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Wix Reports Outstanding Second Quarter 2020 Results

2020-08-06 01:00 ET - News Release

- Momentum across the platform led to a record breaking quarter
-- Added over 9.3 million registered users in Q2, an increase of 64% y/y
-- Revenue of $236.1 million, up 27% y/y; 28% y/y on a y/y constant currency basis
-- Collections of $265.9 million, up 33% y/y; 35% y/y on a y/y constant currency basis
-- Creative Subscriptions ARR increased 22% y/y to $790.9 million as of Q2
-- Net subscriptions additions of 346,000 in Q2, bringing total premium subscriptions to over 5 million; total net additions in 1H 2020 nearly as much as all of 2019
- July 2020 results show strong growth continuing in Q3
- Responding swiftly to opportunity with increasing marketing investment as the need for online creation and commerce rapidly grows
-- Investing capital into growth demonstrated by future collections of the Q2 user cohort over the next 8 years expected to be approximately 90% higher than the prior year's cohort
- Continued execution with significant product launches: expanded eCommerce capabilities and Editor X public release delivered on time to further help users create and grow online
- Initiating Q3 outlook for revenue and collections, reflecting sustained momentum -- expecting revenue growth of 26-27% y/y and collections growth of 31-34% y/y in Q3

NEW YORK, Aug. 6, 2020 /PRNewswire/ -- Wix.com Ltd. (Nasdaq: WIX) today reported strong financial results for the second quarter ended June 30, 2020, exceeding the high end of its guidance ranges for both revenue and collections. In addition, the Company provided its initial outlook for the third quarter of 2020.

"The trends that began in late March continued throughout the second quarter, driving record-setting results," said Avishai Abrahami, Co-founder and CEO of Wix. "The need for business owners to move online quickly, communicate with customers, and deliver goods and services has never been more imminent, and the Wix platform continues to provide millions of users with the ability to thrive during these unprecedented times. Our focus remains on the success of our users, and we continue to deliver innovative products and technology, marked this quarter by the public launch of Editor X and our expanded eCommerce offering."

Nir Zohar, President and COO of Wix added, "Throughout the second quarter, we continued to experience positive trends as a result of continued economic disruption globally. Our results in July tell us that these trends are continuing, potentially indicating a new baseline of growth for our business. We will continue to support our users in their needs so they can be successful throughout the ongoing disruptions to their lives and businesses."

Lior Shemesh, CFO of Wix said, "Our business has seen an immense uplift in demand in recent months, driven by the rapidly increasing importance of having an online presence. We added a record 9.3 million users and 346,000 net premium subscriptions in the second quarter, reflecting this strong demand and our ability to meet the needs of our users. We are responding to this continued heightened demand by increasing our investment in marketing, which based on our historical data, will drive continued collections and revenue growth in the near future."

