Wix Reports Third Quarter 2019 Results

NEW YORK, Nov. 14, 2019 /PRNewswire/ -- Wix.com Ltd. (Nasdaq: WIX) today reported strong financial results for the third quarter ended September 30, 2019. In addition, the Company provided its outlook for the fourth quarter 2019 and updated its outlook for the full year.

"The investment in marketing to professionals we announced earlier this year is already showing positive returns as agencies continue to increase their engagement with Wix," said Avishai Abrahami, Co-founder and CEO of Wix. "We continue to build out the Wix platform to provide the ability to create any website or application online, and I am excited about our momentum as we head into 2020."

Nir Zohar, President and COO of Wix, said, "Our results this quarter reflect strong growth in the lifetime value of our user cohorts. This growth has been driven by a combination of increasing subscriptions and monetization per subscription, which demonstrates the high value of our products and success with our recent pricing optimization efforts."

Lior Shemesh, CFO of Wix, said, "Our worldwide reach provides us with a global user base; however, it also subjects us to changes in foreign exchange rates. We have experienced strong growth this year, but our growth would be even stronger excluding changes in FX rates. Using constant currency rates on a year over year basis, we expect our revenue for the full year 2019 would be approximately $10 million higher and collections would be roughly $12 million higher, which would equate to 28% year over year growth. Despite this headwind, we are ending 2019 on a strong note and are excited about 2020."

Q3 2019 Financial Summary


                                                          Three months ended

                                                        
        September 30,



                                     
     
     $ in thousands                  2018       2019   Y/Y growth 
       Prior Q3 2019 Outlook




            Revenue                                                 $155,600   $196,791          26%   
        $196,000 - 198,000



            Collections                                             $162,777   $205,860          26%   
        $204,000 - 206,000

    ---


            Operating Income (Loss)                                 $(3,498) $(20,605)  
        NA


                                                                      $16,256    $12,258        (25)%
    Non-GAAP Operating Income


    ---

                                                                      $27,607    $36,073          31%
    Net Cash Provided by
    Operating Activities



            Free Cash Flow                                           $23,691    $29,227          23%

Additional Q3 2019 Results and Highlights

    --  Revenue in the third quarter was impacted by changes in foreign exchange
        (FX) rates since Q3 guidance was provided in July, as well as a change
        in revenue mix in the quarter
    --  Collections in the third quarter were impacted by changes in FX rates
        since Q3 guidance was provided in July. Assuming constant FX rates since
        Q3 guidance was issued in July, Q3 collections were $207.0M, up 27% y/y
    --  Gross margin on a GAAP basis in the third quarter of 2019 was 73%,
        compared to 79% in the third quarter of 2018
    --  Non-GAAP gross margin in the third quarter of 2019, calculated as
        non-GAAP gross profit as a percent of revenue, was 74%, compared to 80%
        in the third quarter of 2018
        --  The decline in non-GAAP gross margin is attributed to the growth of
            Wix Payments since its launch in Q4 2018, as well as the investment
            in expanding our Customer Solutions globally to provide a more
            personalized support experience for our users. We believe this
            investment and Wix Payments will drive incremental collections and
            revenue growth in 2020 and beyond
    --  GAAP operating loss in the third quarter of 2019 was $(20.6) million,
        compared to GAAP operating loss of $(3.5) million in the third quarter
        of 2018
        --  The y/y growth in GAAP operating loss is due to the decline in gross
            margin as a result of the growth in Wix Payments, the investment we
            made in Customer Solutions, the increase in stock based compensation
            expenses as a result of increases in our share price and the accrual
            of approximately $3.2 million in sales tax expense in GAAP G&A
            expenses in Q3 2019
    --  Non-GAAP operating income in the third quarter of 2019 was $12.3 million
        compared to non-GAAP operating income of $16.3 million in the third
        quarter of 2018.
        --  The y/y decline in non-GAAP operating income is attributed to the
            decline in gross margin as a result of the growth in Wix Payments,
            as well as the investment we made in Customer Solutions
    --  GAAP net loss in the third quarter of 2019 was $(17.4) million, or
        $(0.34) per share, compared to a net loss of $(5.9) million, or $(0.12)
        per share, for the third quarter of 2018
    --  Non-GAAP net income in the third quarter of 2019 was $20.8 million, or
        $0.41 per share, compared to non-GAAP net income of $18.8 million, or
        $0.39 per share for the third quarter of 2018
    --  Net cash provided by operating activities in the third quarter of 2019
        was $36.1 million, while capital expenditures totaled $6.8 million,
        leading to free cash flow of $29.2 million, compared to $23.7 million of
        free cash flow in the third quarter of 2018, a 23% year-over-year
        increase
    --  Added 114,000 net premium subscriptions in the third quarter of 2019 to
        reach 4.4 million as of September 30, 2019, a 15% increase over the
        total number of premium subscriptions at the end of the third quarter of
        2018
    --  Added 5.5 million registered users in the third quarter of 2019.
        Registered users as of September 30, 2019 were 160 million, representing
        a 17% increase compared to the end of the third quarter of 2018

