6-K
Wix.com Ltd. (WIX)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of August 2020
Commission File Number: 001-36158
Wix.com Ltd.
(Translation of registrant’s name into English)
40 Namal Tel Aviv St.,
Tel Aviv 6350671, Israel
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ⌧ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): __
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): __
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ☐ No ⌧
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-________
EXPLANATORY NOTE
On August 6, 2020, Wix.com Ltd. (NASDAQ: WIX) (the “Company”) issued a press release titled “Wix Reports Outstanding Second Quarter 2020 Results”. A copy of this press release is attached to this Form 6-K as Exhibit 99.1.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| WIX.COM LTD. | ||
|---|---|---|
| Date: August 6, 2020 | By: | /s/ Eitan Israeli |
| Name: Eitan Israeli | ||
| Title: VP & General Counsel |
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EXHIBIT INDEX
The following exhibit is filed as part of this Form 6-K:
| Exhibit<br><br> <br><br><br> <br>99.1 | Description<br><br> <br><br><br> <br>Press<br> release dated August 6, 2020 titled “Wix Reports Outstanding Second Quarter 2020 Results”. |
|---|
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Exhibit 99.1
Wix Reports Outstanding Second Quarter 2020 Results
| ● | Momentum across the platform led to a record breaking quarter |
|---|---|
| o | Added over 9.3 million registered users in Q2, an increase of 64% y/y |
| --- | --- |
| o | Revenue of $236.1 million, up 27% y/y; 28% y/y on a y/y constant currency basis |
| --- | --- |
| o | Collections of $265.9 million, up 33% y/y; 35% y/y on a y/y constant currency basis |
| --- | --- |
| o | Creative Subscriptions ARR increased 22% y/y to $790.9 million as of Q2 |
| --- | --- |
| o | Net subscriptions additions of 346,000 in Q2, bringing total premium subscriptions to over 5 million; total net additions in 1H 2020 nearly as much as all of 2019 |
| --- | --- |
| ● | July 2020 results show strong growth continuing in Q3 |
| --- | --- |
| ● | Responding swiftly to opportunity with increasing marketing investment as the need for online creation and commerce rapidly grows |
| --- | --- |
| o | Investing capital into growth demonstrated by future collections of the Q2 user cohort over the next 8 years expected to be approximately 90% higher than the prior<br> year’s cohort |
| --- | --- |
| ● | Continued execution with significant product launches: expanded eCommerce capabilities and Editor X public release delivered on time to further help users create and<br> grow online |
| --- | --- |
| ● | Initiating Q3 outlook for revenue and collections, reflecting sustained momentum -- expecting revenue growth of 26-27% y/y and collections growth of 31-34% y/y in Q3 |
| --- | --- |
NEW YORK, August 6, 2020 -- Wix.com Ltd. (Nasdaq: WIX) today reported strong financial results for the second quarter ended June 30, 2020, exceeding the high end of its guidance ranges for both revenue and collections. In addition, the Company provided its initial outlook for the third quarter of 2020.
“The trends that began in late March continued throughout the second quarter, driving record-setting results,” said Avishai Abrahami, Co-founder and CEO of Wix. “The need for business owners to move online quickly, communicate with customers, and deliver goods and services has never been more imminent, and the Wix platform continues to provide millions of users with the ability to thrive during these unprecedented times. Our focus remains on the success of our users, and we continue to deliver innovative products and technology, marked this quarter by the public launch of Editor X and our expanded eCommerce offering.”
Nir Zohar, President and COO of Wix added, “Throughout the second quarter, we continued to experience positive trends as a result of continued economic disruption globally. Our results in July tell us that these trends are continuing, potentially indicating a new baseline of growth for our business. We will continue to support our users in their needs so they can be successful throughout the ongoing disruptions to their lives and businesses.”
Lior Shemesh, CFO of Wix said, “Our business has seen an immense uplift in demand in recent months, driven by the rapidly increasing importance of having an online presence. We added a record 9.3 million users and 346,000 net premium subscriptions in the second quarter, reflecting this strong demand and our ability to meet the needs of our users. We are responding to this continued heightened demand by increasing our investment in marketing, which based on our historical data, will drive continued collections and revenue growth in the near future.”
