Thanks for joining. Most people probably know by now, but Ygal Arounian, I'm on the Citi Internet team. Really excited to have Lior Shemesh, Wix CFO, Nir Zohar, COO, with us to end off the day. You know, hopefully, and, save the best for last.
Well, hopefully everyone can stay awake after such a long day.
Yeah, we keep the room really cold, so people won't fall asleep. Well, thanks for being here with us, guys. So we're coming off a successful Investor Day. You guys raised your long-term margin targets. Again, give some more color on how you'll achieve the Rule of 40. We'll get into the margin side a little bit later. Just start by just talking through some of the top-line drivers.
You know, one thing we didn't get in Investor Day was kind of a specific top-line guidance, but so Nir, maybe starting with you, Lior, if you have anything to add on, you know, why not give that specific guidance, something kind of holding you back? And just talk through how you're seeing those growth drivers.
Sure. I, I think actually maybe it's worth for Lior to kind of explain how he thinks about guidance, and then I can... we will-
Okay.
Zoom out of it and give us the
Yeah.
Great.
Look, obviously, you know, it's hard and even sometimes impossible to provide guidance for three years, and we don't intend to provide guidance for three years. Usually when I provide guidance, I'm looking at, you know, the numbers that we see about the fundamentals, about the KPIs that we see right now, and just based on that, providing the guidance.
I can tell you now, for the three years, in a way, we were conservative. Yes, I mean, we built the model based on the current run rate of the growth that we see in the second quarter, plus the current run rate of expenses.
Meaning without any expansion, even in growth or any other reduction, of course, we are going to get to the minimum of 25% of free cash flow that we mentioned, and obviously to the Rule of 40. But it doesn't mean that this is how we think about the potential of our business. And, and, and, and you can elaborate about some more.
So, I think that's the core of it. You know, as Lior said, you know, no company gives us free guidance, right?
Yeah.
Some companies don't give annual guidance. And I think there are so many factors that can move the growth throughout those years. Put aside the external factors and even the internal factors. We released Studio now. It's we think it's a massive opportunity and already seeing great initial results for it.
But it's going to take time to fully understand how and how big is the impact it is on growth, and then optimize on that impact in growth in order to get more out of it. You know, that optimization throughout three years is going to be massive, because three years a lifetime for a product is a very long time.
So I think naturally, we wanted to create the baseline, which Lior explained, in order to understand how we look at the growth and focus the model on the things that we control, which is the expense side of things. But even there, you know, it represents a size of a company that gives us enough resources to go after all of these things that we believe can push us forward in our strategy to grow in years to come. So I think, you know, the current phase of it gives our...
It is our own commitment to ourselves as a management. It's our own commitment to the board, and obviously, the commitment that we feel that we should share with our shareholders in terms of how—what kind of business we want, want to be running in, in the next few years.
Got it. Okay. One of the frameworks you did give was looking at self-creators and then-
Mm-hmm
... looking at partners. On the self-creator side, you kind of, you know, showed this path to acceleration.
Yep.
Where self-creator has been a little bit depressed since the earlier part of COVID. Talked about partners potentially becoming, you know, equal to or larger than self-creator.
Yeah.
I mean, if you put those two things together, in most people's models, that'll lead to accelerating growth. So maybe just can you help us think through-
Yep
... both of those, individual pieces?
So I think the actual part of acceleration you're already seeing or that is incorporated into the model is not very very high, as Lior explained, and it's based on the things we're already seeing. But if I look forward, on those two segments have still a lot of potential that we believe we can go after.
On the self-creator side, you know, we shared our thoughts about it in the Analyst Day, but also prior to that in Avishai's blog post, one of the things that is sitting at the heart of our AI product suite future releases is the AI site generator.
And we know from our experience, from our expertise in the field, that we, when we release something like that, it can potentially have a big impact on the conversion path of self-creators coming in, having a much easier path to convert and build a website, as well as adopting more functions and more and more services after.
