|
WIX.COM LTD.
By: /s/ Eitan Israeli
Name: Eitan Israeli
Title: VP & General Counsel
|
Exhibit |
Description
|
●
|
April 2020 demonstrated significant momentum across the platform as the need for a dynamic online presence accelerates
|
o
|
Added 3.2 million new registered users, an increase of 63% y/y and an all-time monthly high
|
o
|
Collections of the April 2020 user cohort were 76% higher than from users acquired in April a year ago
|
o
|
Net premium subscription additions in the month of April were up 207% y/y
|
o
|
Accelerating new subscriptions generated from existing cohorts
|
●
|
Increasing marketing investment in user cohort acquisition due to thriving demand and to generate further growth
|
●
|
Initiating Q2 outlook of accelerating growth for revenue and collections, underscoring strong performance quarter to date - expecting collections growth of 28-30% y/y in Q2
|
●
|
Solid Q1 2020 results: total revenue of $216 million and total collections of $249 million, both up 24% y/y
|
●
|
Demand for creating an online presence is accelerating as businesses around the globe adapt to the current environment. During the month of April, over 3.2 million new users registered with Wix to create an
online presence, an increase of 63% y/y and an all-time monthly high
|
●
|
Users need to get online quickly and need functionality, driving these new users to purchase subscriptions and business applications at a higher rate and at higher price points than prior cohorts. Collections
from users acquired during April 2020 were 76% higher than from users acquired in April a year ago
|
●
|
Despite what we observed in the early stages of this crisis, cohort cancellation trends have reversed, a testament to our long-standing freemium model. During April, we added more subscriptions from existing
user cohorts (that is, from all created prior to April 2020) than total cancellations in the month. Total net premium subscription additions in the month of April were up 207% y/y
|
●
|
Our users are moving commerce online more rapidly than in the past as net new Wix Stores subscriptions grew 580% y/y and net new Wix Restaurants subscriptions increased 167% y/y in April 2020
|
●
|
As more commerce moves online, businesses also need solutions to communicate and market online. New purchases of Ascend by Wix grew 136% y/y in April 2020
|
●
|
The growth of selling activity of businesses on Wix is also increasing as total gross merchandise volume (GMV) transacted across all payment methods in April grew 110% y/y. Wix Payments growth also accelerated
as new Wix Payments merchants increased 123% m/m and GMV transacted through Wix Payments grew 66% m/m in April 2020
|
●
|
From a development standpoint, we successfully transitioned our entire workforce to working from home, and our development roadmap hasn’t missed a beat. COVID-19 has had no significant impact on execution or
software delivery times
|
●
|
Further, the launch of Editor X is still on track for summer 2020, bringing web agencies and designers the most innovative web design and creation platform, with advanced design and layouting capabilities,
available today
|
●
|
Total revenue in the first quarter of 2020 was $216.0 million, compared to $174.3 million in the first quarter of 2019, an increase of 24% y/y
|
o
|
On a y/y constant currency basis, Q1 revenue would have been $217.5 million, up 25% y/y
|
o
|
Creative Subscriptions revenue in the first quarter of 2020 was $176.5 million, compared to $151.4 million in the first quarter of 2019, an increase of 17% y/y
|
o
|
Business Solutions revenue in the first quarter of 2020 was $39.4 million, compared to $22.9 million in the first quarter of 2019, an increase of 72% y/y
|
●
|
Creative Subscriptions ARR was $739.5 million in the first quarter of 2020, compared to $621.9 million in the first quarter of 2019, an increase of 19% y/y
|
●
|
Total collections in the first quarter of 2020 were $248.9 million, compared to $200.4 million in the first quarter of 2019, an increase of 24% y/y
|
o
|
On a y/y constant currency basis, Q1 collections would have been $251.2 million, up 25% y/y
|
o
|
Creative Subscriptions collections in the first quarter of 2020 were $208.8 million, compared to $176.9 million in the first quarter of 2019, an increase of 18% y/y
|
o
|
Business Solutions collections in the first quarter of 2020 were $40.1 million, compared to $23.5 million in the first quarter of 2019, an increase of 71% y/y
|
●
|
Total gross margin on a GAAP basis in the first quarter of 2020 was 71%, compared to 77% in the first quarter of 2019
|
o
|
Creative Subscriptions gross margin on a GAAP basis was 80%, compared to 82% in the first quarter of 2019
|
o
|