Recent Business Highlights

    --  Introduced Wix Partner Program: This quarter, we began the roll out of
        the Wix Partner Program, which offers agencies professional resources to
        achieve their business goals and deliver custom solutions to their
        clients. The initial phase of this program includes extended support,
        access to the tailored dashboard, forum, and product betas, as well as
        migration support and a complimentary business website. Future products
        and offerings for this program are planned for early 2020
    --  Announced a strategic partnership with NTT Town Page: In September, we
        announced a partnership with NTT Town Page, which provides a leading
        Japanese business directory, offering "NTT Town Page Digital Lead
        Powered by Wix" to NTT Town Page small business customers across Japan.
        The service will include a complete suite of products including website
        creation, site management, e-commerce and SEO capabilities to power
        online marketing and promotion for small and medium-sized businesses. As
        a result of this venture, Wix will serve as the exclusive website
        platform provider to NTT Town Page, positioning Wix to become the
        leading digital marketing solution for millions of businesses in Japan
    --  Introduced enhanced payment options in Japan: In August, we announced a
        partnership with GMO Epsilon to provide a local payment option for Wix
        merchants in Japan. Wix businesses in Japan are now able to offer
        GMO-EP's payment solutions to customers through their online businesses,
        enabling credit card payments with lower processing fees, direct bank
        transfers, and additional features to make growing a business on Wix
        even more convenient
    --  Renewing of the share repurchase authorization: As previously disclosed,
        Wix is authorized by the Israeli District Court to repurchase up to $100
        million of its ordinary shares from time to time, until December 31,
        2019, when the current court authorization expires. Wix plans to file in
        the coming days a motion seeking a renewed court approval in Israel to
        re-authorize the Company to repurchase up to $100 million of its
        ordinary shares from time to time until December 31, 2020, or a shorter
        period as approved by the court. Wix expects the motion to be
        re-approved before the expiration of the current authorization. Wix did
        not repurchase any shares in the quarter ended September 30, 2019

Financial Outlook

Wix is introducing its outlook for the fourth quarter 2019:


                  
       Q4 2019 Outlook          
     Y/Y growth




     Revenue       
          $204 - $206 million        24% - 25%




     Collections   
          $222 - $225 million        26% - 28%

Wix is also updating its outlook for the full year 2019. The updated full year guidance is inclusive of changes in FX rates since we last provided full year guidance in July. Had FX rates stayed constant since that time, we would have raised FY 2019 collections guidance from the prior range of $825-$831 million by approximately $3.5 million at the midpoint of the range to $830-$833 million, and FY 2019 free cash flow guidance from the prior range of $123-$126 million by approximately $2.5 million at the midpoint of the range to $126-$128 million.




                       
          Updated              
     Y/Y growth    
            Updated FY 2019              
          Prior
                     
        FY 2019 Outlook                            Outlook (FX neutral              
        FY 2019 Outlook
                                                                        to July 2019)




     Revenue           
          $761 - $763 million             26%     
              $762 - $764 million    
          $761 - $765 million




     Collections       
          $828 - $831 million             26%     
              $830 - $833 million    
          $825 - $831 million



      Free Cash Flow    
          $124 - $126 million         22%-24%    
              $126 - $128 million    
          $123 - $126 million

Conference Call and Webcast Information

Wix will host a conference call at 8:30 a.m. ET on Thursday, November 14, 2019 to answer questions about the financial and operational performance of the business for the third quarter ended September 30, 2019. 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 +1-877-667-0467 (US/ Canada), +1-346-354-0953 (International) or 1-809-315-362 (Israel) at least ten minutes prior to the start time of the call and reference Conference ID 6392716. A telephonic replay of the call will be available through November 21, 2019 at 11:30 a.m. ET by dialing +1-855-859-2056 and providing Conference ID 6392716.

