Wix Investment Thesis

Wix.com Ltd., together with its subsidiaries, develops and markets a cloud-based platform that enables anyone to create a website or web application in North America, Europe, Latin America, Asia, and internationally. The company offers Wix Editor, a drag-and-drop visual development and website editing environment platform; Wix ADI that enables users to create a website for their specific needs; and Corvid by Wix to create websites and web applications. It also provides Ascend by Wix, which offers its users access to a suite of approximately 20 products or features enabling them to connect with their customers, automate their work, and grow their business; Wix Logo Maker that allows users to generate a logo using artificial intelligence; Wix Answers, a support infrastructure enabling its users to help their users across various channels; and Wix Payments, a payment platform, which helps its users receive payments from their users through their Wix Website. In addition, the company offers various vertical-specific applications that business owners use to operate various aspects of their business online. Further, it provides a range of complementary services, including App Market that offers its registered users the ability to install and uninstall a range of free and paid web applications; Wix Arena, an online marketplace that brings users seeking help in creating and managing a website, together with Web experts; and Wix App, a native mobile application, which enables users to manage their Websites and Wix operating systems. As of December 31, 2021, the company had approximately 222 million registered users and 6 million premium subscriptions. The company was formerly known as Wixpress Ltd. Wix.com Ltd. was incorporated in 2006 and is headquartered in Tel Aviv, Israel.

Wix.com (WIX): The AI-Powered Web Operating System

1. Executive Summary

Wix has successfully transitioned from a "do-it-yourself" website builder for amateurs to a comprehensive comprehensive development platform ("Wix Studio") for agencies and professionals. This shift, combined with aggressive AI integration, is driving a permanent expansion in Free Cash Flow (FCF) margins.

Key Thesis Points

Agency Paradigm Shift: The launch of Wix Studio specifically targets design agencies, unlocking a "B2B2C" distribution channel that lowers churn and increases basket size.
AI Monetization: Wix's "AI Site Generator" is not just a gimmick; it reduces time-to-value for users, increasing conversion rates from free to paid subscriptions.
Profitability Pivot: Management has decisively pivoted from "growth at all costs" to "profitable growth," committing to the "Rule of 40" with rapidly expanding FCF margins.

2. Business Overview

Wix provides a cloud-based web development platform.

Creative Subscriptions: Recurring revenue from hosting, domain registration, and platform access.
Business Solutions: Payments (Wix Payments), eCommerce add-ons, email marketing, and scheduling tools.
The Moat: The Velo coding platform allows developers to inject custom JS/Database logic, making Wix websites significantly stickier and more capable than generic Squarespace sites.

3. Financial Analysis

(See Financials Tab for live data)

FCF Conversion: Wix has demonstrated an impressive ability to convert Adjusted EBITDA into Free Cash Flow.

Wix Investment Thesis

Wix.com (WIX): The AI-Powered Web Operating System

1. Executive Summary

Key Thesis Points

2. Business Overview

3. Financial Analysis

4. Valuation

5. Risks

WIX Valuation Model

WIX report

WIX idea

WIX report