NEW YORK, Nov. 13, 2018 /PRNewswire/ -- Wix.com Ltd. (Nasdaq: WIX), a leading cloud-based web development platform, today reported financial results for the third quarter ended September 30, 2018. In addition, the Company provided its initial outlook for the fourth quarter of 2018 and updated its 2018 full year guidance.
"Our strong third quarter results demonstrate that we continue to develop a product experience on Wix that is best in class," said Avishai Abrahami, Co-founder and CEO of Wix. "Wix is in the midst of another substantial product release cycle to deliver even more value to our users ? we recently introduced Wix Payments, as well as enhancements to Wix Code and the all new Wix Video Maker, and we have begun releasing the new DeviantArt platform to its community. We also plan to announce a new product in December that will elevate how small businesses are managed and grow online. With these new products, and the performance we have seen to date, we look forward to continuing our momentum throughout 2019."
Lior Shemesh, CFO of Wix, added "Our business model is a unique combination of strong top line growth and improving profitability, which was again demonstrated with our third quarter results. These results are also a reflection of the strong returns we continue to realize on our investments in R&D and marketing as well as the consistency and predictability of our business."
Q3 2018 Financial Summary
Three months ended Sept 30, | |||||||
$ in thousands | 2017 | 2018 | Y/Y growth | Prior Q3 2018 | |||
Revenue | $111,031 | $155,600 | 40% | $152,000 - 153,000 | |||
Collections | $120,119 | $162,777 | 36% | $161,000 - 162,000 | |||
Operating Loss | ($11,454) | ($3,498) | NA | ||||
Non-GAAP Operating | $3,418 | $16,256 | 376% | ||||
Net Cash Provided by | $22,063 | $27,607 | 25% | ||||
Free Cash Flow | $18,935 | $23,691 | 25% | ||||
Additional Q3 2018 Results and Highlights
Recent Business Highlights
Financial Outlook
Wix is introducing its outlook for the fourth quarter of 2018 as follows:
Q4 2018 Outlook | Y/Y growth | ||
Revenue | $161- $162 million | 36% ? 37% | |
Collections | $176 - $178 million | 33% ? 35% | |
Wix is updating its outlook for the full year 2018, which reflects the continued decline in foreign exchange rates since guidance was last provided in July. Had FX rates stayed constant, we would have raised the collections and free cash flow outlook by approximately $2 million, or $660-$662 million for collections and $103-$105 million for free cash flow.
2018 Outlook | |||||
Prior | Updated | Y/Y growth | |||
Revenue | $597 - $599 million | $601 - $602 million | 41% | ||
Collections | $656 - $660 million | $658 - $660 million | 36% | ||
Free Cash Flow | $101 - $103 million | $101- $103 million | 43% ? 46% | ||
Conference Call and Webcast Information
Wix will host a conference call at 5:00 p.m. ET on Tuesday, November 13, 2018 to answer questions about the financial and operational performance of the business during the third quarter of 2018. 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 866-966-5335 (US/Canada), +44-203-003-2666 (International) or 1-809-216-213 (Israel) at least ten minutes prior to the start time of the call and reference Conference ID WIX. A telephonic replay of the call will be available through November 20, 2018 at 11:59 p.m. ET by dialing +44-(0)-208-196-1998 and providing Conference ID 84853377.
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 development platform for over 139 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, artists, and individuals to take their businesses, brands and workflow online. The Wix Editor, Wix ADI, a highly curated App Market, and Wix Code 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, and Vilnius.
Visit us: on our blog, Facebook, Twitter, Instagram, LinkedIn, Pinterest and Google+
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, non-GAAP gross margin, non-GAAP operating income (loss), free cash flow, non-GAAP net income (loss) and non-GAAP net income (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. 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, and acquisition-related expenses. Non-GAAP net income (loss) represents net loss calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, amortization, amortization of debt discount and debt issuance costs, and acquisition-related expenses. 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 the tables included with this press release. 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.
