Upgrade to SI Premium - Free Trial

Wix.com Reports First Quarter 2016 Results

May 4, 2016 1:00 AM

TEL AVIV, Israel, May 04, 2016 (GLOBE NEWSWIRE) -- Wix.com Ltd. (Nasdaq: WIX), a leading global software platform for small businesses operating online, today reported financial results for the first quarter ended March 31, 2016. The Company also provided its outlook for the second quarter 2016 and increased its financial outlook for the full year 2016.

Q1 2016 Financial Summary

Three months ended Mar. 31,
$ in thousands 2016 2015 Y/Y growth Prior Q1 2016 Outlook
Collections (FX neutral to Q1 2015)$77,484 $55,869 39% $75,000 - 76,000
Collections$75,694 $55,869 35% $73,000 - 74,000
Revenue (FX neutral to Q1 2015)$62,722 $44,524 41% N/A
Revenue$61,586 $44,524 38% $60,000 - 61,000
Adjusted EBITDA$2,664 $(493) NM $1,000 - 2,000

“Our outstanding results this quarter reflect a unique combination of a record number of additions of over five million new registered users, an improvement in conversion to premium subscriptions, and an increase in collections per new premium subscription,” said Avishai Abrahami, CEO and Co-founder of Wix. “This exceptional performance is the result of the success of several new products introduced over the last two quarters and higher traffic due to an ongoing increase of global awareness of the Wix brand.”

Lior Shemesh, CFO of Wix, commented, “Our first quarter results demonstrate strong top-line growth and continued improvement in profitability and free cash flow compared to the first quarter last year. As a result of these positive trends, we are increasing our full year outlook. We will continue to leverage our investments in product development to drive conversion and returns on our marketing spend.”

Q1 2016 Results and Highlights

Recent Business Highlights

Financial Outlook

The Company is introducing its outlook for the second quarter of 2016 and increasing its prior outlook for full year 2016 as follows:

Q2 2016 Outlook Y/Y growth
Collections (FX neutral to Q2 2015)$79 - $80 million 38% - 39%
Collections$77 - $78 million 34% - 36%
Revenue$66 - $67 million 36% - 38%
Adjusted EBITDA$6.5 - $7.5 million NM
FY 2016 Outlook
Prior Updated Y/Y growth
Collections (FX neutral to 2015)$320 - $326 million $324 - $328 million 34% - 36%
Collections$314 - $320 million $320 - $324 million 32% - 34%
Revenue$270 - $274 million $274 - $277 million 35% - 36%
Adjusted EBITDA$27 - $30 million $30 - $32 million 104% - 117%

Conference Call and Webcast Information

Prior to today’s scheduled quarterly conference call, Wix will provide a supplemental data sheet and supporting slides. These materials provide shareholders and analysts with additional time and detail for analyzing results in advance of the quarterly conference call. The materials will be available before the conference call at https://investors.wix.com/results.cfm.

Wix.com’s first quarter 2016 teleconference and webcast will be held at 8:30 a.m. ET on Wednesday, May 4, 2016 and will include brief comments by management followed by a question-and-answer session.

To participate on the live call, analysts and investors should dial 866-393-4306 (US/Canada), 734-385-2616 (International) or 1-809-315-362 (Israel) at least ten minutes prior to the start time of the call. A telephonic replay of the call will be available through May 11, 2016 at 11:59 p.m. ET by dialing 855-859-2056 (US/Canada) or 404-537-3406 (International) and providing Conference ID: 87463537.

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.

Wix.com (NASDAQ: Wix) is a leading cloud-based web development platform with over 84 million registered users worldwide. Wix was founded on the belief that the Internet should be accessible to everyone to develop, create and contribute. Through free and premium subscriptions, Wix empowers millions of businesses, organizations, professionals and individuals to take their businesses, brands and workflow online. The Wix Editor and highly curated App Market enable users to build and manage a fully integrated and dynamic digital presence. Wix's headquarters are in Tel Aviv with offices in San Francisco, New York, Miami, Vilnius and Dnepropetrovsk.

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, collections and revenue on a constant currency basis, adjusted EBITDA, free cash flow, non-GAAP net loss and non-GAAP net loss per share (collectively the "non-GAAP financial measures"). Collections represents 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. We adjust collections and revenue to measure them on a constant currency basis by assuming the same exchange rates as the prior period applied to the reported figures in the current period. Adjusted EBITDA is defined as net profit or loss before interest, bank charges and other financial expenses (income), net unrealized losses (gains) on hedging transactions, other expenses, taxes on income, depreciation amortization, and other unusual or non-recurring expenses, share-based compensation expense and including the effect of the changes in deferred revenue and prepaid domain registration costs. Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures. Non-GAAP net loss represents net loss calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense and other non-GAAP adjustments. Non-GAAP net loss per share represents non-GAAP net loss divided by the weighted average number of shares used in computing GAAP loss per share.