So that's definitely something that we believe can help accelerate growth and will be an engine. The second thing on the partner segment, naturally, the TAM there is still massive. It should be a bigger TAM than the self-creators, which is still a bigger business for us, so-
Right
... that on itself is a multiplier. Studio, which we just released, will have an impact. Okay, we're starting to see that impact. We're seeing very, very positive initial results, both on the qualitative side, the feedback we're getting from the partners and the agencies we're working with now are on the ones that have been on our platform for many years now, and are actually very critical of us, because they've been using the products for a long time, and how they're responding.
But also, in terms of the numbers we're seeing in the adoption numbers, the results are even better than we expected, especially for one month out. So that's another great driver. And lastly, I think we still have a great way to go in terms of international and global expansion.
We are very well geared towards it in terms of, you know, one of the best companies in terms of integration of languages and localization across the globe. And that's another great way to grow the business.
Okay, great. Yeah, all positive things. I wanna—we'll come back and hit on all those. Let me just kind of one more thing on coming out of the Investor Day, and we are on the Rule of 40, where a lot of investors are kind of focused on.
Do you see 40 as a cap, meaning, you know, if it's 10% revenue growth, 30% margins, if it's 15, 25, or, you know, can both go up at the same time, where you're, you know, above Rule of 40, Rule of 50, for example, kind of like closely?
We prefer Rule of 50.
So would most of us.
I believe that this is the flow, meaning that from our point of view, we provided commitment, first of all, to the minimum of 25% of free cash flow. And it was very important, 'cause, you know, many folks have been asking us about question, "Okay, how are you gonna get to the rule of 40?" So we get to the rule of 40 with minimum of 25% of the cash flow. Now, let's assume that the growth is going to be 20%, as Nir mentioned, and we truly believe that we can accelerate the growth. So obviously, the rule of 40 become like the rule of 45.
Right.
So yes, I mean, there is a lot of potential, both from, in terms of the profitability, but also in terms of the growth that we feel very comfortable about.
Okay, great. One of the areas we've seen a lot of margin expansion from has been on the marketing side, and we've seen a lot of efficiencies there.
Yes.
It's been a... Each one of your peers talks about it a little bit differently, but we've seen kind of efficiency in marketing spend across the board. You know, what, what do you see is happening on the marketing side? What, what's happening for you? I know you, you've mentioned multiple times that you put a lot of thought into this. This isn't something that happened overnight, but it feels like a sustainable opportunity.
Well, you wanna take it? I think, and you can compliment if you like, but first of all, you know, we started deploying. The testing happened through, I would say, the summer of last year, but the actual deployment of this new methodology, this new approach, started literally a year ago, in September of last year. So I think that after a year, we feel very comfortable saying:
Yes, it's sustainable, especially since, you know, we're seeing the day-to-day process now, how it's working, and how it's moving us forward. So I absolutely think that it's sustainable. If there's gonna be some massive change in the world that I cannot foresee, now we'll have to react to it.
But at this stage, I think it's very sustainable and it's, you know, guarded, I think, a great leverage for us in terms of the business. I don't know if other companies you're talking about have seen the same extent of it, but it doesn't matter, right? In this case, it's about how we use our marketing dollars in the most smart and effective way.
Okay. You're also gonna ramp marketing spend against the partners. Will that changes some of the dynamics a little bit?
Not really, because it is, you know, it might be a little bit confusing, thinking that, you know, since now we're really Studio and such a big product release, Nir, we're now starting to build this new marketing approach for partners. But that's not the case.
We've been working and advertising towards partners for many years, especially in the last three years, which is also why we have so many partners to begin with now with to test Studio with, as we do right now. Which means that this marketing machine that is aimed towards the partners is already in action. The budget towards what we wanna do with Studio for 2023 is already in place. It's already in the numbers that...
In the guidance that Lior supplied. So from that standpoint, you're not gonna see something that is groundbreaking different anytime soon. There's no reason.
Okay. All right. That, that's helpful. One more on the margins, just on the Investor Day, you guys broke out-
Mm-hmm
... the margins for self-creators or the kind of steps for self-creators versus partners. Partners is still well behind. Can it ramp up to where self-creators is and have kind of similar leverage, similar margins?
Well, I hope so. And let me tell you, first of all, it's a different, it's a different marketing approach. Not necessarily, you know, buying keywords for search, it's rather more engaging with partners. And obviously, you know, the budget is, will be dependent on the success of partners, of Studio.