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 is leading the way with a cloud-based website development platform for over 160 million registered users worldwide today. The Wix website builder 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, artists, and individuals to take their businesses, brands and workflow online. The Wix Editor, Wix ADI, a highly curated App Market, Ascend by Wix and Corvid by Wix enable users to build and manage a fully integrated and dynamic digital presence. Wix's headquarters are in Tel Aviv with offices in Be'er Sheva, Berlin, Dnipro, Dublin, Kiev, Los Angeles, Miami, New York, San Francisco, São Paulo, Tokyo and Vilnius.

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 and free cash flow (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. 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.

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 "Reconciliation of GAAP to Non-GAAP Financial Measures" 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 has not reconciled its free cash flow guidance to net cash provided by operating activities because net cash provided by operating activities is not accessible on a forward-looking basis. Items that impact net cash provided by operating activities are out of the Company's control and/or cannot be reasonably predicted. Accordingly, a reconciliation to net cash provided by operating activities is not available without unreasonable effort. The Company has also not reconciled future collections over the next eight years from existing user cohorts. Items that impact future revenue and deferred revenue over an eight year period cannot be reasonably predicted. Accordingly, a reconciliation to revenue is not available without unreasonable effort.

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 the launch of our Wix Partner Program; 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, for example through our recent strategic partnership with NTT Town Page and our partnership with a Japanese payment provider, intended to expand our reach to customers in Japan; 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 2018 annual report on Form 20-F filed with the Securities and Exchange Commission on April 9, 2019. 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
investors.wix.com
ir@wix.com
914-267-7390

Media Relations:
Vivian Hernandez
Wix Press Room
pr@wix.com
415-517-6539


                                                                                           
              Wix.com Ltd.


                                                                                   
      CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP


                                                                                    
      (In thousands, except loss per share data)






                                                                                                                                     
         Three Months Ended              
       Nine Months Ended


                                                                                                                                       
         September 30,                   
       September 30,

                                                                                                                                                                                               ---

                                                                                                                                                2018                  2019                          2018         2019

                                                                                                                                                                                                               ---

                                                                                                                                   
         (unaudited)          
     (audited)       
              (unaudited)





     Revenue                                                                                                                               $155,600              $196,791                      $439,507     $556,500



     Cost of revenue                                                                                                                         32,977                53,295                        92,458      139,672

                                                                                                                                                                                                               ---


     Gross Profit                                                                                                                           122,623               143,496                       347,049      416,828





     Operating expenses:



     Research and development                                                                                                                49,360                64,488                       144,354      184,157



     Selling and marketing                                                                                                                   62,247                75,862                       188,113      232,909



     General and administrative                                                                                                              14,514                23,751                        43,039       62,320

                                                                                                                                                                                                               ---


     Total operating expenses                                                                                                               126,121               164,101                       375,506      479,386

                                                                                                                                                                                                               ---


     Operating loss                                                                                                                         (3,498)             (20,605)                     (28,457)    (62,558)



     Financial expenses, net                                                                                                                (2,509)                1,242                       (1,106)     (1,068)



     Other income (expenses)                                                                                                                     17                   117                           101          149

                                                                                                                                                                                                               ---


     Loss before taxes on income                                                                                                            (5,990)             (19,246)                     (29,462)    (63,477)



     Taxes on income                                                                                                                           (74)              (1,879)                        1,905        1,364



     Net loss                                                                                                                              $(5,916)            $(17,367)                    $(31,367)   $(64,841)






     Basic and diluted net loss per share                                                                                                   $(0.12)              $(0.34)                      $(0.66)     $(1.29)




     Basic and diluted weighted-average shares used to compute net loss per share                                                        48,498,392            50,862,253                    47,671,718   50,232,546

                                                                                                                                                                                                               ===




                                     
              Wix.com Ltd.