Business Solutions gross margin on a GAAP basis was 32% compared to 43% in the first quarter of 2019
|
●
|
Total non-GAAP gross margin in the first quarter of 2020, calculated as non-GAAP gross profit as a percent of revenue, was 72%, compared to 78% in the first quarter of 2019
|
o
|
Creative Subscriptions gross margin on a non-GAAP basis was 81%, compared to 83% in the first quarter of 2019
|
o
|
Business Solutions gross margin on a non-GAAP basis was 33%, compared to 44% in the first quarter of 2019
|
●
|
GAAP net loss in the first quarter of 2020 was $(39.2) million, or $(0.76) per share, compared to a net loss of $(30.7) million, or $(0.62) per share, for the first quarter of 2019
|
●
|
Non-GAAP net loss in the first quarter of 2020 was $(0.4) million, or $(0.01) per share, compared to non-GAAP net income of $1.5 million, or $0.03 per share for the first quarter of 2019
|
●
|
Net cash provided by operating activities in the first quarter of 2020 was $45.0 million, while capital expenditures totaled $5.1 million, leading to free cash flow of $40.0 million, compared to $30.0 million
of free cash flow in the first quarter of 2019, a 33% year-over-year increase
|
o
|
Excluding the capex investment associated with our new headquarters office build out, free cash flow would have been $40.4 million, up 35% y/y
|
●
|
Added 162,000 net premium subscriptions in the first quarter of 2020 to reach 4.7 million as of March 31, 2020, a 12% increase over the total number of premium subscriptions at the end of the first quarter of
2019
|
●
|
Added 6.9 million registered users in the first quarter of 2020. Registered users as of March 31, 2020 were 172 million, representing a 16% increase compared to the end of the first quarter of 2019
|
●
|
Relaunched the Wix Arena as the Wix Marketplace, a place where Partners can offer their services to Wix users who need help creating, optimizing or marketing their website
|
●
|
The Wix Education Team created a learning site with at-home family activities in order to provide more fun and creative opportunities for kids and parents to learn how to create and grow a website
|
●
|
Integrated Zoom with Wix Bookings, Wix Stores and Wix Events to help businesses bring their appointments and services online. Zoom is now available in the Wix App Market
|
●
|
Built and launched an online volunteer call center on Corvid by Wix to connect governments to citizens that need support. The tool was built to help the Israeli Ministry of Finance & Welfare answer the
needs of citizens in the time of COVID-19 and is now being offered to governments around the world
|
Q2 2020 Outlook
|
Y/Y growth
|
||
Revenue
|
$231 - 233 million
|
25% - 26%
|
|
Collections
|
$255 - 260 million
|
28% - 30%
|
|
Free Cash Flow
|
$41 - 43 million
|
33% - 40%
|
|
Free Cash Flow (excluding $1 million in
capex for future Wix HQ office build out)
|
$42 - 44 million
|
37% - 43%
|
●
|
Global changes in consumer dynamics shifting to online
|
●
|
The global rise in unemployment rates and the need of individuals to turn to the internet to find a source of income
|
●
|
Faster adoption of our platform (increases in new user demand) coupled with higher intent (increases in conversion of users to premium subscription purchases)
|
●
|
The mix shift of subscription purchases to business packages, resulting in higher ARPS
|
●
|
Higher GMV of transactions on Wix Stores and other verticals
|
●
|
The overall impact of these changes on our ability to invest our marketing budget faster
|
Wix.com Ltd.
|
CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP
|
(In thousands, except loss per share data)
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Revenue
|
||||||||
Creative Subscriptions
|
$
|
151,364
|
$
|
176,546
|
||||
Business Solutions
|
22,926
|
39,441
|
||||||
174,290
|
215,987
|
|||||||
Cost of Revenue
|
||||||||
Creative Subscriptions
|
26,648
|
35,390
|
||||||
Business Solutions
|
13,067
|
26,680
|
||||||
39,715
|
62,070
|
|||||||
Gross Profit
|
134,575
|
153,917
|
||||||
Operating expenses:
|
||||||||
Research and development
|
58,183
|
70,716
|
||||||
Selling and marketing
|
85,718
|
96,156
|
||||||
General and administrative
|
18,466
|
25,436
|
||||||
Total operating expenses
|
162,367
|
192,308
|
||||||
Operating loss
|
(27,792
|
)
|
(38,391
|
)
|
||||
Financial expenses, net
|
(1,730
|
)
|
1,145
|
|||||
Other income (expenses)
|
24
|
31
|
||||||
Loss before taxes on income
|
(29,498
|
)
|
(37,215
|
)
|
||||
Taxes on income
|
1,242
|
1,938
|
||||||
Net loss
|
$
|
(30,740
|
)
|
$
|
(39,153
|
)
|
||
Basic and diluted net loss per share
|
$
|
(0.62
|
)
|
$
|
(0.76
|
)
|
||
Basic and diluted weighted-average shares used to compute net loss per share
|
49,562,367
|
51,838,314
|
Wix.com Ltd.