But you were asking about the margins, no, not about... about the margins or the marketing?
The... Well-
The margin or the marketing?
Yeah, well, the margins for-
Ah, okay
... us, for partners versus self-creators.
Okay, I heard, marketing.
... potentially, the margins for our partners can be much better than self-creators. Remember that it's still early stage, meaning that we are not going to see it by 2025, but certainly later. Because think about the compounding effect of partners. Once we have partners, keep on generating more and more, and creating more and more websites, I don't need to invest marketing money in order to do that, right?
The same goes for the cost of goods sold, 'cause you have, like, more compounding effect of existing partners that keep on building websites, plus you have the new one. So I do believe that long term, the profitability... And by the way, this is also what we mentioned in the Analyst Day.
I believe that long term, the free cash flow or Adjusted EBITDA of partners going to be better than self-creators.
Okay. Excellent, and helps kinda paint that picture a little bit more on the, on the margin expansion. All right, let's move away from margins. But let's stick to the partner topic a little bit. So partners grew 36%.
Mm-hmm
... year over year in 2Q. That was before Studio even launched. You know, you've invested a lot in terms of product here, over the last couple of years.
Mm-hmm.
So maybe just kind of to level set, talk about what Studio is a little bit. You're seeing a ton of strength even before Studio launch. So what, what are the factors that are driving the strength here, you know, in 2Q, before, before Studio launches? And, you know, what are the next steps from here?
Well, I think, first of all, you have to remember that for many years, we've created a suite of very elaborate and sophisticated solutions for agencies and partners that has already been in use and in their hands for a while. And I think that is why they've always loved Wix and Editor X as good solutions in order to build and create projects and build websites for their clients.
And I think that's a big part of why you see that strength. Also, investment, marketing investment over the last few years towards partners is also part of that strength. It's not as if... Again, we're not just starting, we're-
Right
... we're building on good fundamentals on both the marketing, the user base, and the product, in order to release something which is new and we think is gonna take us much, much faster and much, much further.
When you think about Studio from that standpoint, it takes a lot of those functionality, a lot of those capabilities that we already had in the platform and puts them together, but it layers more solutions on top of them, sorry, based on what we've been hearing from our partners.
So for example, if you take Velo and the ability to code into the system, it is under the Studio hood, but we've added the IDE interface on top of it, which solved a lot of the issues that some of the most sophisticated partners and agencies always had.
On the other side of it, one of the key feedbacks we heard about Editor X was that it is very complex, it is very sophisticated, it is great for high-end designers, but the agencies don't need, sometimes they need something more simplified. They want something, a simpler solution that is gonna give them the same values that Editor X had against Wix, the Wix Editor, but in a much easier way.
So we went, and we used a lot of the know-how, a lot of the things we learned in Editor X in order to create that simplicity. So still, the strength of Editor X is embodied into the Studio editor, but now, you know, in some cases, we added the—we added the, we layered the magic.
So you have, you have a, an AI solution that helps you create the responsiveness of behavior in Wix Studio, that in Editor X, you had to do it, you know, manually by yourself, which was much—You had to be much more professional about it. If you still wanna control that, go ahead and control that, but if you don't and you want the magic, we'll also give you the magic.
And around it, I think that one of the key things we learned from our partners is that they are not only building websites, they are running a business. They are running the business and managing projects and have project workflows to cater to the needs of their customers.
So we built a whole new dashboard, a whole new back office, through which the agency can run those different projects and work with their clients. And I think all of that together created something which is like, it's like an operating system for an agency, something that they've never had before.
So corporate can attach that to all the other great values that Wix give them, which is, you know, one closed safe garden to run the, with the websites security-wise, software-wise, it's all, you know, backed up and CDN all across the world and give them a massive value into their hands, which is why we're getting those, those great, great reactions from them now.
Right. Okay. Let's elaborate on the reception so far.
Yeah.
Pretty early, it's still in beta-
Yeah
... right? When does it come out of beta to-
So-
General availability?
Yeah.
Is the adoption coming more from current? Are you, are you-
Yeah
... are already seeing new agencies kind of be interested in the product?