Q2 2020 Financial Results
| ● | Total revenue in the second quarter of 2020 was $236.1 million, compared to $185.4 million in the second quarter of 2019, an increase of 27% y/y |
|---|---|
| o | On a y/y constant currency basis, Q2 revenue would have been $237.9 million, up 28% y/y |
| --- | --- |
| o | Creative Subscriptions revenue in the second quarter of 2020 was $190.2 million, compared to $157.0 million in the second quarter of 2019, an increase of 21% y/y |
| --- | --- |
| o | Business Solutions revenue in the second quarter of 2020 was $45.9 million, compared to $28.4 million in the second quarter of 2019, an increase of 62% y/y |
| --- | --- |
| ● | Creative Subscriptions ARR was $790.9 million in the second quarter of 2020, compared to $648.2 million in the second quarter of 2019, an increase of 22% y/y |
| --- | --- |
| ● | Total collections in the second quarter of 2020 were $265.9 million, compared to $199.6 million in the second quarter of 2019, an increase of 33% y/y |
| --- | --- |
| o | On a y/y constant currency basis, Q2 collections would have been $269.8 million, up 35% y/y |
| --- | --- |
| o | Creative Subscriptions collections in the second quarter of 2020 were $217.7 million, compared to $170.5 million in the second quarter of 2019, an increase of 28% y/y |
| --- | --- |
| o | Business Solutions collections in the second quarter of 2020 was $48.2 million, compared to $29.1 million in the second quarter of 2019, an increase of 66% y/y |
| --- | --- |
| ● | Our Q2 user cohort generated $10 million in revenue and $38 million in collections in Q2, which are 66% higher than the year ago cohort. Users purchased Business and<br> eCommerce subscription packages and annual and multi-year packages at a higher frequency |
| --- | --- |
| ● | Total gross margin on a GAAP basis in the second quarter of 2020 was 70%, compared to 75% in the second quarter of 2019. Total GAAP gross margin declined y/y due to<br> incremental investments in Customer Care and sequentially due to the faster revenue growth of the Business Solutions segment |
| --- | --- |
| o | Creative Subscriptions gross margin on a GAAP basis was 80%, compared to 81% in the second quarter of 2019. The y/y decline was related to the investment in expanding<br> our Customer Care organization |
|---|---|
| o | Business Solutions gross margin on a GAAP basis was 30% compared to 39% in the second quarter of 2019. The decline was related primarily to the growth of Wix Payments<br> and the expansion of Customer Care |
| --- | --- |
| ● | Total non-GAAP gross margin in the second quarter of 2020, calculated as non-GAAP gross profit as a percent of revenue, was 71%, compared to 76% in the second quarter<br> of 2019. Total non-GAAP gross margin declined y/y due to incremental investments in Customer Care and sequentially due to the faster revenue growth of the Business Solutions segment |
| --- | --- |
| o | Creative Subscriptions gross margin on a non-GAAP basis was 81%, compared to 82% in the second quarter of 2019. The y/y decline was related to the investment in<br> expanding our Customer Care organization |
| --- | --- |
| o | Business Solutions gross margin on a non-GAAP basis was 32%, compared to 40% in the second quarter of 2019. The decline was related primarily to the growth of Wix<br> Payments and the expansion of Customer Care |
| --- | --- |
| ● | GAAP net loss in the second quarter of 2020 was $(57.7) million, or $(1.06) per share, compared to a net loss of $(16.7) million, or $(0.33) per share, for the second<br> quarter of 2019 |
| --- | --- |
| ● | Non-GAAP net loss in the second quarter of 2020 was $(14.2) million, or $(0.26) per share, compared to non-GAAP net income of $17.0 million, or $0.34 per share for the<br> second quarter of 2019 |
| --- | --- |
| ● | Net cash provided by operating activities in the second quarter of 2020 was $50.0 million, while capital expenditures totaled $3.3 million, leading to free cash flow of<br> $46.7 million, compared to $30.8 million of free cash flow in the second quarter of 2019, a 52% year-over-year increase |
| --- | --- |
| o | Excluding the capex investment associated with our new headquarters office build out, free cash flow would have been $47.1 million, up 53% y/y |
| --- | --- |
| ● | Added 346,000 net premium subscriptions in the second quarter of 2020 to reach 5.0 million as of June 30, 2020, a 17% increase over the total number of premium<br> subscriptions at the end of the second quarter of 2019 |
| --- | --- |
| ● | Added 9.3 million registered users in the second quarter of 2020. Registered users as of June 30, 2020 were 182 million, representing a 18% increase compared to the end<br> of the second quarter of 2019 |
| --- | --- |
Recent Business Highlights
| ● | Launched extended eCommerce solution, offering merchants access to advanced online business tools, such as dropshipping, automated sales tax calculations, streamlined<br> order and fulfillment, and integrated sales channels, including social media and marketplaces |