|
|||
CONDENSED CONSOLIDATED BALANCE SHEET
|
|||
(In thousands)
|
Period ended
|
||||||||
December 31,
|
March 31,
|
|||||||
2019
|
2020
|
|||||||
(audited)
|
(unaudited)
|
|||||||
Assets
|
|
|
||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
268,103
|
$
|
191,258
|
||||
Short term deposits
|
294,096
|
366,048
|
||||||
Restricted cash and deposit
|
1,149
|
1,150
|
||||||
Marketable securities
|
164,301
|
168,642
|
||||||
Trade receivables
|
16,987
|
17,065
|
||||||
Prepaid expenses and other current assets
|
19,211
|
40,560
|
||||||
Total current assets
|
763,847
|
784,723
|
||||||
Long Term Assets:
|
||||||||
Property and equipment, net
|
31,706
|
32,951
|
||||||
Marketable securities
|
177,298
|
210,302
|
||||||
Prepaid expenses and other long-term assets
|
9,926
|
13,148
|
||||||
Intangible assets and goodwill, net
|
37,641
|
45,075
|
||||||
Operating lease assets
|
79,249
|
78,617
|
||||||
Total long-term assets
|
335,820
|
380,093
|
||||||
Total assets
|
$
|
1,099,667
|
$
|
1,164,816
|
||||
Liabilities and Shareholder's Equity
|
||||||||
Current Liabilities:
|
||||||||
Trade payables
|
$
|
37,687
|
$
|
46,639
|
||||
Employees and payroll accruals
|
41,938
|
48,408
|
||||||
Deferred revenues
|
289,148
|
319,531
|
||||||
Accrued expenses and other current liabilities
|
56,464
|
65,665
|
||||||
Operating lease liabilities
|
18,949
|
15,944
|
||||||
Total current liabilities
|
444,186
|
496,187
|
||||||
Long term deferred revenues
|
21,969
|
24,457
|
||||||
Long term deferred tax liability
|
1,585
|
1,598
|
||||||
Convertible senior notes
|
358,715
|
364,148
|
||||||
Long term loan
|
1,219
|
1,219
|
||||||
Long term operating lease liabilities
|
64,244
|
66,283
|
||||||
Total long term liabilities
|
447,732
|
457,705
|
||||||
Total liabilities
|
891,918
|
953,892
|
||||||
Shareholders' Equity
|
||||||||
Ordinary shares
|
94
|
96
|
||||||
Additional paid-in capital
|
611,083
|
654,454
|
||||||
Other comprehensive loss
|
1,357
|
312
|
||||||
Accumulated deficit
|
(404,785
|
)
|
(443,938
|
)
|
||||
Total shareholders' equity
|
207,749
|
210,924
|
||||||
Total liabilities and shareholders' equity
|
$
|
1,099,667
|
$
|
1,164,816
|
Wix.com Ltd.