Q2 2020 Financial Results

  • Total revenue in the second quarter of 2020 was $236.1 million, compared to $185.4 million in the second quarter of 2019, an increase of 27% y/y
    • On a y/y constant currency basis, Q2 revenue would have been $237.9 million, up 28% y/y
    • Creative Subscriptions revenue in the second quarter of 2020 was $190.2 million, compared to $157.0 million in the second quarter of 2019, an increase of 21% y/y
    • Business Solutions revenue in the second quarter of 2020 was $45.9 million, compared to $28.4 million in the second quarter of 2019, an increase of 62% y/y
  • Creative Subscriptions ARR was $790.9 million in the second quarter of 2020, compared to $648.2 million in the second quarter of 2019, an increase of 22% y/y
  • Total collections in the second quarter of 2020 were $265.9 million, compared to $199.6 million in the second quarter of 2019, an increase of 33% y/y
    • On a y/y constant currency basis, Q2 collections would have been $269.8 million, up 35% y/y
    • Creative Subscriptions collections in the second quarter of 2020 were $217.7 million, compared to $170.5 million in the second quarter of 2019, an increase of 28% y/y
    • Business Solutions collections in the second quarter of 2020 was $48.2 million, compared to $29.1 million in the second quarter of 2019, an increase of 66% y/y
  • Our Q2 user cohort generated $10 million in revenue and $38 million in collections in Q2, which are 66% higher than the year ago cohort. Users purchased Business and eCommerce subscription packages and annual and multi-year packages at a higher frequency
  • Total gross margin on a GAAP basis in the second quarter of 2020 was 70%, compared to 75% in the second quarter of 2019. Total GAAP gross margin declined y/y due to incremental investments in Customer Care and sequentially due to the faster revenue growth of the Business Solutions segment 
    • Creative Subscriptions gross margin on a GAAP basis was 80%, compared to 81% in the second quarter of 2019. The y/y decline was related to the investment in expanding our Customer Care organization
    • Business Solutions gross margin on a GAAP basis was 30% compared to 39% in the second quarter of 2019. The decline was related primarily to the growth of Wix Payments and the expansion of Customer Care
  • Total non-GAAP gross margin in the second quarter of 2020, calculated as non-GAAP gross profit as a percent of revenue, was 71%, compared to 76% in the second quarter of 2019. Total non-GAAP gross margin declined y/y due to incremental investments in Customer Care and sequentially due to the faster revenue growth of the Business Solutions segment
    • Creative Subscriptions gross margin on a non-GAAP basis was 81%, compared to 82% in the second quarter of 2019. The y/y decline was related to the investment in expanding our Customer Care organization
    • Business Solutions gross margin on a non-GAAP basis was 32%, compared to 40% in the second quarter of 2019. The decline was related primarily to the growth of Wix Payments and the expansion of Customer Care
  • GAAP net loss in the second quarter of 2020 was $(57.7) million, or $(1.06) per share, compared to a net loss of $(16.7) million, or $(0.33) per share, for the second quarter of 2019
  • Non-GAAP net loss in the second quarter of 2020 was $(14.2) million, or $(0.26) per share, compared to non-GAAP net income of $17.0 million, or $0.34 per share for the second quarter of 2019
  • Net cash provided by operating activities in the second quarter of 2020 was $50.0 million, while capital expenditures totaled $3.3 million, leading to free cash flow of $46.7 million, compared to $30.8 million of free cash flow in the second quarter of 2019, a 52% year-over-year increase
    • Excluding the capex investment associated with our new headquarters office build out, free cash flow would have been $47.1 million, up 53% y/y
  • Added 346,000 net premium subscriptions in the second quarter of 2020 to reach 5.0 million as of June 30, 2020, a 17% increase over the total number of premium subscriptions at the end of the second quarter of 2019
  • Added 9.3 million registered users in the second quarter of 2020. Registered users as of June 30, 2020 were 182 million, representing a 18% increase compared to the end of the second quarter of 2019

Recent Business Highlights

  • Launched extended eCommerce solution, offering merchants access to advanced online business tools, such as dropshipping, automated sales tax calculations, streamlined order and fulfillment, and integrated sales channels, including social media and marketplaces
  • Announced the official launch of a new brand and innovative website creation platform, Editor X. Previously available in a closed beta program and now open to the public, Editor X caters to web designers and agencies who are looking for advanced design capabilities
  • Launched eCommerce solution for U.S. based merchants selling hemp-derived cannabidiol (CBD) products online, enabling these merchants to create an eCommerce website, process payments online, manage and ship inventory and grow their CBD businesses where government and state regulations permit
  • Expanded Customer Care team to a new office in Denver, Colorado to bolster existing efforts to provide best-in-class service to millions of users
  • Conducted the third annual Wix Playground Academy, a three month intensive web design program taught by Wix professionals and award-winning designers, in a completely online format for the first time. The students participated in the Social Good Project, building websites for 14 non-profits

Financial Outlook

Our outlook for Q3 reflects continued momentum of new registered users as well as the growth in monetization of our user cohorts. We believe these behaviors will drive y/y collections growth above 31% in Q3.

During Q2, we increased advertising investment by approximately 90% y/y, and we acquired the largest user cohort in our history, which we expect will return future collections that are approximately 90% higher than the previous year's Q2 cohort. This return supports our decision to be more aggressive with our marketing investment. We plan to continue the increased investment in advertising as long as positive returns continue.

Our Marketing team responded to the surge in demand quickly and aggressively, a testament to the strength of our team. We believe this level investment will drive higher revenue and collections over the coming years and will expand profitability and free cash flow over time as well.