                         
              CONDENSED CONSOLIDATED BALANCE SHEET


                                    
              (In thousands)




                                                                         
      Period ended


                                                                         
      December 31,         
      September 30,



                                                                                            2018                     2019



     
     
                Assets                                                
      (audited)            
      (unaudited)


     
     Current Assets:


     
     Cash and cash equivalents                                                        $331,057                 $283,158


     
     Short term deposits                                                               349,619                  304,113


     
     Restricted cash and deposit                                                         1,149                    1,149


     
     Marketable securities                                                              22,992                  187,451


     
     Trade receivables                                                                  13,528                   16,201


     
     Prepaid expenses and other current assets                                          11,939                   27,229


     
      Total current assets                                                             730,284                  819,301





     
     Long Term Assets:


     
     Property and equipment, net                                                        21,947                   30,634


     
     Marketable securities                                                              47,225                   87,406


     
     Prepaid expenses and other long-term assets                                         3,065                    4,093


     
     Intangible assets and goodwill, net                                                42,229                   40,726


     
     Operating lease assets                                                                                     53,979


     
      Total long-term assets                                                           114,466                  216,838





     
      Total assets                                                                    $844,750               $1,036,139





     
     
                Liabilities and Shareholder's Equity


     
     Current Liabilities:


     
     Trade payables                                                                    $45,567                  $48,214


     
     Employees and payroll accruals                                                     32,036                   40,725


     
     Deferred revenues                                                                 227,226                  269,379


     
     Accrued expenses and other current liabilities                                     35,564                   47,410


     
     Operating lease liabilities                                                                                14,267


     
     Total current liabilities                                                         340,393                  419,995





     
     Long term deferred revenues                                                        12,494                   19,643


     
     Long term deferred tax liability                                                      602                      425


     
     Convertible senior notes                                                          337,777                  353,362


     
     Long term loan                                                                      1,219                    1,219


     
     Other long term liabilities                                                                                 2,482


     
     Long term operating lease liabilities                                                                      40,246


     
     Total long term liabilities                                                       352,092                  417,377





     
      Total liabilities                                                                692,485                  837,372





     
     Shareholders'  Equity


     
     Ordinary shares                                                                        88                       94


     
     Additional paid-in capital                                                        472,239                  580,519


     
     Other comprehensive loss                                                          (1,691)                   1,366


     
     Accumulated deficit                                                             (318,371)               (383,212)


     
     Total shareholders' equity                                                        152,265                  198,767





     
     Total liabilities and shareholders' equity                                       $844,750               $1,036,139


                                                                                                              
              Wix.com Ltd.


                                                                                                     
     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                                             
              (In thousands)






                                                                                                                                                       
           Three Months Ended             
         Nine Months Ended


                                                                                                                                                       
           September 30,                
       September 30,

                                                                                                                                                                                                        ---

                                                                                                                                                               2018                     2019                 2018                           2019

                                                                                                                                                                                                                                          ---

                                                                                                                                                        
           (unaudited)                 
       (audited)             
     (unaudited)



     OPERATING ACTIVITIES:



     Net loss                                                                                                                                             $(5,916)               $(17,367)           $(31,367)                     $(64,841)



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



     Depreciation                                                                                                                                            2,213                    3,194                6,306                          8,779



     Amortization                                                                                                                                              733                      733                2,052                          2,203



     Share based compensation expenses                                                                                                                      18,760                   28,392               52,203                         80,864



     Amortization of debt discount and debt issuance costs                                                                                                   4,965                    5,274                4,965                         15,585



     Decrease (increase) in accrued interest and exchange rate on short term and long term deposits                                                          (493)                     137              (1,390)                           731



     Amortization of premium and discount and accrued interest on marketable securities, net                                                                    74                    (140)                  86                           (99)



     Deferred income taxes, net                                                                                                                              (341)                   (346)               (746)                           187



     Decrease (increase) in trade receivables                                                                                                              (5,729)                   2,029              (3,005)                       (2,503)



     Decrease (increase) in prepaid expenses and other current and long-term assets                                                                          7,512                  (1,683)            (10,037)                      (12,824)