|
|||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||
(In thousands)
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(30,740
|
)
|
$
|
(39,153
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation
|
2,658
|
3,572
|
||||||
Amortization
|
732
|
566
|
||||||
Share based compensation expenses
|
24,907
|
30,718
|
||||||
Amortization of debt discount and debt issuance costs
|
5,117
|
5,433
|
||||||
Decrease in accrued interest and exchange rate on short term and long term deposits
|
489
|
47
|
||||||
Amortization of premium and discount and accrued interest on marketable securities, net
|
51
|
279
|
||||||
Deferred income taxes, net
|
131
|
(1,666
|
)
|
|||||
Changes in operating lease right-of-use assets
|
-
|
4,288
|
||||||
Changes in operating lease liabilities
|
-
|
(5,229
|
)
|
|||||
Decrease (increase) in trade receivables
|
(4,693
|
)
|
148
|
|||||
Increase in prepaid expenses and other current and long-term assets
|
(7,199
|
)
|
(14,674
|
)
|
||||
Increase in trade payables
|
4,550
|
8,802
|
||||||
Increase in employees and payroll accruals
|
8,012
|
12,109
|
||||||
Increase in short term and long term deferred revenues
|
26,089
|
32,871
|
||||||
Increase in accrued expenses and other current liabilities
|
4,970
|
6,916
|
||||||
Net cash provided by operating activities
|
35,074
|
45,027
|
||||||
INVESTING ACTIVITIES:
|
||||||||
Proceeds from short-term deposits and restricted deposits
|
26,775
|
17,000
|
||||||
Investment in short-term deposits and restricted deposits
|
(26,000
|
)
|
(89,000
|
)
|
||||
Investment in marketable securities
|
(27,923
|
)
|
(129,301
|
)
|
||||
Proceeds from marketable securities
|
7,455
|
89,255
|
||||||
Purchase of property and equipment
|
(4,830
|
)
|
(4,943
|
)
|
||||
Capitalization of software development costs
|
(198
|
)
|
(132
|
)
|
||||
Investment in other short and long-term assets
|
-
|
(3,500
|
)
|
|||||
Payment for Businesses acquired
|
-
|
(6,626
|
)
|
|||||
Acquisition of Intangible assets
|
-
|
(1,500
|
)
|
|||||
Purchases of investments in privately-held companies
|
-
|
(100
|
)
|
|||||
Net cash used in investing activities
|
(24,721
|
)
|
(128,847
|
)
|
||||
FINANCING ACTIVITIES:
|
||||||||
Proceeds from exercise of options and ESPP shares
|
6,678
|
6,975
|
||||||
Net cash provided by financing activities
|
6,678
|
6,975
|
||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
17,031
|
(76,845
|
)
|
|||||
CASH AND CASH EQUIVALENTS—Beginning of period
|
331,057
|
268,103
|
||||||
CASH AND CASH EQUIVALENTS—End of period
|
$
|
348,088
|
$
|
191,258
|
Wix.com Ltd.
|
|||
KEY PERFORMANCE METRICS
|
|||
(In thousands)
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Creative Subscriptions
|
151,364
|
176,546
|
||||||
Business Solutions
|
22,926
|
39,441
|
||||||
Total Revenue
|
$
|
174,290
|
$
|
215,987
|
||||
Creative Subscriptions
|
176,893
|
208,797
|
||||||
Business Solutions
|
23,486
|
40,061
|
||||||
Total Collections
|
$
|
200,379
|
$
|
248,858
|
||||
Free Cash Flow
|
$
|
30,046
|
$
|
39,952
|
||||
Creative Subscriptions ARR
|
$
|
621,876
|
$
|
739,457
|
||||
Number of registered users at period end (*)
|
148,363
|
172,254
|
||||||
Number of premium subscriptions at period end (*)
|
4,164
|
4,661
|
||||||
(*) Excludes users and subscriptions of DeviantArt
|
Wix.com Ltd.
|
RECONCILIATION OF REVENUES TO COLLECTIONS
|
(In thousands)
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Revenues
|
$
|
174,290
|
$
|
215,987
|
||||
Change in deferred revenues
|
26,089
|
32,871
|
||||||
Collections
|
$
|
200,379
|
$
|
248,858
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Creative Subscriptions Revenue
|
$
|
151,364
|
$
|
176,546
|
||||
Change in deferred revenues
|
25,529
|
32,251
|
||||||
Creative Subscriptions Collections
|
$
|
176,893
|
$
|
208,797
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Business Solutions Revenue
|
$
|
22,926
|
$
|
39,441
|
||||
Change in deferred revenues
|
560
|
620
|
||||||
Business Solutions Collections
|
$
|
23,486
|
$
|
40,061
|
Wix.com Ltd.
