Wix registers first full year net profit, forecasts acceleration in “profitable growth in 2024”
Wix registers first full year net profit, forecasts acceleration in “profitable growth in 2024”
The software company ended 2023 with revenues of $1.56 billion, a 13% growth compared to 2022. GAAP net income amounted to $33.1 million
Wix announced on Wednesday that it ended 2023 on a positive note with a fourth quarter that exceeded forecasts and also predicted that 2024 will be a positive year of growth and improved profitability, especially in the second half of the year.
The company ended 2023 with revenues of $1.56 billion, a 13% growth compared to 2022. The important news is that full year GAAP net income amounted to $33.1 million, marking the first time that the company has registered an annual profit. The company's operations generated an impressive cash flow of $248 million.
During 2023, Wix added 189,000 paying subscribers, so that their number now stands at 6.3 million. The number of registered users climbed 8% to 263 million. Operationally, it still registered a loss of $24 million, but this is a dramatic improvement compared to an operating loss of hundreds of millions of dollars in each of the three years preceding it. The gap between the net profit in 2023 and the operating loss was the result of the income generated by the company from its high cash balances.
According to the latest forecast, in 2024, Wix, which developed a platform for establishing websites and online stores, will reach revenues of $1.73-1.76 billion. The cash flow from operations is expected to reach a fifth of the revenues to the level of $370-400 million.
In the past year, Wix employees in Israel moved into the company’s new headquarters in Gillot after years of being scattered in a number of different buildings in the Tel Aviv port. The company updated that the investment in this project in 2023 amounted to $58 million.
At the quarterly level, Wix revenue grew by 14% to $403.8 million, alongside a net profit of $3 million and an adjusted profit of $1.22 per share. Analysts had expected lower revenue of $402.8 million and a significantly lower adjusted profit of just $0.95 cents.
"We expect to drive accelerating profitable growth in 2024 and see a number of indicators of growth momentum today, including improved visibility from a stable and positively-trending macro environment; continued strong cohort behavior, particularly in our Partners business; and ramping benefits from Studio and the milestone AI initiatives launched in 2023," said Wix CFO Lior Shemesh. "Because of this visibility and confidence, we are reintroducing bookings guidance, which we expect to accelerate to 12-14% y/y growth in 2024 with 15% y/y growth in 2H.”
Shemesh added that Wix will surpass the goals for 2024 that it presented at the analysts' day about six months ago, which will also allow it to advance the goals of the three-year efficiency plan that was presented with the outbreak of the crisis in 2022. Also, Wix is expected to move to an operating profit and not just to a net profit in 2024, following the important news as mentioned, of achieving a net profit for the first time in its history in 2023.
Wix ended the year with a workforce of 5,302 employees, a decrease of 4% compared to the end of 2022. In this context, the company incurred a cost of $6 million in the quarterly report as a result of paying compensation to fired employees and terminating leases at sites that were closed.