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, including, but not limited to revenue, collections and free cash flow, the availability, merchantability or functionality of certain new products or features and their anticipated product demand and customer satisfaction, 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, 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; our ability to maintain and enhance our brand and reputation; our prediction of the future collections generated by our user cohorts; 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; customer acceptance of new products and other challenges inherent in new product development, 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 2017 annual report on Form 20-F filed with the Securities and Exchange Commission on March 29, 2018. 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
[email protected]
415-223-2624
Media Relations:
Vivian Hernandez
[email protected]
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, | ||||||
2017 | 2018 | 2017 | 2018 | ||||
(unaudited) | (unaudited) | ||||||
Revenue | $ 111,031 | $ 155,600 | $ 307,091 | $ 439,507 | |||
Cost of revenue | 18,827 | 32,977 | 51,715 | 92,458 | |||
Gross Profit | 92,204 | 122,623 | 255,376 | 347,049 | |||
Operating expenses: | |||||||
Research and development | 40,252 | 49,360 | 109,670 | 144,354 | |||
Selling and marketing | 51,184 | 62,247 | 153,529 | 188,113 | |||
General and administrative | 12,222 | 14,514 | 34,665 | 43,039 | |||
Total operating expenses | 103,658 | 126,121 | 297,864 | 375,506 | |||
Operating loss | (11,454) | (3,498) | (42,488) | (28,457) | |||
Financial expenses, net | (1,978) | (2,509) | (3,873) | (1,106) | |||
Other income (expenses) | (4) | 17 | (3) | 101 | |||
Loss before taxes on income | (13,436) | (5,990) | (46,364) | (29,462) | |||
Taxes on income | 1,083 | (74) | 3,304 | 1,905 | |||
Net loss | $ (14,519) | $ (5,916) | $ (49,668) | $ (31,367) | |||
Basic and diluted net loss per share | $ (0.32) | $ (0.12) | $ (1.10) | $ (0.66) | |||
Basic and diluted weighted-average shares used to compute net loss per share | 45,843,390 | 48,498,392 | 45,309,940 | 47,671,718 |
Wix.com Ltd. | |||
CONDENSED CONSOLIDATED BALANCE SHEET | |||
(In thousands) | |||
Period ended | |||
December 31, | September 30, | ||
2017 | 2018 | ||
Assets | (audited) | (unaudited) | |
Current Assets: | |||
Cash and cash equivalents | $ 85,230 | $ 319,966 | |
Short term deposits | 115,382 | 326,425 | |
Restricted cash and deposit | 949 | 949 | |
Marketable securities | 32,730 | 69,237 | |
Trade receivables | 11,400 | 14,405 | |
Prepaid expenses and other current assets | 19,246 | 18,304 | |
Total current assets | 264,937 | 749,286 | |
Property, equipment and software, net | |||
Long Term Assets: | |||
Property and equipment, net | 16,201 | 20,638 | |
Prepaid expenses and other long-term assets | 3,823 | 1,724 | |
Intangible assets and goodwill, net | 45,052 | 42,961 | |
Total long-term assets | 65,076 | 65,323 | |
Total assets | $ 330,013 | $ 814,609 | |
Liabilities and Shareholder's Equity | |||
Current Liabilities: | |||
Trade payables | $ 34,240 | $ 39,864 | |
Employees and payroll accruals | 28,067 | 31,101 | |
Deferred revenues | 202,482 | 219,555 | |
Accrued expenses and other current liabilities | 37,592 | 43,444 | |
Total current liabilities | 302,381 | 333,964 | |
Long term deferred revenues | 14,329 | 11,923 | |
Long term deferred tax liability | 764 | 642 | |
Convertible senior notes | - | 332,738 | |
Long term loan | 1,219 | 1,219 | |
Total long term liabilities | 16,312 | 346,522 | |
Total liabilities | 318,693 | 680,486 | |
Shareholders' Equity | |||
Ordinary shares | 80 | 87 | |
Additional paid-in capital | 311,107 | 451,345 | |
Other comprehensive loss | (286) | (1,072) | |
Accumulated deficit | (299,581) | (316,237) | |
Total shareholders' equity | 11,320 | 134,123 | |
Total liabilities and shareholders' equity | $ 330,013 | $ 814,609 |
Wix.com Ltd. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(In thousands) | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