|
TOTAL ADJUSTMENTS GAAP TO NON-GAAP
|
(In thousands)
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
(1) Share based compensation expenses:
|
|
|||||||
Cost of revenues
|
$
|
1,311
|
$
|
1,631
|
||||
Research and development
|
12,256
|
16,185
|
||||||
Selling and marketing
|
4,748
|
4,568
|
||||||
General and administrative
|
6,592
|
8,334
|
||||||
Total share based compensation expenses
|
24,907
|
30,718
|
||||||
(2) Amortization
|
732
|
566
|
||||||
(3) Acquisition related expenses
|
-
|
939
|
||||||
(4) Amortization of debt discount and debt issuance costs
|
5,117
|
5,433
|
||||||
(5) Sales tax accrual
|
-
|
1,974
|
||||||
(6) Non-operating foreign exchange expenses (income)
|
1,452
|
(873
|
)
|
|||||
Total adjustments of GAAP to Non GAAP
|
$
|
32,208
|
$
|
38,757
|
Wix.com Ltd.
|
RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT
|
(In thousands)
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Gross Profit
|
$
|
134,575
|
$
|
153,917
|
||||
Share based compensation expenses
|
1,311
|
1,631
|
||||||
Amortization
|
142
|
-
|
||||||
Non GAAP Gross Profit
|
136,028
|
155,548
|
||||||
Non GAAP Gross margin
|
78
|
%
|
72
|
%
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Gross Profit - Creative Subscriptions
|
$
|
124,716
|
$
|
141,156
|
||||
Share based compensation expenses
|
1,150
|
1,322
|
||||||
Non GAAP Gross Profit - Creative Subscriptions
|
125,866
|
142,478
|
||||||
Non GAAP Gross margin - Creative Subscriptions
|
83
|
%
|
81
|
%
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Gross Profit - Business Solutions
|
$
|
9,859
|
$
|
12,761
|
||||
Share based compensation expenses
|
161
|
309
|
||||||
Amortization
|
142
|
-
|
||||||
Non GAAP Gross Profit - Business Solutions
|
10,162
|
13,070
|
||||||
Non GAAP Gross margin - Business Solutions
|
44
|
%
|
33
|
%
|
Wix.com Ltd.
|
||||||||
RECONCILIATION OF OPERATING LOSS TO NON-GAAP OPERATING LOSS
|
||||||||
(In thousands)
|
||||||||
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Operating loss
|
$
|
(27,792
|
)
|
$
|
(38,391
|
)
|
||
Adjustments:
|
||||||||
Share based compensation expenses
|
24,907
|
30,718
|
||||||
Amortization
|
732
|
566
|
||||||
Sales tax accrual
|
-
|
1,974
|
||||||
Acquisition related expenses
|
-
|
939
|
||||||
Total adjustments
|
$
|
25,639
|
$
|
34,197
|
||||
Non GAAP operating loss
|
$
|
(2,153
|
)
|
$
|
(4,194
|
)
|
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
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Net loss
|
$
|
(30,740
|
)
|
$
|
(39,153
|
)
|
||
Share based compensation expense and other Non GAAP adjustments
|
32,208
|
38,757
|
||||||
Non-GAAP net income (loss)
|
$
|
1,468
|
$
|
(396
|
)
|
|||
Basic Non GAAP net income (loss) per share
|
$
|
0.03
|
$
|
(0.01
|
)
|
|||
Weighted average shares used in computing basic Non GAAP net income (loss) per share
|
49,562,367
|
51,838,314
|
Wix.com Ltd.
|
|||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
|
|||
(In thousands)
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Net cash provided by operating activities
|
$
|
35,074
|
$
|
45,027
|
||||
Capital expenditures, net
|
(5,028
|
)
|
(5,075
|
)
|
||||
Free Cash Flow
|
$
|
30,046
|
$
|
39,952
|
Wix.com Ltd.
|
|||
RECONCILIATION OF BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND THE DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2019
|
2020
|
|||||||
(unaudited)
|
||||||||
Basic and diluted weighted average number of shares outstanding
|
49,562,367
|
51,838,314
|
||||||
The following items have been excluded from the diluted weighted average number of shares outstanding because they are anti-dilutive:
|
||||||||
Stock options
|
8,237,537
|
5,481,573
|
||||||
Restricted share units
|
2,342,469
|
2,228,786
|
||||||
60,142,373
|
59,548,673
|
Wix.com Ltd.
|
|||
RECONCILIATION OF PROJECTED REVENUES TO PROJECTED COLLECTIONS
|
|||
(In thousands)
|
Three Months Ended
|
||||||||
June 30, 2020
|
||||||||
Low
|
High
|
|||||||
Projected revenues
|
231,000
|
233,000
|
||||||
Projected change in deferred revenues
|
24,000
|
27,000
|
||||||
Projected Collections
|
$
|
255,000
|
$
|
260,000
|