|---|---|
| ● | Announced the official launch of a new brand and innovative website creation platform, Editor X. Previously available in a closed beta program and now open to the<br> public, Editor X caters to web designers and agencies who are looking for advanced design capabilities |
| --- | --- |
| ● | Launched eCommerce solution for U.S. based merchants selling hemp-derived cannabidiol (CBD) products online, enabling these merchants to create an eCommerce website,<br> process payments online, manage and ship inventory and grow their CBD businesses where government and state regulations permit |
| --- | --- |
| ● | Expanded Customer Care team to a new office in Denver, Colorado to bolster existing efforts to provide best-in-class service to millions of users |
| --- | --- |
| ● | Conducted the third annual Wix Playground Academy, a three month intensive web design program taught by Wix professionals and award-winning designers, in a completely<br> online format for the first time. The students participated in the Social Good Project, building websites for 14 non-profits |
| --- | --- |
Financial Outlook
Our outlook for Q3 reflects continued momentum of new registered users as well as the growth in monetization of our user cohorts. We believe these behaviors will drive y/y collections growth above 31% in Q3.
During Q2, we increased advertising investment by approximately 90% y/y, and we acquired the largest user cohort in our history, which we expect will return future collections that are approximately 90% higher than the previous year’s Q2 cohort. This return supports our decision to be more aggressive with our marketing investment. We plan to continue the increased investment in advertising as long as positive returns continue.
Our Marketing team responded to the surge in demand quickly and aggressively, a testament to the strength of our team. We believe this level investment will drive higher revenue and collections over the coming years and will expand profitability and free cash flow over time as well.
We are introducing Q3 guidance as follows:
| Q3 2020 Outlook | Y/Y growth | |
|---|---|---|
| Revenue | $247 - 250 million | 26 - 27% |
| Collections | $270 - 275 million | 31 - 34% |
| Free Cash Flow | $15 - 17 million | (42) - (49)% |
| Free Cash Flow (excluding ~$1 million in capex for future Wix HQ office build out) | $16 - 18 million | (38) - (45)% |
This guidance assumes FX rates as of today. We continue to experience trends that are tailwinds to our top line growth. However, given the uncertainty related to COVID-19 and macroeconomic conditions, it is difficult to predict how long and to what degree these trends will remain; therefore, we are only providing guidance for the third quarter at this time.
Conference Call and Webcast Information
Wix will host a conference call at 8:30 a.m. ET on Thursday, August 6, 2020 to answer questions about the financial and operational performance of the business for the second quarter ended June 30, 2020. 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 +1-888-771-4371 (US/ Canada) or +1-847-585-4405 (US Toll) at least ten minutes prior to the start time of the call. A telephonic replay of the call will be available through August 13, 2020 at 11:59 p.m. ET at https://onlinexperiences.com/Launch/QReg/ShowUUID=D0DBA6CF-E305-452B-976E-19713D114599&LangLocaleID=1033 with passcode 49852245.
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.
Learn more: Wix.com, in our Press Room and on our Investor Relations site
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, free cash flow, free cash flow, as adjusted, free cash flow margins, non-GAAP R&D expenses, non-GAAP S&M expenses, non-GAAP G&A expenses, non-GAAP operating expenses, non-GAAP cost of revenue expense, non-GAAP tax expense (collectively the "Non-GAAP financial measures"). Measures presented on a constant currency or FX neutral basis have been adjusted to exclude the effect of y/y changes in foreign currency exchange rate fluctuations. Collections represent 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. Free cash flow, as adjusted, represents free cash flow further adjusted to exclude capital expenditures associated with our new headquarters. Free cash flow margins represent free cash flow divided by revenue. Non-GAAP cost of revenue represents cost of revenue calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related expenses and amortization. Non-GAAP R&D expenses represent R&D expenses calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related expenses and amortization. Non-GAAP S&M expenses represent S&M expenses calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related expenses and amortization. Non-GAAP G&A expenses represent G&A expenses calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related expenses and amortization. Non-GAAP operating expenses represent operating expenses calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related expenses and amortization.