2017 | 2018 | 2017 | 2018 | ||||
(unaudited) | (unaudited) | ||||||
OPERATING ACTIVITIES: | |||||||
Net loss | $ (14,519) | $ (5,916) | $ (49,668) | $ (31,367) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation | 1,451 | 2,213 | 4,094 | 6,306 | |||
Amortization | 950 | 733 | 2,412 | 2,052 | |||
Share based compensation expenses | 13,035 | 18,760 | 33,996 | 52,203 | |||
Amortization of debt discount and debt issuance costs | - | 4,965 | - | 4,965 | |||
Increase in accrued interest and exchange rate on short term and long term deposits | 7 | (493) | (160) | (1,390) | |||
Amortization of premium and discount and accrued interest on marketable securities, net | - | 74 | - | 86 | |||
Deferred income taxes, net | (44) | (341) | (441) | (746) | |||
Decrease in trade receivables | (2,834) | (5,729) | (2,074) | (3,005) | |||
Decrease (increase) in prepaid expenses and other current and long-term assets | 441 | 7,512 | (2,729) | (10,037) | |||
Increase in trade payables | 12,320 | 2,184 | 18,979 | 5,566 | |||
Increase (decrease) in employees and payroll accruals | (123) | (7,368) | (328) | 6,063 | |||
Increase in short term and long term deferred revenues | 9,088 | 7,177 | 44,695 | 42,820 | |||
Increase in accrued expenses and other current liabilities | 2,291 | 3,836 | 9,335 | 6,138 | |||
Net cash provided by operating activities | 22,063 | 27,607 | 58,111 | 79,654 | |||
INVESTING ACTIVITIES: | |||||||
Proceeds from short-term deposits and restricted deposits | 17,392 | 96,015 | 50,442 | 115,126 | |||
Investment in short-term deposits and restricted deposits | (41,000) | (172,999) | (56,650) | (324,779) | |||
Investment in marketable securities | - | (37,678) | - | (52,657) | |||
Proceeds from marketable securities | - | 1,357 | - | 15,793 | |||
Purchase of property and equipment | (3,128) | (3,865) | (6,983) | (10,372) | |||
Capitalization of software development costs | - | (51) | - | (313) | |||
Acquisition of Intangible assets | - | - | - | (500) | |||
Payment for Businesses acquired | - | - | (33,091) | - | |||
Net cash used in investing activities | (26,736) | (117,221) | (46,282) | (257,702) | |||
FINANCING ACTIVITIES: | |||||||
Proceeds from exercise of options and ESPP shares | 4,444 | 6,082 | 19,180 | 27,973 | |||
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) | |||
Credit line repayment | - | - | (170) | - | |||
Net cash provided by financing activities | 4,444 | 55,327 | 19,010 | 412,784 | |||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (229) | (34,287) | 30,839 | 234,736 | |||
CASH AND CASH EQUIVALENTS?Beginning of period | 124,132 | 354,253 | 93,064 | 85,230 | |||
CASH AND CASH EQUIVALENTS?End of period | $ 123,903 | $ 319,966 | $ 123,903 | $ 319,966 | |||
Wix.com Ltd. | |||||||
KEY PERFORMANCE METRICS | |||||||
(In thousands) | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
2017 | 2018 | 2017 | 2018 | ||||
(unaudited) | (unaudited) | ||||||
Revenues | $ 111,031 | $ 155,600 | $ 307,091 | $ 439,507 | |||
Collections | $ 120,119 | $ 162,777 | $ 351,786 | $ 482,327 | |||
Free Cash Flow | $ 18,935 | $ 23,691 | $ 53,866 | $ 68,969 | |||
Number of registered users at period end (*) | 113,923 | 136,538 | 113,923 | 136,538 | |||
Number of premium subscriptions at period end (*) | 3,053 | 3,836 | 3,053 | 3,836 | |||
(*) 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, | ||||||
2017 | 2018 | 2017 | 2018 | ||||
(unaudited) | (unaudited) | ||||||
Revenues | $ 111,031 | $ 155,600 | $ 307,091 | $ 439,507 | |||
Change in deferred revenues | 9,088 | 7,177 | 44,695 | 42,820 | |||
Collections | $ 120,119 | $ 162,777 | $ 351,786 | $ 482,327 | |||
TOTAL ADJUSTMENTS OF GAAP TO NON-GAAP | |||||||
(In thousands) | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
2017 | 2018 | 2017 | 2018 | ||||
(1) Share based compensation expenses: | (unaudited) | (unaudited) | |||||
Cost of revenues | $ 783 | $ 1,102 | $ 1,984 | $ 3,268 | |||
Research and development | 7,190 | 10,372 | 18,502 | 28,327 | |||
Selling and marketing | 1,826 | 2,597 | 5,023 | 6,991 | |||
