of dollars of investment into the partners business in term of marketing, but on the other end, I didn't take any consideration to any increase in, in revenue as a result of that. I believe that the model is actually taking everything into account. From one, it's taking the, the marketing investment that we need to do, but on the other end, we are not taking the upside as a result of that, and I believe that it will be much better right now when I'm doing the model, to be more conservative around it. Perfect. Thank you. Okay. We'll go to John at Jefferies. Hi, thanks. This is Johnathan Janssen for, for Brent Thill. On, on, on the cost side of things, absolutely great, margin targets. One thing, maybe on the, on the other hand, you know, you're planning not to add much fixed cost at all. You've been very, very restrained on, on headcount, additional headcount, but is there a risk that you maybe stay too lean on cost, and potentially hurt maybe some of the, you know, opportunities that have longer-term paybacks? Wondering how you think about that. So I'll kick it off. I think, you know, I think generally we feel that at the current size and availability of resources we have internally, we are in a very, very good place. In order to achieve our targets and, and, and, and, and, and grow towards, towards both the partner side and the Self-Creator side. Now, I think that naturally, you know, if, if, eventually, as Lior said, he's not counting the upside at this point. If we do see the upside, and that's gonna be also driving a better margin, it will also allow us to increase some of the cost and go after more resources to go after further, further growth opportunities. Our sense is that we first need to prove to ourselves the current investments and the current growth acceleration before we go to that, to that, to that next, that next level. That being said, I think that over the past year, and, and I think we're humble enough to say that, we also saw that there is a lot of good learnings and, and smart decisions to be taught throughout going after more efficiency. I think we proved, we do so in our new marketing strategy, and, and we're very happy with the results. We're also very happy with the fact that in a year in which eventually growth was lower than what we hoped for when we were here in last year's May Analyst Day, we managed to make the adjustments in a way that allowed us to meet the targets of the margin, but also meet the targets in terms of execution, deliver Studio, and deliver the new initiatives, and deliver the AI innovation on the timing that we intended to. John, did you have a follow-up question, or? Yes. Sorry about that. Try to unmute myself. Okay. Couple of, couple on, on partners. One very quick one first. The quick one is, will Wix Studio replace Editor X and Velo? Will you be winding those down? Is Wix Studio kind of the next thing? Then on the partner side, I mean, you've been at it for quite some time. I'm wondering, you know, how things are going in terms of winning over, you know, partners that kind of are married to the WordPress ecosystem or are used to kind of whatever tools that they're using, in terms of the momentum of them switching over to the tools and adapting to the whole Wix.com ecosystem. Just wondering how, how that's changed from, you know, the start to, to now. Thank you. Well, to the first part, I think it's simply a yes. We do see Studio as an extension of Editor X. When we felt that Editor X was built for professional designers, people that are really, really spending a lot of time designing things, and we saw a lot of agencies that have been using that, just growing number, frustrated because it was really aimed for design and not for agencies. We said, "Well, let's improve the UI and make it that agencies can use it in the same ease of use that they want, but have the control and the design." That's the evolution of Editor X into that. I think he asked whether we're gonna replace Editor X and Velo as well. Well, Velo is just part of it, so Velo is not gonna be replaced. But I think the big question here is, will it be a different product line? You're gonna have Editor X, Studio, and Wix, and we're gonna market all three of them, or it gonna be just two? And the answer is just two. We are winning over WordPress. That's the simple reality of that. We showed some, showed some information this time. But every year, we're seeing that the amount of new content that are being created on Wix and compared to WordPress is growing. As far as I remember, if last year was a year where we actually had more new Wix websites built than WordPress, right? This is according to the data that we have and analyze, so I don't wanna commit and be like 100% higher because WordPress does not disclose their number because they're not a company, and they're not public, and they have nothing, that they don't know the numbers. From what we can do when we search and browse different domains and do estimation based on that, that was something that we noticed. I would say that all of the SaaS CMS are gaining over WordPress and taking that, but there are other tools there that, you know, Drupal or hosting companies, growing company solution, that we take market share from much faster. One more question that was submitted over email was about the share repurchase program that we announced, the new commitment. The question is about just the cadence of the repurchases, but maybe since we haven't spoken about it yet, you know, Nir, could you give maybe a little bit of background about, you know, how we came to the share repurchase, you know, authorization that the board gave and, and how we're gonna, you know, plan to execute it? Sure. I, I think, in a very clear manner, looking, having a three year plan out there that calls for a margin, but also for the generation of the, you know, absolute number, in terms of cash flow, both board and management thought that it makes a lot of sense to match it also with kind of the same period, general methodology to how we wanna approach the repurchases. We've done repurchases in the past, and I think, as we gain more maturity in it, we wanted to put something in place that we're gonna create more clarity. We believe that looking at kind of the general different metrics of the company and where we stand in terms of capital, deploying roughly 50% of the cash flow over those, the excess cash flow over those three years is what makes sense. Obviously, the way we're gonna deploy, deploy it is gonna be associated with decisions we're gonna make at the right time and market conditions. That being said, as an Israeli company, we're still bound with approval of the Israeli court system in order to be able to go out and get their approvals so we can exercise the repurchases. Our goal, at least for the time being, will be to try to go for a cadence which is as fast as possible. Okay. Well, with that, I think this wraps up our Analyst Day this year. Thanks, Avishai, Nir, and Lior. I also wanna thank Michal, Gali, and Hila, who contributed to the presentations. I also wanna thank all the other people at Wix.com who helped put together all the presentations, the videos, and, and today as well. Thank you all. And thank you, Joe. Thank you, Joe. Thanks. Thank you, guys. I hope. Thanks, everyone. ... hope everyone has a great day. Cheers, everyone. Bye-bye.