We are introducing Q3 guidance as follows:


Q3 2020 Outlook


Y/Y growth

Revenue

$247 - 250 million


26 - 27%

Collections

$270 - 275 million


31 - 34%

Free Cash Flow

$15 - 17 million


(42) - (49)%

Free Cash Flow (excluding ~$1 million in

capex for future Wix HQ office build out)

$16 - 18 million


(38) - (45)%

This guidance assumes FX rates as of today. We continue to experience trends that are tailwinds to our top line growth. However, given the uncertainty related to COVID-19 and macroeconomic conditions, it is difficult to predict how long and to what degree these trends will remain; therefore, we are only providing guidance for the third quarter at this time.

Conference Call and Webcast Information

Wix will host a conference call at 8:30 a.m. ET on Thursday, August 6, 2020 to answer questions about the financial and operational performance of the business for the second quarter ended June 30, 2020. The conference call will include a brief statement by management and will focus on answering questions about our results during the quarter. To enhance the Q&A portion of this call, the Company has posted a shareholder update and supporting slides to its Investor Relations website at https://investors.wix.com/. These materials provide shareholders and analysts with additional detail for analyzing results in advance of the quarterly conference call.

To participate on the live call, analysts and investors should dial +1-888-771-4371 (US/ Canada) or +1-847-585-4405 (US Toll) at least ten minutes prior to the start time of the call. A telephonic replay of the call will be available through August 13, 2020 at 11:59 p.m. ET at https://onlinexperiences.com/Launch/QReg/ShowUUID=D0DBA6CF-E305-452B-976E-19713D114599&LangLocaleID=1033 with passcode 49852245.

Wix will also offer a live and archived webcast of the conference call, accessible from the "Investor Relations" section of the Company's website at https://investors.wix.com/.

About Wix.com Ltd.

Learn more: Wix.com, in our Press Room and on our Investor Relations site

Visit us: on our blog, Facebook, Twitter, Instagram, LinkedIn and Pinterest 

Download: Wix App is available for free on Google Play and in the App Store

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S.  GAAP,  Wix  uses  the  following  non-GAAP  financial   measures:   collections,   cumulative   cohort collections, collections  on  a  constant  currency  basis,  revenue  on  a  constant  currency  basis,  non-GAAP  gross  margin,  non-GAAP  operating  income (loss),  non-GAAP  net   income (loss),  non-GAAP  net  income (loss)  per  share,  free  cash  flow, free cash flow, as adjusted, free cash flow margins, non-GAAP R&D expenses, non-GAAP S&M expenses, non-GAAP G&A expenses, non-GAAP operating expenses, non-GAAP cost of revenue expense, non-GAAP tax expense (collectively the "Non-GAAP financial measures"). Measures presented on a constant currency or FX neutral basis have been adjusted to exclude the effect of y/y changes in foreign currency exchange rate fluctuations. Collections represent  the  total  cash  collected  by  us  from our customers in a given period and is calculated by adding the change in deferred revenues for a particular period to revenues for the same period.  Non-GAAP  gross  margin  represents gross profit calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related expenses and amortization, divided  by  revenue.  Non-GAAP operating income (loss) represents operating income (loss) calculated in accordance with GAAP as adjusted for the impact of  share-based  compensation  expense,  amortization,  acquisition-related  expenses  and  sales tax expense  accrual. Non-GAAP  net  income (loss) represents  net  loss  calculated  in  accordance  with  GAAP as adjusted for the impact of share-based compensation expense, amortization, sales tax expense accrual, amortization of  debt  discount  and  debt  issuance  costs  and  acquisition-related  expenses  and non-operating foreign exchange expenses (income). Non-GAAP net income (loss) per share represents non-GAAP net income (loss) divided by the weighted average number of shares used in computing GAAP loss per share. Free cash flow represents net cash provided by (used in) operating activities less capital expenditures. Free cash flow, as adjusted, represents free cash flow further adjusted to exclude capital expenditures associated with our new headquarters. Free cash flow margins represent free cash flow divided by revenue. Non-GAAP cost of revenue represents cost of revenue calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related expenses and amortization. Non-GAAP R&D expenses represent R&D expenses calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related expenses and amortization. Non-GAAP S&M expenses represent S&M expenses calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related expenses and amortization. Non-GAAP G&A expenses represent G&A expenses calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related expenses and amortization. Non-GAAP operating expenses represent operating expenses calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related expenses and amortization.