General and administrative | 3,236 | 4,689 | 8,487 | 13,617 | |||
Total share based compensation expenses | 13,035 | 18,760 | 33,996 | 52,203 | |||
(2) Amortization | 948 | 733 | 2,374 | 2,052 | |||
(3) Acquisition related expenses | 889 | 261 | 5,514 | 2,635 | |||
(4) Amortization of debt discount and debt issuance costs | - | 4,965 | - | 4,965 | |||
Total adjustments of GAAP to Non-GAAP | $ 14,872 | $ 24,719 | $ 41,884 | $ 61,855 | |||
Wix.com Ltd. | |||||||
RECONCILIATION OF GROSS PROFIT TO NON-GAAP GROSS PROFIT | |||||||
(In thousands) | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
2017 | 2018 | 2017 | 2018 | ||||
(unaudited) | (unaudited) | ||||||
Gross Profit | $ 92,204 | $ 122,623 | $ 255,376 | $ 347,049 | |||
Share based compensation expenses | 783 | 1,102 | 1,984 | 3,268 | |||
Amortization | 757 | 142 | 1,797 | 426 | |||
Acquisition related expenses | - | - | 28 | - | |||
Non-GAAP Gross Profit | 93,744 | 123,867 | 259,185 | 350,743 | |||
Non-GAAP Gross margin | 84% | 80% | 84% | 80% | |||
Wix.com Ltd. | |||||||
RECONCILIATION OF OPERATING LOSS TO NON-GAAP OPERATING INCOME (LOSS) | |||||||
(In thousands) | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
2017 | 2018 | 2017 | 2018 | ||||
(unaudited) | (unaudited) | ||||||
Operating loss | $ (11,454) | $ (3,498) | $ (42,488) | $ (28,457) | |||
Adjustments: | |||||||
Share based compensation expenses | 13,035 | 18,760 | 33,996 | 52,203 | |||
Amortization | 948 | 733 | 2,374 | 2,052 | |||
Acquisition related expenses | 889 | 261 | 5,514 | 2,635 | |||
Total adjustments | $ 14,872 | $ 19,754 | $ 41,884 | $ 56,890 | |||
Non-GAAP operating income (loss) | $ 3,418 | $ 16,256 | $ (604) | $ 28,433 | |||
Wix.com Ltd. | |||||||
RECONCILIATION OF NET LOSS TO NON-GAAP NET INCOME (LOSS) AND NON-GAAP NET INCOME (LOSS) PER SHARE | |||||||
(In thousands, except per share data) | |||||||
Three Months Ended | Nine Months Ended | ||||||
September 30, | September 30, | ||||||
2017 | 2018 | 2017 | 2018 | ||||
(unaudited) | (unaudited) | ||||||
Net loss | $ (14,519) | $ (5,916) | $ (49,668) | $ (31,367) | |||
Share based compensation expense and other Non GAAP adjustments | 14,872 | 24,719 | 41,884 | 61,855 | |||
Non-GAAP net income (loss) | $ 353 | $ 18,803 | $ (7,784) | $ 30,488 | |||
Basic Non-GAAP net income (loss) per share | $ 0.01 | $ 0.39 | $ (0.17) | $ 0.64 | |||
Weighted average shares used in computing basic Non-GAAP net income (loss) per share | 45,843,390 | 48,498,392 | 45,309,940 | 47,671,718 | |||
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, | ||||||
2017 | 2018 | 2017 | 2018 | ||||
(unaudited) | (unaudited) | ||||||
Net cash provided by operating activities | $ 22,063 | $ 27,607 | $ 58,111 | $ 79,654 | |||
Capital expenditures, net | (3,128) | (3,916) | (6,983) | (10,685) | |||
DeviantArt acquisition costs | - | - | 2,738 | - | |||
Free Cash Flow | $ 18,935 | $ 23,691 | $ 53,866 | $ 68,969 |
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, | ||||||
2017 | 2018 | 2017 | 2018 | ||||
(unaudited) | (unaudited) | ||||||
Basic and diluted weighted average number of shares outstanding | 45,843,390 | 48,498,392 | 45,309,940 | 47,671,718 | |||
The following items have been excluded from the diluted weighted average number of shares | |||||||
Stock options | 8,336,919 | 7,714,715 | 8,336,919 | 7,714,715 | |||
Restricted share units | 1,968,870 | 2,051,910 | 1,968,870 | 2,051,910 | |||
56,149,179 | 58,265,017 | 55,615,729 | 57,438,343 | ||||
Wix.com Ltd. | |||||||
RECONCILIATION OF PROJECTED REVENUES TO PROJECTED COLLECTIONS | |||||||
(In thousands) | |||||||
Three Months Ended | YearEnding | ||||||
December 31, 2018 | December 31, 2018 | ||||||
Low | High | Low | High | ||||
Projected revenues (*) | 161,000 | 162,000 | 601,000 | 602,000 | |||
Projected change in deferred revenues | 15,000 | 16,000 | 57,000 | 58,000 | |||
Projected collections | $ 176,000 | $ 178,000 | $ 658,000 | $ 660,000 | |||
(*) Guidance under ASC 606 |
SOURCE Wix.com Ltd.
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