     Increase in trade payables                                                                                                                              2,184                    2,278                5,566                          3,606



     Increase (decrease) in employees and payroll accruals                                                                                                 (7,368)                     109                6,063                         12,344



     Increase in short term and long term deferred revenues                                                                                                  7,177                    9,069               42,820                         49,302



     Increase in accrued expenses and other current liabilities                                                                                              3,836                    4,394                6,138                         14,993



     Net cash provided by operating activities                                                                                                              27,607                   36,073               79,654                        108,327

                                                                                                                                                                                                                                          ---


     INVESTING ACTIVITIES:



     Proceeds from short-term deposits and restricted deposits                                                                                              96,015                  164,000              115,126                        245,775



     Investment in short-term deposits and restricted deposits                                                                                           (172,999)               (175,000)           (324,779)                     (203,100)



     Investment in marketable securities                                                                                                                  (37,678)               (127,967)            (52,657)                     (264,583)



     Proceeds from marketable securities                                                                                                                     1,357                   32,246               15,793                         61,302



     Purchase of property and equipment                                                                                                                    (3,865)                 (6,712)            (10,372)                      (17,777)



     Capitalization of software development costs                                                                                                             (51)                   (134)               (313)                         (523)



     Investment in other long-term assets                                                                                                                                                                (500)                             -



     Purchases of investments in privately-held companies                                                                                                                            (262)                                             (262)



     Payment for Businesses acquired                                                                                                                                                                                                   (700)



     Net cash used in investing activities                                                                                                               (117,221)               (113,829)           (257,702)                     (179,868)

                                                                                                                                                                                                                                          ---


     FINANCING ACTIVITIES:



     Proceeds from exercise of options and ESPP shares                                                                                                       6,082                    9,452               27,973                         23,642



     Proceeds from issuance of convertible senior notes                                                                                                     57,750                                      442,750                              -



     Payments of debt issuance costs                                                                                                                       (2,591)                                    (12,601)                             -



     Purchase of capped call                                                                                                                               (5,914)                                    (45,338)                             -



     Net cash provided by financing activities                                                                                                              55,327                    9,452              412,784                         23,642

                                                                                                                                                                                                                                          ---


     INCREASE IN CASH AND CASH EQUIVALENTS                                                                                                                (34,287)                (68,304)             234,736                       (47,899)



     CASH AND CASH EQUIVALENTS-Beginning of period                                                                                                         354,253                  351,462               85,230                        331,057



     CASH AND CASH EQUIVALENTS-End of period                                                                                                              $319,966                 $283,158             $319,966                       $283,158




                                                                                           
              Wix.com Ltd.


                                                                                      
              KEY PERFORMANCE METRICS


                                                                                          
              (In thousands)




                                                                                                                                                                               
           Three Months Ended      
           Nine Months Ended


                                                                                                                                                                                  
           September 30,          
           September 30,



                                                                                                                                                                                                          2018                               2019              2018                2019



                                                                                                                                                                                   
           (unaudited)            
           (unaudited)


     
              Revenues                                                                                                                                                                              $155,600                           $196,791          $439,507            $556,500


     
              Collections                                                                                                                                                                           $162,777                           $205,860          $482,327            $605,802


     
              Free Cash Flow                                                                                                                                                                         $23,691                            $29,227           $68,969             $90,027


     
              Number of registered users at period end (*)                                                                                                                                           136,538                            159,543           136,538             159,543


     
              Number of premium subscriptions at period end (*)                                                                                                                                        3,836                              4,410             3,836               4,410




     
              (*) Excludes users and subscriptions of DeviantArt






                                                                                           
              Wix.com Ltd.


                                                                             
              RECONCILIATION OF REVENUES TO COLLECTIONS


                                                                                          
              (In thousands)




                                                                                                                                                                               
           Three Months Ended      
           Nine Months Ended


                                                                                                                                                                                  
           September 30,          
           September 30,



                                                                                                                                                                                                          2018                               2019              2018                2019



                                                                                                                                                                                   
           (unaudited)            
           (unaudited)


     
              Revenues                                                                                                                                                                              $155,600                           $196,791          $439,507            $556,500


     
              Change in deferred revenues                                                                                                                                                              7,177                              9,069            42,820              49,302


     
              Collections                                                                                                                                                                           $162,777                           $205,860          $482,327            $605,802









                                                                                           
              Wix.com Ltd.