The presentation of this financial  information  is  not  intended  to  be considered in isolation or as a substitute for, or superior to, the financial information  prepared  and  presented  in  accordance  with  GAAP.  The  Company uses these non-GAAP financial measures for financial and operational decision  making  and  as  a means to  evaluate  period-to-period  comparisons.  The  Company  believes  that  these  measures  provide  useful information about operating results, enhance  the overall understanding of past financial performance  and  future  prospects,  and  allow  for  greater  transparency with respect to key metrics used by management in its financial and operational decision making.

For more information on the  non-GAAP  financial  measures,  please  see  the reconciliation tables provided below. The accompanying tables have more details on the GAAP financial measures  that  are  most  directly  comparable  to  non-GAAP  financial  measures  and  the  related reconciliations between these financial measures. The Company is unable to provide reconciliations of free cash flow, free cash flow, as adjusted, cumulative cohort collections, non-GAAP gross margin, and non-GAAP tax expense to their most directly comparable GAAP financial measures on a forward-looking basis without unreasonable effort because items that impact those GAAP financial measures are out of the Company's control and/or cannot be reasonably predicted.  Such information may have a significant, and potentially unpredictable, impact on our future financial results.

Forward-Looking Statements

This document contains forward-looking statements, within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements may include projections regarding our future performance, including, but not limited to revenue, collections and free cash flow, and may be identified by words like "anticipate," "assume," "believe," "aim," "forecast," "indication," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "outlook," "future," "will," "seek" and similar terms or phrases. The forward-looking statements contained in this document, including the full year guidance, are based on management's current expectations, which are subject to uncertainty, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Important factors that could cause our actual results to differ materially from those indicated in the forward-looking statements include, among others, our ability to grow our user base and premium subscriptions, including through our Wix Partner Program; uncertainty surrounding the duration and severity of COVID-19 and its effects on our business, including changes in consumer dynamics shifting to online and increased GMV on our platform; our ability to create new and higher monetization opportunities from our premium subscriptions; our ability to enter into new markets, and attract new customer segments, and our ability to successfully enter into partnership agreements; our ability to maintain and enhance our brand and reputation; our prediction of the future collections generated by our user cohorts; our share repurchases made pursuant to our share repurchase plan; our ability to manage the growth of our infrastructure effectively; our ability to effectively execute our initiatives to scale and improve our user support function, including through the recent expansion of our Customer Solutions organization by engaging additional agents around the world to provide 24/7 support in nine different languages; the success of our sales efforts; customer acceptance and satisfaction of new products and other challenges inherent in new product development; changes to technologies used in our solutions; or changes in global, national, regional or local economic, business, competitive, market, regulatory and other factors discussed under the heading "Risk Factors" in the Company's 2019 annual report on Form 20-F filed with the Securities and Exchange Commission on April 2, 2020. Any forward-looking statement made by us in this press release speaks only as of the date hereof. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

Investor Relations:
Maggie O'Donnell
ir@wix.com
914-267-7390

Media Relations:
pr@wix.com

Wix.com Ltd.

CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP

(In thousands, except loss per share data)


















Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Revenue








Creative Subscriptions

$     157,012


$     190,169


$     308,376


$     366,715

Business Solutions

28,407


45,890


51,333


85,331


185,419


236,059


359,709


452,046









Cost of Revenue








Creative Subscriptions

29,296


38,510


55,943


73,900

Business Solutions

17,366


31,972


30,434


58,652


46,662


70,482


86,377


132,552









Gross Profit

138,757


165,577


273,332


319,494









Operating expenses:








Research and development

61,486


75,464


119,669


146,180

Selling and marketing

71,329


119,333


157,047


215,489

General and administrative

20,103


24,531


38,569


49,967

Total operating expenses

152,918


219,328


315,285


411,636

Operating loss

(14,161)


(53,751)


(41,953)


(92,142)

Financial expenses, net

(580)


(3,339)


(2,310)


(2,194)

Other income (expenses)

8


28


32


59

Loss before taxes on income

(14,733)


(57,062)


(44,231)


(94,277)

Taxes on income

2,001


674


3,243


2,612

Net loss

$     (16,734)


$     (57,736)


$     (47,474)


$     (96,889)









Basic and diluted net loss per share 

$          (0.33)


$          (1.06)


$          (0.95)


$          (1.82)

Basic and diluted weighted-average shares used to compute net loss per share 

50,273,017


54,695,477


49,917,692


53,266,895

 

Wix.com Ltd.