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 it provides 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 of GAAP to Non-GAAP Financial Measures" table in this press release. This accompanying table has 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 has not reconciled adjusted EBITDA guidance to net profit because it does not provide guidance for net profit. As items that impact net profit are out of the Company's control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, a reconciliation to net profit is not available without unreasonable effort.

Forward-Looking Statements

This press release 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 and may be identified by words like “anticipate,” “assume,” “believe,” “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 press release 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; our ability to maintain and enhance our brand and reputation; our ability to manage the growth of our infrastructure effectively; changes to technologies used in our solutions or in global, national, regional or local economic, business, competitive, market, regulatory and other factors discussed under the heading “Risk Factors” in the Company’s 2015 annual report on Form 20-F filed with the Securities and Exchange Commission on April 13, 2016. 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.

Wix.com Ltd.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
Period ended
December 31, March 31,
2015 2016
Assets(audited) (unaudited)
Current Assets:
Cash and cash equivalents$ 39,226 $ 38,179
Short term deposits 70,773 75,167
Restricted cash and deposit 3,851 1,921
Trade receivables 6,461 5,483
Prepaid expenses and other current assets 11,989 14,342
Total current assets 132,300 135,092
Property, equipment and software, net
Long-Term Assets:
Property and equipment, net 8,734 8,661
Prepaid expenses and other long-term assets 2,200 2,368
Intangible assets and goodwill, net 6,199 6,012
Total long-term assets 17,133 17,041
Total assets$ 149,433 $ 152,133
Liabilities and Shareholder's Deficiency
Current Liabilities:
Trade payables$ 12,280 $ 16,866
Employees and payroll accruals 15,210 15,432
Deferred revenues 100,561 114,358
Accrued expenses and other current liabilities 20,281 13,200
Total current liabilities 148,332 159,856
Long term deferred revenues 4,206 4,517
Long term deferred tax liability 625 598
Other long-term liabilities 75 75
Total long-term liabilities 4,906 5,190
Total liabilities 153,238 165,046
Shareholders' Deficiency
Ordinary shares 64 64
Additional paid-in capital 192,791 202,424
Other comprehensive loss (248) 923
Accumulated deficit (196,412) (216,324)
Total shareholders' deficiency (3,805) (12,913)
Total liabilities and shareholders' deficiency$ 149,433 $ 152,133

Wix.com Ltd.
CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP
(In thousands, except loss per share data)
Three Months Ended
March 31,
2015 2016
(unaudited)
Revenue$ 44,524 $ 61,586
Cost of revenue 7,811 10,507
Gross Profit 36,713 51,079
Operating expenses:
Research and development 17,448 24,472
Selling and marketing 32,006 40,454
General and administrative 4,587 5,921
Total operating expenses 54,041 70,847
Operating loss (17,328) (19,768)
Financial income (expenses), net 1,857 505
Other income (expenses) 1 -
Loss before taxes on income (15,470) (19,263)
Taxes on income 556 649
Net loss$ (16,026) $ (19,912)
Basic and diluted net loss per share$ (0.41) $ (0.49)
Basic and diluted weighted-average shares used to compute net loss per share 38,634,897 40,378,899
Wix.com Ltd.
ADJUSTMENTS FOR RECONCILIATION OF GAAP TO NON-GAAP STATEMENT OF OPERATIONS
(In thousands, except loss per share data)
Three Months Ended
March 31,
2015 2016
(1) Share based compensation expenses:(unaudited)
Cost of revenues$ 295 $ 428
Research and development 1,959 3,111
Selling and marketing 599 981
General and administrative 1,195 1,617
Total share based compensation expenses 4,048 6,137
(2) Amortization 155 187
(3) Withdrawn secondary offering expenses - 0
(4) Acquisition related expenses - 1,183
(5) Taxes on income 112 175
Total adjustments of GAAP to Non GAAP$ 4,315 $ 7,682
Wix.com Ltd.
ADJUSTMENTS FOR RECONCILIATION OF GAAP TO NON-GAAP COST OF REVENUES
(In thousands, except loss per share data)
Three Months Ended
March 31,
2015 2016
(unaudited)
Gross Profit$ 36,713 $ 51,079
Share based compensation expenses 295 428
Gross Profit -Non GAAP 37,008 51,507
Gross margin -Non GAAP 83% 84%
Wix.com Ltd.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (NON-GAAP)
(In thousands)
Three Months Ended
March 31,
2015 2016
(unaudited)
Net Loss$ (16,026) $ (19,912)
Adjustments:
Interest, bank charges & other financial expenses (income), net 332 (587)
Unrealized gains on hedging transactions (1,063) 399
Other expenses (1) -
Taxes on income 556 649
Depreciation 925 1,244
Amortization 155 187
Withdrawn secondary offering expenses - -
Acquisition related expenses - 1,183
Share based compensation expenses 4,048 6,137
Change in deferred revenue 11,345 14,108
Change in prepaid domain registration costs (764) (744)
Total adjustments$ 15,533 $ 22,576
Adjusted EBITDA$ (493) $ 2,664
Wix.com Ltd.
RECONCILIATION OF NET LOSS TO NON-GAAP NET LOSS AND NON-GAAP NET LOSS PER SHARE
(In thousands)
Three Months Ended
March 31,
2015 2016
(unaudited)
Net Loss$ (16,026) $ (19,912)
Share based compensation expense and other Non GAAP adjustments 4,315 7,682
Non-GAAP net loss$ (11,711) $ (12,230)
Basic and diluted Non GAAP net loss per share$ (0.30) $ (0.30)
Weighted average shares used in computing basic and diluted Non GAAP net loss per share 38,634,897 40,378,899