                                                                                
              TOTAL ADJUSTMENTS GAAP TO NON-GAAP


                                                                                          
              (In thousands)






                                                                                                                                                                               
           Three Months Ended      
           Nine Months Ended


                                                                                                                                                                                  
           September 30,          
           September 30,



                                                                                                                                                                                                          2018                               2019              2018                2019



     
              (1) Share based compensation expenses:                                                                                                                             
           (unaudited)            
           (unaudited)


     
              Cost of revenues                                                                                                                                                                        $1,102                             $1,525            $3,268              $4,272


     
              Research and development                                                                                                                                                                10,372                             14,886            28,327              41,261


     
              Selling and marketing                                                                                                                                                                    2,597                              4,590             6,991              13,844


     
              General and administrative                                                                                                                                                               4,689                              7,391            13,617              21,487


     
              Total share based compensation expenses                                                                                                                                                 18,760                             28,392            52,203              80,864



     
              (2) Amortization                                                                                                                                                                           733                                733             2,052               2,203


     
              (3) Acquisition related expenses                                                                                                                                                           261                                564             2,635                 617


     
              (4) Amortization of debt discount and debt issuance costs                                                                                                                                4,965                              5,274             4,965              15,585


     
              (5) Sales tax accrual                                                                                                                                                                                                      3,174                                3,174


     
              (6) Non-operating foreign exchange expenses (income)                                                                                                                                                                          56                                1,648


     
              Total adjustments of GAAP to Non GAAP                                                                                                                                                  $24,719                            $38,193           $61,855            $104,091









                                                                                           
              Wix.com Ltd.


                                                                          
              RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT


                                                                                          
              (In thousands)






                                                                                                                                                                               
           Three Months Ended      
           Nine Months Ended


                                                                                                                                                                                  
           September 30,          
           September 30,



                                                                                                                                                                                                          2018                               2019              2018                2019



                                                                                                                                                                                   
           (unaudited)            
           (unaudited)


     
              Gross Profit                                                                                                                                                                          $122,623                           $143,496          $347,049            $416,828


     
              Share based compensation expenses                                                                                                                                                        1,102                              1,525             3,268               4,272


     
              Amortization                                                                                                                                                                               142                                142               426                 425


     
              Non GAAP Gross Profit                                                                                                                                                                  123,867                            145,163           350,743             421,525





     
              Non GAAP Gross margin                                                                                                                                                                      80%                               74%              80%                76%








                                                                                           
              Wix.com Ltd.


                                                                   
              RECONCILIATION OF OPERATING LOSS TO NON-GAAP OPERATING INCOME


                                                                                          
              (In thousands)




                                                                                                                                                                               
           Three Months Ended      
           Nine Months Ended


                                                                                                                                                                                  
           September 30,          
           September 30,



                                                                                                                                                                                                          2018                               2019              2018                2019



                                                                                                                                                                                   
           (unaudited)            
           (unaudited)


     
              Operating loss                                                                                                                                                                        $(3,498)                         $(20,605)        $(28,457)          $(62,558)


     
              Adjustments:


     
              Share based compensation expenses                                                                                                                                                       18,760                             28,392            52,203              80,864


     
              Amortization                                                                                                                                                                               733                                733             2,052               2,203


     
              Sales tax accrual                                                                                                                                                                                                          3,174                                3,174


     
              Acquisition related expenses                                                                                                                                                               261                                564             2,635                 617


     
              Total adjustments                                                                                                                                                                      $19,754                            $32,863           $56,890             $86,858





     
              Non GAAP operating income                                                                                                                                                              $16,256                            $12,258           $28,433             $24,300







                                                                                           
              Wix.com Ltd.