First of all, the way I think about it, we're not in beta, okay? We are in a limited GA, okay? We're
Yeah
... which is because it's important because the beta will imply that you're putting something out there that is not fully ready, that's not fully baked. Now, like any other product... anytime, anywhere, yes, there are going to be more versions, there are going to be more added capabilities over time.
But what we released early August was something that we felt proud and felt comfortable putting in the hands of our partners, our existing partners, who are actually the most important clients we have, right? You couldn't mess it up by giving something which is clunky or which is buggy.
And the goal was to give them something like that, and then we basically went out and said, "Look, if you are our most trusted clients, before we open it up to the world, we want to show you what we've done, 'cause it's based on the feedback we got from you, make sure that we didn't forget anything.
And also help you and teach you how to transition your business from Wix and from Editor X to this, so will make your life easier." So the team has been really literally running around the world in the past month, throwing out these education sessions in cities and capitals around the world where we know they have high concentrations of our partners.
They've been in Bangalore, they've been in Sydney, Australia, they've been in Tokyo, Japan, they are now in New York, they're in London, I think, next week or the week after, and then in Paris. First of all, we want to make sure that we manage to switch them over, and we get the value from them being on the new platform. And that will also hone down the key messages we want to use when we go to the... open the GA to the rest of the world. And that is expected to happen throughout, you know, sometime throughout the fall. So it's getting closer.
Okay, great. Lior, and maybe can you help investors understand how it flows through the model? Is it in your numbers for this year, is it not really much of an impact in 2023 Studio? And then, you know, when Nir's talking about getting people to switch over, what is the upside? Is it higher ARPU? Is it, you know, agencies making more sites? How does it make things better financially?
Everything that Nir just mentioned is, is obviously an upside to the model or to the guidance for this year. Because, you know, when we provide the guidance, it was too early to see the, the results of Studio. So obviously, if Studio is going to perform better, it will be, you know, we'll see that in the numbers.
But eventually, I believe that the, the contribution or number one contribution of Studio is the fact that we are going to get much more premium, much more sites, change the mix of our customers, consuming much more business solution, as we saw in the past, building more complex website, using payments, using Google Ads, using all the tools that we have as a business, as a selling business.
You know, I believe that that will be obviously the direct effect, which will have an impact on the overall growth of partners.
Okay. Share shift. Avishai spent some time with the investor talking about share shift and where you guys are taking-
Mm-hmm
... share from. Can you elaborate on that? I always feel like a scenario where investors maybe misunderstand or underestimate that opportunity of, you know, you're taking share from legacy platforms. You know, it's not just thinking about, like, overall website growth, but replatforming onto Wix, and how you see that opportunity, and all these things help you accelerate that, whether it's AI or Studio.
Absolutely. So I think as you just said, it's a, it's, and again, I think Avishai has a really good presentation there also in terms of the, if you look at the graphs there. But there are two growth paths here that coincide, right? One, the internet as in general, the internet is growing. Yes, we've had some slower years post-COVID.
I think it's starting to normalize again. At some point, we're going to probably get to, I would assume, at some point, to similar growth rates to pre-COVID. Okay? COVID itself wasn't obviously a normally that hopefully will not return, because it means something bad for all of us. And that on its own is a growth that is inherent to all of this sector, right?
As you know, the internet and internet commerce and internet activity goes back to where it was before. Everything gets further elevated. At the same time, and this is a long process, and it's an evolution that we've seen for a long time now. These kind of old legacy systems, these old CMS systems on which people used to build websites are starting to get eroded and to lose share, and they're being replaced by SaaS CMSs, like, such as us, Shopify, Squarespace.
I think there's a whole lot of really great companies that have taken that approach, and I think that they are managing to—we are managing to take share for the very simple matter that it's a much better experience for the customer. Now, granted, if you're, you know, if you're a self-creator, it's much easier, 'cause for a self-creator today to go and try to create something on those legacy systems, it's extremely hard to begin with. If anyone was ever afraid that by introducing a company like ours, we will take away the business of the agencies or the designers, obviously that's not the case.