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)






Period ended


December 31,


June 30,


2019


2020

Assets

(audited)


(unaudited)

Current Assets:




  Cash and cash equivalents

$            268,103


$        173,950

  Short term deposits

294,096


406,033

  Restricted cash and deposit

1,149


925

  Marketable securities

164,301


174,624

  Trade receivables 

16,987


18,830

  Prepaid expenses and other current assets

19,211


49,888

 Total current assets

763,847


824,250





Long Term Assets:




  Property and equipment, net

31,706


32,926

  Marketable securities

177,298


245,211

  Prepaid expenses and other long-term assets 

9,926


13,243

  Intangible assets and goodwill, net

37,641


44,509

  Operating lease assets

79,249


81,112

 Total long-term assets

335,820


417,001





 Total assets

$         1,099,667


$    1,241,251





Liabilities and Shareholder's Equity




Current Liabilities:




  Trade payables

$               37,687


$          73,059

  Employees and payroll accruals

41,938


66,306

  Deferred revenues

289,148


344,515

  Accrued expenses and other current liabilities

56,464


65,036

  Operating lease liabilities

18,949


17,372

Total current liabilities

444,186


566,288





  Long term deferred revenues

21,969


29,265

  Long term deferred tax liability

1,585


1,574

  Convertible senior notes

358,715


369,664

  Long term loan

1,219


1,219

  Long term operating lease liabilities

64,244


68,402

Total long term liabilities

447,732


470,124





 Total liabilities

891,918


1,036,412





Shareholders'  Equity




  Ordinary shares

94


104

  Additional paid-in capital

611,083


695,412

  Other comprehensive loss

1,357


10,997

  Accumulated deficit

(404,785)


(501,674)

Total shareholders' equity

207,749


204,839





Total liabilities and shareholders' equity

$         1,099,667


$    1,241,251

 

Wix.com Ltd.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


















Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

OPERATING ACTIVITIES:








Net loss 

$      (16,734)


$      (57,736)


$      (47,474)


$      (96,889)

Adjustments to reconcile net loss to net cash used in operating activities:








  Depreciation 

2,927


3,537


5,585


7,109

  Amortization

738


566


1,470


1,132

  Share based compensation expenses

27,565


34,967


52,472


65,685

  Amortization of debt discount and debt issuance costs

5,194


5,516


10,311


10,949

  Decrease in accrued interest and exchange rate on short term and long term deposits

105


15


594


62

  Amortization of premium and discount and accrued interest on marketable securities, net

(10)


438


41


717

  Deferred income taxes, net

402


(55)


533


(1,721)

  Changes in operating lease right-of-use assets

-


5,158


-


9,446

  Changes in operating lease liabilities

-


(4,588)


-


(9,817)

  Decrease (increase) in trade receivables

161


(1,765)


(4,532)


(1,617)

  Increase in prepaid expenses and other current and long-term assets

(3,942)


(6,931)


(11,141)


(21,605)

  Increase (decrease) in trade payables

(3,222)


26,172


1,328


34,974

  Increase in employees and payroll accruals

4,223


11,585


12,235


23,694

  Increase in short term and long term deferred revenues

14,144


29,792


40,233


62,663

Increase in accrued expenses and other current liabilities

5,629


3,287


10,599


10,203

Net cash provided by operating activities

37,180


49,958


72,254


94,985

INVESTING ACTIVITIES:








  Proceeds from short-term deposits and restricted deposits

55,000


9,225


81,775


26,225

  Investment in short-term deposits and restricted deposits

-


(49,000)


(26,000)


(138,000)

  Investment in marketable securities

(108,693)


(100,867)


(136,616)


(230,168)

  Proceeds from marketable securities

21,601


65,656


29,056


154,911

  Purchase of property and equipment

(6,235)


(3,264)


(11,065)


(8,207)

  Capitalization of software development costs

(191)


-


(389)


(132)

Investment in other short and long-term assets

(2,800)


(643)


(2,800)


(5,643)

  Payment for Businesses acquired

-


-


-


(6,626)

  Purchases of investments in privately-held companies

-


(685)


-


(785)

Net cash used in investing activities

(41,318)


(79,578)


(66,039)


(208,425)

FINANCING ACTIVITIES:








