Wix reports record profit but sticks to conservative 2025 forecast
Company's AI rollout expected to boost growth, but impact remains uncertain.
Wix is completing its first full year of operating profitability but does not expect accelerated growth in 2025. The website company’s revenue met its forecast, which it raised multiple times throughout the year, reaching $1.76 billion. This represents a 13% growth rate—modest but, unlike in the past, now profitable.
Wix is increasing the share of its revenue that comes from partners and business customers, a faster-growing segment that also contributes more to the bottom line. The company noted that price increases for its website and online store solutions led to a decline in premium users, with their total number reaching 6.2 million at year-end—72,000 fewer than in 2023.
Wix ended 2024 with a GAAP operating profit of $100 million, compared to an operating loss of $24 million in 2023. Thanks to $1.1 billion in cash balances generating financing income, net income was even higher, reaching $138 million—up from $33 million the previous year. Operating cash flow doubled from 2023, reaching $500 million.
“Not only did we achieve our three-year plan goals a year ahead of schedule, but we also surpassed the ‘Rule of 40’ for the full year, allowing us to now target the ‘Rule of 45’ at the top end of our 2025 outlook,” Wix founder and CEO Avishai Abrahami wrote in a letter to investors. The "Rule of 40" is a widely used profitability metric in the software industry, though few companies manage to meet it. It states that for SaaS (software-as-a-service) companies, the combined growth rate and free cash flow margin should exceed 40%.
Wix finished the fourth quarter with a record $48 million in profit, compared to just $2 million in the same period last year. Quarterly revenue was $460.5 million, reflecting a 14% increase year-over-year.
AI integration and 2025 outlook
What will likely attract the most investor attention is Wix’s 2025 outlook—particularly its approach to AI-driven revenue. This earnings season, AI expectations have played a major role in stock movements. Monday.com, another Israeli software company listed on Wall Street, unveiled a comprehensive AI vision and early customer traction, which sent its stock soaring. Fiverr, another Israeli SaaS company, also published its AI roadmap this week, triggering a post-trading surge in its share price.
Wix acknowledges that AI integration is becoming an important growth driver but has opted not to include AI-related revenue in its full-year forecast. The company is still in the testing and rollout phase for various AI-powered features and expects their impact to become more significant in the second half of the year. As a result, Wix anticipates a faster growth rate toward the end of 2025 but is maintaining a conservative full-year growth forecast of 13%, similar to 2024. This would bring total revenue to approximately $2 billion.
Annual cash flow is projected to grow to around $600 million, and for the first quarter of 2025, Wix expects revenue between $469 million and $473 million. While some investors may be disappointed by Wix’s cautious annual forecast, they have responded positively to the company’s improved profitability. Over the past year, Wix’s stock has surged 80%, bringing its market value to $12 billion.