Because the reason people go to them is not only because it's hard to do that on the legacy systems, it's also because people, many people don't have the time or the capabilities and technical know-how to try to do something like that on their own, and prefer to have somebody to help them in their business. And I think that the legacy systems are very deep. They've always allowed tons of flexibility and capabilities to the agencies, which is why they like them so much.
They always had a lot of downside in terms of security and issues with the fact that you have to do the web hosting on your own, you have to take care of the redundancy and updating software, et cetera, et cetera, over time. The balance between, you know, as long as the flexibility was so high, the downside was something you were willing to live with.
But now when something like us comes from the outside and we say, "You know what? We eliminate this completely. You're not gonna have all these problems, and we're gonna..." You know, at the beginning it was slowly, but now I think we're accelerating, give you basically pretty much all of that flexibility you get here, then it becomes a no-brainer to switch over.
And I think that's where. That's a big thing what we're bringing with Studio, is the ability to go after that. Say to you, "We'll give you ease of use and simplicity in one case, but also, you want to add your own React component from the internet? Bring it on.
You want to edit your CSS? Bring it on." You decide what's the level of complexity you want to deal with and what's your level of know-how, and we'll give you. We'll allow you the solution there, the solution there. And I think that is what will help us go much further after that market share, which is still most of the internet.
Right. Got it, okay. That's helpful. Another topic comes up a lot is just macro. You know, listening to you guys and your peers, you've maybe been a little bit more conservative. Your view on the macro has been certainly more cautious. I don't know. Can you talk about why?
Sure.
Yeah, I'm sure the macro is similar for everybody, and it's not worse for you guys, but you guys have sounded more cautious on that.
I think
I, I don't think, you know, it's, any different from, you know, any, any other company. You know, it's, it's really depends on the nature of the company, on the behavior of the customers, but it's, you know, very much similar.
You know, if you ask about the macro, yeah, we saw some, you know, a modest improvement. It's not big. There is much more room for improvement in term of the macro. I mean, take, for example, the, GPV, okay? Which is kind of, really attached one to one to the macro, you know, environment. We saw, improvement in GPV, but still it's not, it's not huge.
I believe that, you know, for example, when interest rates going to go down, we see a major increase in GPV, you know, from the obvious reason: people are going to spend more money. So yes, we saw some improvement, very similar to many other companies, but again, it was not huge.
But I want to say something about this, 'cause at the end of the day, you're right. We're talking about in one way, and you know, another management team talking about a little bit differently, more optimistic, less optimistic.
Right.
And none of us are, I don't know, World Bank executives that really are the ones to speak to it. But I think if you put the words aside for a minute, a moment, and just look at the numbers. If you look at this sector, almost everyone is having very similar growth rates on revenue, very similar growth rates on GPV, which means that probably, essentially, we're all saying the same thing, we're just phrasing it in a different manner.
Okay. That makes a lot of sense. Just maybe coming back to international, you know, 'cause, you know, you mentioned as a big opportunity, you're positioned well. You guys break out the international growth, and it's been, let's just say, weaker than what we've seen in the U.S.
Yeah.
So how do we bridge that gap? What, what are the factors, and is it just catching up?
So, you know, I think it's international is like in the U.S., international is one thing, but in most places, there are countries out there, right?
Yeah. Sure.
And I think each are having different effects or things that affect them. Even if you look at Europe, it's not really one big chunk of an economy, but there's -
Right
... there's difference between between some territories there. I think it's a little bit of a lagging effect. Like, if you ask us, what is our... Are we optimistic about recovery in the rest of the world, Europe, Asia, et cetera? The answer is yes, okay?
We do believe so. We've seen some of it starting to happen, and the way we perceive it in the longer term, international remains a very big potential because, you know, The U.S. is a very mature market. Some parts of Europe are very mature markets, but a lot of other areas in the world are still not very mature, but they are improving all the time.
They have more and more middle class, and middle class means more and more small businesses. Internet penetration gets much better. Commerce penetration gets much better. Solutions for payments, which is a huge thing outside of the U.S., is getting better all the time.
So I think that from that standpoint, if you're a company that is well aware of that and is on the ground, you know, seeing the changes happening and incorporating whatever is being solved into your offering so you can increase your reach, I think that's a great opportunity.