  Proceeds from exercise of options and ESPP shares

7,512


12,312


14,190


19,287

  Net cash provided by financing activities

7,512


12,312


14,190


19,287

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

3,374


(17,308)


20,405


(94,153)

CASH AND CASH EQUIVALENTS—Beginning of period

348,088


191,258


331,057


268,103

CASH AND CASH EQUIVALENTS—End of period

$      351,462


$      173,950


$      351,462


$      173,950

 


Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Creative Subscriptions

157,012


190,169


308,376


366,715

Business Solutions

28,407


45,890


51,333


85,331

Total Revenue

$                             185,419


$           236,059


$           359,709


$           452,046









Creative Subscriptions

170,493


217,696


347,387


426,493

Business Solutions

29,070


48,155


52,555


88,216

Total Collections

$                             199,563


$           265,851


$           399,942


$           514,709









Free Cash Flow

$                               30,754


$             46,694


$             60,800


$             86,646

Creative Subscriptions ARR

$                             648,176


$           790,916


$           648,176


$           790,916

Number of registered users at period end (*)

154,039


181,585


154,039


181,585

Number of premium subscriptions at period end (*)

4,295


5,007


4,295


5,007









(*) Excludes users and subscriptions of DeviantArt























Wix.com Ltd.

RECONCILIATION OF REVENUES TO COLLECTIONS

(In thousands)










Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Revenues

$                             185,419


$           236,059


$           359,709


$           452,046

Change in deferred revenues

14,144


29,792


40,233


62,663

Collections

$                             199,563


$           265,851


$           399,942


$           514,709


















Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Creative Subscriptions Revenue

$                             157,012


$           190,169


$           308,376


$           366,715

Change in deferred revenues

13,481


27,527


39,011


59,778

Creative Subscriptions Collections

$                             170,493


$           217,696


$           347,387


$           426,493


















Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Business Solutions Revenue

$                               28,407


$             45,890


$             51,333


$             85,331

Change in deferred revenues

663


2,265


1,222


2,885

Business Solutions Collections

$                               29,070


$             48,155


$             52,555


$             88,216

















Wix.com Ltd.

RECONCILIATION OF REVENUES AND COLLECTIONS EXCLUDING FX IMPACT

(In thousands)










Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Revenues

$                             185,419


$           236,059


$           359,709


$           452,046

FX impact on Q2/20 using Q2/19 rates

-


1,824


-


3,335

Revenue excluding FX impact

$                             185,419


$           237,883


$           359,709


$           455,381









Y/Y%



28%




27%










Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Collections

$                             199,563


$           265,851


$           399,942


$           514,709

FX impact on Q2/20 using Q2/19 rates

-


3,922


-


6,271

Collections excluding FX impact

$                             199,563


$           269,773


$           399,942


$           520,980









Y/Y%



35%




30%









































Wix.com Ltd.

TOTAL ADJUSTMENTS GAAP TO NON-GAAP

(In thousands)


















Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020

(1) Share based compensation expenses:

(unaudited)


(unaudited)

Cost of revenues

$                                 1,436


$                1,869


$                2,747


$                3,500

Research and development

14,119


18,216


26,375


34,401

Selling and marketing

4,506


5,395


9,254


9,963

General and administrative

7,504


9,487


14,096


17,821

Total share based compensation expenses

27,565


34,967


52,472


65,685

(2) Amortization

738


566


1,470


1,132

(3) Acquisition related expenses

53


1,697


53


2,636

(4) Amortization of debt discount and debt issuance costs

5,194


5,516


10,311


10,949

(5) Sales tax accrual and other G&A expenses (income)

-


(485)


-


1,489

(6) Non-operating foreign exchange expenses (income)

140


1,305


1,592


432

Total adjustments of GAAP to Non GAAP

$                               33,690


$             43,566


$             65,898


$             82,323

























Wix.com Ltd.

RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT

(In thousands)


















Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Gross Profit

$                             138,757


$           165,577


$           273,332


$           319,494

Share based compensation expenses

1,436


1,869


2,747


3,500

Acquisition related expenses

-


305


-


305

Amortization 

141


-


283


-

Non GAAP Gross Profit 

140,334


167,751


276,362


323,299









Non GAAP Gross margin

76%


71%


77%


72%


















Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Gross Profit - Creative Subscriptions

$                             127,716


$           151,659


$           252,433


$           292,815

Share based compensation expenses

1,226


1,485


2,375


2,807

Non GAAP Gross Profit - Creative Subscriptions

128,942


153,144


254,808


295,622









Non GAAP Gross margin - Creative Subscriptions

82%


81%


83%


81%


















Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Gross Profit - Business Solutions

$                               11,041


$             13,918


$             20,899


$             26,679

Share based compensation expenses

210


384


372


693

Acquisition related expenses

-


305


-


305

Amortization 

141


-


283


-

Non GAAP Gross Profit - Business Solutions

11,392


14,607


21,554


27,677









Non GAAP Gross margin - Business Solutions

40%


32%


42%


32%

















Wix.com Ltd.

RECONCILIATION OF OPERATING INCOME (LOSS) TO NON-GAAP OPERATING INCOME (LOSS)

(In thousands)










Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Operating loss

$                             (14,161)


$           (53,751)


$           (41,953)


$           (92,142)

Adjustments:








Share based compensation expenses

27,565


34,967


52,472


65,685

Amortization 

738


566


1,470


1,132

Sales tax accrual and other G&A expenses (income)

-


(485)


-


1,489

Acquisition related expenses

53


1,697


53


2,636

Total adjustments

$                               28,356


$             36,745


$             53,995


$             70,942









Non GAAP operating income (loss)

$                               14,195


$           (17,006)


$             12,042


$           (21,200)

















Wix.com Ltd.

RECONCILIATION OF NET LOSS TO NON-GAAP NET INCOME (LOSS) AND NON-GAAP NET INCOME (LOSS) PER SHARE

(In thousands, except  per share data)










Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Net loss

$                             (16,734)


$           (57,736)


$           (47,474)


$           (96,889)

Share based compensation expense and other Non GAAP adjustments

33,690


43,566


65,898


82,323

Non-GAAP net income (loss)

$                               16,956


$           (14,170)


$             18,424


$           (14,566)









Basic  Non GAAP net income (loss) per share

$                                    0.34


$                (0.26)


$                  0.37


$                (0.27)

Weighted average shares used in computing basic Non GAAP net income (loss) per share

50,273,017


54,695,477


49,917,692


53,266,895

























Wix.com Ltd.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

(In thousands)










Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)

Net cash provided by operating activities

$                               37,180


$             49,958


$             72,254


$             94,985

Capital expenditures, net

(6,426)


(3,264)


(11,454)


(8,339)

Free Cash Flow

$                               30,754


$             46,694


$             60,800


$             86,646









Capex related to future Wix HQ office build-out

-


408


-


891

Free Cash Flow, excluding capex related to future Wix HQ office build-out

$                               30,754


$             47,102


$             60,800


$             87,537

























Wix.com Ltd.

RECONCILIATION OF BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND THE DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 











Three Months Ended


Six Months Ended


June 30,


June 30,


2019


2020


2019


2020


(unaudited)


(unaudited)









Basic and diluted weighted average number of shares outstanding 

50,273,017


54,695,477


49,917,692


53,266,895

The following items have been excluded from the diluted weighted average number of shares outstanding because they are anti-dilutive:








Stock options

7,744,708


4,906,490


7,744,708


4,906,490

Restricted share units

2,289,069


2,190,991


2,289,069


2,190,991

 Convertible Notes (if-converted)

3,104,251


3,104,251


3,104,251


3,104,251


63,411,045


64,897,209


63,055,720


63,468,627

 









Wix.com Ltd.

RECONCILIATION OF REVENUES TO COLLECTIONS

(In thousands)










Three Months Ended








September 30,








2019








(unaudited)







Revenues

$                             196,791







Change in deferred revenues

9,069







Collections

$                             205,860









Wix.com Ltd.

RECONCILIATION OF PROJECTED REVENUES TO PROJECTED COLLECTIONS

(In thousands)










Three Months Ended






September 30, 2020






Low


High













Projected revenues

247,000


250,000





Projected change in deferred revenues

23,000


25,000





Projected Collections

$                             270,000


$           275,000





















Wix.com Ltd.

RECONCILIATION OF COHORT COLLECTIONS

(In millions)










Three Months Ended






June 30,






2019


2020













Q2 Cohort revenues

6


10





Q2 Change in deferred revenues

17


28





Q2 Cohort Collections

$                                       23


$                      38





 

 

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