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


                                                                              
              (In thousands, except  per share data)




                                                                                                                                                                               
           Three Months Ended      
           Nine Months Ended


                                                                                                                                                                                  
           September 30,          
           September 30,



                                                                                                                                                                                                          2018                               2019              2018                2019



                                                                                                                                                                                   
           (unaudited)            
           (unaudited)


     
              Net loss                                                                                                                                                                              $(5,916)                         $(17,367)        $(31,367)          $(64,841)


     
              Share based compensation expense and other Non GAAP adjustments                                                                                                                         24,719                             38,193            61,855             104,091


     
              Non-GAAP net income                                                                                                                                                                    $18,803                            $20,826           $30,488             $39,250





     
              Basic  Non GAAP net income per share                                                                                                                                                     $0.39                              $0.41             $0.64               $0.78



     
              Weighted average shares used in computing basic Non GAAP net income\ per share                                                                                                      48,498,392                         50,862,253        47,671,718          50,232,546









                                                                                           
              Wix.com Ltd.


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


                                                                                          
              (In thousands)




                                                                                                                                                                               
           Three Months Ended      
           Nine Months Ended


                                                                                                                                                                                  
           September 30,          
           September 30,



                                                                                                                                                                                                          2018                               2019              2018                2019



                                                                                                                                                                                   
           (unaudited)            
           (unaudited)


     
              Net cash provided by operating activities                                                                                                                                              $27,607                            $36,073           $79,654            $108,327


     
              Capital expenditures, net                                                                                                                                                              (3,916)                           (6,846)         (10,685)           (18,300)


     
              Free Cash Flow                                                                                                                                                                         $23,691                            $29,227           $68,969             $90,027















                                                                                           
              Wix.com Ltd.


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






                                                                                                                                                                               
           Three Months Ended      
           Nine Months Ended


                                                                                                                                                                                  
           September 30,          
           September 30,



                                                                                                                                                                                                          2018                               2019              2018                2019



                                                                                                                                                                                   
           (unaudited)            
           (unaudited)




     
              Basic and diluted weighted average number of shares outstanding                                                                                                                     48,498,392                         50,862,253        47,671,718          50,232,546



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


     
              Stock options                                                                                                                                                                        7,714,715                          7,571,765         7,714,715           7,571,765


     
              Restricted share units                                                                                                                                                               2,051,910                          2,231,470         2,051,910           2,231,470


                                                                                                                                                                                                    58,265,017                         60,665,488        57,438,343          60,035,781









                                                                                           
              Wix.com Ltd.


                                                                   
              RECONCILIATION OF PROJECTED REVENUES TO PROJECTED COLLECTIONS


                                                                                          
              (In thousands)




                                                                                                                                                                               
           Three Months Ended          
           YearEnding


                                                                                                                                                                                
           December 31, 2019      
           December 31, 2019



                                                                                                                                                                                     
             Low                   
            High                
     Low             
     High





     
              Projected revenues                                                                                                                                                                     204,000                            206,000           761,000             763,000


     
              Projected change in deferred revenues                                                                                                                                                   18,000                             19,000            67,000              68,000


     
              Projected collections                                                                                                                                                                 $222,000                           $225,000          $828,000            $831,000







                                                                                           
              Wix.com Ltd.


                                                      
              RECONCILIATION OF PROJECTED REVENUES TO PROJECTED COLLECTIONS (FX NEUTRAL TO JULY 2019)


                                                                                          
              (In thousands)




                                                                                                                                                                                                                   
           YearEnding


                                                                                                                                                                                                               
           December 31, 2019



                                                                                                                                                                                                                                                  
     Low             
     High





     
              Projected revenues                                                                                                                                                                                                                        762,000             764,000


     
              Projected change in deferred revenues                                                                                                                                                                                                      68,000              69,000


     
              Projected collections                                                                                                                                                                                                                    $830,000            $833,000





                                                                                           
              Wix.com Ltd.


                                                      
              RECONCILIATION OF PROJECTED REVENUES TO PROJECTED COLLECTIONS (FX NEUTRAL 2018 TO 2019)


                                                                                          
              (In thousands)




                                                                                                                                                                                                                   
           YearEnding


                                                                                                                                                                                                               
           December 31, 2019



                                                                                                                                                                                                                                                  
     Low             
     High





     
              Projected revenues                                                                                                                                                                                                                        771,000             773,000


     
              Projected change in deferred revenues                                                                                                                                                                                                      69,000              70,000


     
              Projected collections                                                                                                                                                                                                                    $840,000            $843,000

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SOURCE Wix.com Ltd.