Okay, you mentioned AI and the site generator been a big focus within your space. You guys are well aware the past couple of months. There's a couple ways to just think about it, but maybe on the AI and what you guys are providing and what you're seeing, are you seeing anything tangible in terms of conversion or, you know, share gain? And then, you know, on the site builder product, like, when does that come out or what can you share more about that? 'Cause that seems-
Right
... probably the biggest of your Gen AI products.
Yeah. Well, of course, I cannot see it before I release it and start putting people on it to use it and see what's the effect. If I had to guess or hope or give you my theory around it, then my theory, also based on what I've seen with ADI when we released it, you know, seven years ago, that it should have an impact. Because at the end of the day, what AI does, you know, it's a the tech stack is fantastic, and you can create so many different things, and for us, it's such a big opportunity.
But for the end user, at the end of the day, what the AI and the chat experiences, the Gen AI experience there does, is either it simplifies something, or it just helps them understand either find things in an easier manner, or tell them what they need to find in a very clear manner, and hopefully that's all at the same place. I think that in a process that is in theory starts very easy, but then there's so much complexity in it, which is creating a full-blown website that is descriptive of your business.
It's descriptive of your—it graphically incorporates your images, it's descriptive of your opening hours, of your location, it is transactional in many ways, it allows you to communicate with your customers. It's a heavy lifting that we're trying to simplify.
And I think having another layer on top of it that is saying, "You know, here's what you need to know. Here's the next question. Here's something that you might want to consider changing." And this is before I'm adding on other AI capabilities that will help you run the business. Okay, tell you, you know, you should—you know, you're out of stock, or this is your best seller, maybe you wanna put—make sure that you have higher stock of it, so it doesn't run out of stock.
There's a holiday coming up, and it's a good time to maybe do a sale. Even before that, just the creation process is something where this kind of behavior of the AI can be very significant for the end user in terms of getting them to where they want to get.
So from my standpoint, I do believe it can have a very interesting, a very, very positive impact. I believe that we'll be able to introduce this, this already this year, so that's at least our goal. And it can definitely be a potential upside for us in 2024 and beyond.
Okay. Is that idea for AI site generator to build, you give a few prompts, and it builds the whole thing, top to bottom?
I think that it... Again, theoretically, yes. Practically, I think what we've seen in many years of helping people build websites, that after they get the first version, they start thinking about what else they want.
Right.
I think there's gonna be more prompts. The idea is to give you a very easy way to get you to be very happy.
Okay.
If you want to prompt it 100x , be my guest. If you think you can get to it after five, if you're happy, I'm happy.
Okay. And you kinda hit on this, but one of the areas of concern from investors was, and it's twofold: it's one that, you know, some start-up kind of builds this AI prompt generator to build a website-
Mm.
and you've seen examples of it, and I've seen examples
Yeah
... and build you a really basic website really quickly. So that's kind of, you're addressing that. And then, the other concern is, that we've heard from investors, is that it'll come from the other side, so, you know, a big kind of AI, company or that's investing a lot in AI will can, you know, tack on this product, so like Microsoft, for example. Do you see either of those as a risk?
I think risk always exists, okay? And I think that if you're trying to run a company and you resist risk, then you're hitting your head against a wall. But I think that there are ways to mitigate this risk. One of them is to go to market quickly with a great product.
And I think that going to market quickly with a great product, we have the benefits of, one, understanding what a great product really should be about. Because if you're gonna start, you decide tomorrow you wanna compete with me, and you wanna quickly create something that's gonna create very simple websites very fast, go for it. One, I know for a fact that clients, the users, they want much more.
So you won't get very far with creating something that is very simple because the website they want is not simple. They want something that has complexity to it and has software behind it, okay? They want to schedule, you know, meetings for their business, and they want... if there's a cancellation, it will be an easy way to cancel, and they want to, for you to be able to pay in advance or pay after or share the pay for it because it's a class, and monitor how many people in their class are coming on a regular basis and who is not coming and missing payments. It—this is not something you do like this, this is software. You have to build it, okay? And this is one example, there are many.
