OREANDA-NEWS. 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

  • Collections on a constant currency basis, which excludes the impact of approximately$1.8 million related to year-over-year changes in foreign exchange rates, would have been$77.5 million, an increase of 39% versus the prior year 
    • Collections on a reported basis increased 35% to $75.7 million compared to $55.9 million for the first quarter last year
  • Revenue on constant currency basis, which excludes the impact of approximately$1.1 million related to year-over-year changes in foreign exchange rates, would have been$62.7 million, an increase of 41% versus the prior year 
    • Reported GAAP revenue increased 38% to $61.6 million compared to $44.5 million for the first quarter last year
  • Gross margin on non-GAAP basis was 84% compared to 83% in the first quarter of last year
  • GAAP net loss was $19.9 million, or $(0.49) per share, compared to a net loss of $16.0 million, or $(0.41) per share, for the first quarter of 2015
  • Non-GAAP net loss was $12.2 million, or $(0.30) per share, compared to a non-GAAP net loss of $11.7 million, or $(0.30) per share, for the first quarter of 2015
  • Adjusted EBITDA was $2.7 million compared to $(0.5) million for the first quarter of 2015
  • Free cash flow improved to $(2.1) million compared to $(2.7) million for the first quarter of 2015
  • Added a record 170,000 net premium subscriptions in the period to reach 1.94 million as of March 31, 2016, a 41% increase over the first quarter of 2015
  • Added a record 5.3 million registered users in the first quarter. Registered users as of March 31, 2016 were 82 million, representing a 32% increase compared to the first quarter of 2015

Recent Business Highlights

  • Launched Wix Restaurants:  Wix launched Wix Restaurants, the first online order management product enabling restaurant owners to build and manage their business online, eliminating the reliance on commission-based food ordering marketplaces. Wix Restaurants provides a suite of products to address the unique needs of restaurants including online menus, commission-free online ordering, enhanced payment options, CRM capabilities, and tailored websites.
  • Recognized as Google Apps Online Partner of the Year:  Wix was recognized by Google for Work as its Google Apps Online Partner of the Year for 2015 for its efforts in promoting and marketing Google Apps through the Wix platform.  Wix continues to enable small businesses and organizations to communicate and collaborate with a suite of cloud-based productivity tools, such as e-mail, document management and storage as they move their operations online.  This marks the second consecutive year Wix was recognized by Google for Work as a top partner.
  • Launched global partnership with City Football Group:  Wix became City Football Group’s Official Website Design & Hosting Partner for its clubs Manchester City FC, New York City FC and Melbourne City FC. The partnership provides Wix with branding and sponsorship opportunities on match days at the Etihad Stadium – home of Manchester City FC – and fans of all three clubs the opportunity to engage with Wix’s innovative design platform. The first fan engagement activity encouraged fans to create videos to feature on the official website for Sergio Aguero created in partnership with Wix.
  • Wix Mobile Growth:  Over 15.7 million mobile sites have been created on the Wix platform to date, making Wix among the largest mobile site development platforms globally.
  • Increasing Platform Engagement:  Continued engagement with the Wix ecosystem illustrated by over 290 million contacts saved onto the Wix platform.  Leveraging Wix’s MyAccount CRM system, users track customer activity data, manage relationships and communicate using WixShoutOut.

       
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: 

  • For the second quarter of 2016:
  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
       
  • For the full year 2016:
  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%
           

 

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.

 

           
  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