Wix.com Ltd.
KEY PERFORMANCE METRICS
(In thousands)
Three Months Ended
March 31,
2015 2016
(unaudited)
Revenues$ 44,524 $ 61,586
Collections$ 55,869 $ 75,694
Adjusted EBITDA$ (493) $ 2,664
Number of registered users at period end 62,514 82,271
Number of premium subscriptions at period end 1,371 1,938
Wix.com Ltd.
RECONCILIATION OF REVENUES TO COLLECTIONS
(In thousands)
Three Months Ended
March 31,
2015 2016
(unaudited)
Revenues$ 44,524 $ 61,586
Change in deferred revenues 11,345 14,108
Collections$ 55,869 $ 75,694
Wix.com Ltd.
RECONCILIATION OF COLLECTIONS EXCLUDING FX IMPACT
(In thousands)
Three Months Ended
March 31,
2015 2016
(unaudited)
Collections$ 55,869 $ 75,694
F/X impact on Q1/16 using Q1/15 rates - 1,790
Collections excluding FX impact$ 55,869 $ 77,484
Y/Y% 39%
Three Months Ended
December 31, March 31,
2015 2016
(unaudited)
Collections$ 66,870 $ 75,694
F/X impact on Q1/16 using Q4/15 rates - (130)
Collections excluding FX impact$ 66,870 $ 75,564
Q/Q% 13%
Wix.com Ltd.
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW
(In thousands)
Three Months Ended
March 31,
2015 2016
(unaudited)
Net cash provided by (used in) operating activities$ (581) $ (925)
Capital expenditures, net (2,081) (1,209)
Free Cash Flow$ (2,662) $ (2,134)
Wix.com Ltd.
RECONCILIATION OF PROJECTED REVENUES TO PROJECTED COLLECTIONS
(In thousands)
Three Months Ended Year Ending
June 30,2016 December 31,2016
Low High Low High
Projected revenues$ 66,000 $ 67,000 $ 274,000 $ 277,000
Projected change in deferred revenues 11,000 11,000 46,000 47,000
Projected collections$ 77,000 $ 78,000 $ 320,000 $ 324,000

Wix.com Ltd.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
March 31,
2015 2016
(unaudited) (unaudited)
OPERATING ACTIVITIES:
Net loss $ (16,026) $ (19,912)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 925 1,244
Amortization 155 187
Share based compensation expenses 4,048 6,137
Tax benefit related to exercise of share options 138 175
Decrease (increase) in accrued interest and exchange rate on short term and long term deposits 328 (230)
Deferred income taxes, net (28) (26)
Decrease (increase) in trade receivables (2,100) 978
Increase in prepaid expenses and other current and long-term assets (2,032) (1,589)
Increase in trade payables 6,123 4,624
Increase (decrease) in employees and payroll accruals (3,299) 222
Increase in short term and long term deferred revenues 11,694 14,108
Decrease in accrued expenses and other current liabilities (507) (6,843)
Net cash used in operating activities (581) (925)
INVESTING ACTIVITIES:
Proceeds from short-term deposits and restricted deposits 11,906 4,766
Investment in short-term deposits and restricted deposits (1,686) (7,000)
Purchase of property and equipment (2,081) (1,209)
Net cash provided by (used in) investing activities 8,139 (3,443)
FINANCING ACTIVITIES:
Proceeds from exercise of options and ESPP shares 1,780 3,321
Net cash provided by financing activities 1,780 3,321
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (167) -
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 9,171 (1,047)
CASH AND CASH EQUIVALENTS—Beginning of period 40,200 39,226
CASH AND CASH EQUIVALENTS—End of period$ 49,371 $ 38,179 

Investor Relations:
Joe Pollaro / Ryan Gee
Wix.com
[email protected]
+1 415.449.4718 / +1 415.223.2610

Media Relations:
Vivian Hernandez
Wix.com
[email protected]
+1 415.517.6539

Source: Wix.com Ltd.

Categories

Press Releases

Next Articles