So I think that we are pretty much the best-geared company to introduce this, and we also have a brand to get the traffic to it. Even if you had an amazing solution, now what? How will you get the customers? Who will know about you? Why?
And I think that from the standpoint of a company like Microsoft or one of the big other players, there's still a massive know-how that needs to be done, and they need to do this effort. They can. I don't see why they would, 'cause it's not their core business. That's a very big divergence. But the only best solution I have to it is to be out with a great product in the market as soon as I can.
Got it. It's a good time to see if there's any questions from the audience. Okay, I'll keep going if anyone thinks of one, raise your hand. Lior, been talking a lot about agencies, understandably, so a little bit less about your B2B partnerships. Maybe give us a little bit of an update of how things are going there and how you're viewing that channel.
So, first of all, B2B partnerships are part of partners. Yes, we see most of the opportunity actually coming from agencies. If you ask me about the main growth driver or what is kind of really, really exciting, so obviously, you know, it's agency because the market is huge over there.
I mean, think about eight out of 10 people, you know, look going to an agency or to someone or to a pro to build a website for them. It doesn't mean that we don't like or we don't excited about the B2B partnerships. I mean, we signed, you know, the deal with VistaPrint going very well, with LegalZoom going well, and we have obviously, you know, more partnerships that we've signed, and we are keep on seeing that.
By the way, we started to see tens of thousands of premium subscriptions converting from the older VistaPrint platform to our platform. So it's happening, and we are getting like, you know, millions of dollars of
revenue. And I believe that we are going to see more and more partnerships. Remember that the brand of Wix is super strong, and we see more and more, you know, companies are providing online services that would like to use the Wix brand for their customers because they know that it's gonna help them. So for sure there are going to be more deals, but again, if I need to compare it, you know, compare to the agency in terms of the opportunity, so obviously, you know, Agency Studio with agencies provide us with a much larger opportunity.
This is why we are talking about it, because we want to share it, you know, with our investors, as we believe that it's something that it's really important.
Okay. So two more. I'll just, you know, you talked about kinda growth getting back to pre-COVID-
Mm-hmm
... normalized levels. Today, most of your growth is coming from ARPS. You know, can you talk to kind of where you are in that path and how you can continue that strength? You know, Studio sounds like a big part of that, the take rates.
Mm-hmm.
You know, what's the path on ARPS growth from here?
So, well, I believe that it's a combination. I believe that we will see a growth in terms of number of sites built on Wix, you know, primarily from Studio. You know, I met two days ago with one of our partners. He already built about almost 1,000 websites on Wix in a very short period of time. Some of the customers generating about $1 million of GPV on a yearly basis, and he's keep on building websites.
I mean, think about it. But it's not just about adding more websites and obviously getting more net premiums, but also changing the mix of our customers. Those people are consuming more and more business solutions. They use payments, they use, you know, Google Ads, automation, and so on.
I believe that this is something that we will definitely continue to see.
Okay. Then we'll just end off on just capital allocation, targeted 50% of free cash flow. How do you think about buybacks and, or 50% of free cash flow on buybacks? How do you think about versus in investing in other forms?
Yeah. So we mentioned that we are going to use 50% of our free cash flow generation in order to buyback. In the end of the day, it's about adding more value to our shareholders. Okay, and the ways to do it is actually two.
First, is controlling the share count, and this is something that we are doing. It's not just through buyback, through the fact that we are getting much more efficient in terms of head count and so on. The other way is to increase profitability. You know, one of the example, we said that we're going to move to a GAAP profitability in 2025, but it has also a direct impact on our ability to generate more free cash flow.
So the result of it is getting, for example, of where we are today, to about $2 of free cash flow per share, to $7.5 free cash flow per share just by 2025. I believe that it's a great way, including the buyback, to show that we can increase value to our shareholders, and this is exactly what we intend to do.
Also, we have to remember, for us, we have extremely high confidence that, you know, by the end of 2025, we'll generate another $1 billion of cash flow, so-
Mm-hmm
... just makes sense-
Right
... that it will deploy at least, you know, roughly half of it, towards that.
Great. Great, thanks, guys. Appreciate it.
Thank you, everyone.
That's the end of our day. Thanks, everyone, for joining.
Thank you.
Thank you.