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 reconciliation tables provided 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 is unable to provide reconciliations of free cash flow, free cash flow, as adjusted, cumulative cohort collections, non-GAAP gross margin, and non-GAAP tax expense to their most directly comparable GAAP financial measures on a forward-looking basis without unreasonable effort because items that impact those GAAP financial measures are out of the Company's control and/or cannot be reasonably predicted. Such information may have a significant, and potentially unpredictable, impact on our future financial results.
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 our Wix Partner Program; uncertainty surrounding the duration and severity of COVID-19 and its effects on our business, including changes in consumer dynamics shifting to online and increased GMV on our platform; 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, and our ability to successfully enter into partnership agreements; 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 2019 annual report on Form 20-F filed with the Securities and Exchange Commission on April 2, 2020. 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
ir@wix.com
914-267-7390
Media Relations:
pr@wix.com
| Wix.com Ltd. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP | ||||||||||||
| (In thousands, except loss per share data) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June 30, | June 30, | |||||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Revenue | ||||||||||||
| Creative Subscriptions | $ | 157,012 | $ | 190,169 | $ | 308,376 | $ | 366,715 | ||||
| Business Solutions | 28,407 | 45,890 | 51,333 | 85,331 | ||||||||
| 185,419 | 236,059 | 359,709 | 452,046 | |||||||||
| Cost of Revenue | ||||||||||||
| Creative Subscriptions | 29,296 | 38,510 | 55,943 | 73,900 | ||||||||
| Business Solutions | 17,366 | 31,972 | 30,434 | 58,652 | ||||||||
| 46,662 | 70,482 | 86,377 | 132,552 | |||||||||
| Gross Profit | 138,757 | 165,577 | 273,332 | 319,494 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development | 61,486 | 75,464 | 119,669 | 146,180 | ||||||||
| Selling and marketing | 71,329 | 119,333 | 157,047 | 215,489 | ||||||||
| General and administrative | 20,103 | 24,531 | 38,569 | 49,967 | ||||||||
| Total operating expenses | 152,918 | 219,328 | 315,285 | 411,636 | ||||||||
| Operating loss | (14,161 | ) | (53,751 | ) | (41,953 | ) | (92,142 | ) | ||||
| Financial expenses, net | (580 | ) | (3,339 | ) | (2,310 | ) | (2,194 | ) | ||||
| Other income (expenses) | 8 | 28 | 32 | 59 | ||||||||
| Loss before taxes on income | (14,733 | ) | (57,062 | ) | (44,231 | ) | (94,277 | ) | ||||
| Taxes on income | 2,001 | 674 | 3,243 | 2,612 | ||||||||
| Net loss | $ | (16,734 | ) | $ | (57,736 | ) | $ | (47,474 | ) | $ | (96,889 | ) |
| Basic and diluted net loss per share | $ | (0.33 | ) | $ | (1.06 | ) | $ | (0.95 | ) | $ | (1.82 | ) |
| Basic and diluted weighted-average shares used to compute net loss per share | 50,273,017 | 54,695,477 | 49,917,692 | 53,266,895 |
| Wix.com Ltd. | ||||||
|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED BALANCE SHEET | ||||||
| (In thousands) | ||||||
| Period ended | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| December 31, | June 30, | |||||
| 2019 | 2020 | |||||
| Assets | (audited) | (unaudited) | ||||
| Current Assets: | ||||||
| Cash and cash equivalents | $ | 268,103 | $ | 173,950 | ||
| Short term deposits | 294,096 | 406,033 | ||||
| Restricted cash and deposit | 1,149 | 925 | ||||
| Marketable securities | 164,301 | 174,624 | ||||
| Trade receivables | 16,987 | 18,830 | ||||
| Prepaid expenses and other current assets | 19,211 | 49,888 | ||||
| Total current assets | 763,847 | 824,250 | ||||
| Long Term Assets: | ||||||
| Property and equipment, net | 31,706 | 32,926 | ||||
| Marketable securities | 177,298 | 245,211 | ||||
| Prepaid expenses and other long-term assets | 9,926 | 13,243 | ||||
| Intangible assets and goodwill, net | 37,641 | 44,509 | ||||
| Operating lease assets | 79,249 | 81,112 | ||||
| Total long-term assets | 335,820 | 417,001 | ||||
| Total assets | $ | 1,099,667 | $ | 1,241,251 | ||
| Liabilities and Shareholder's Equity | ||||||
| Current Liabilities: | ||||||
| Trade payables | $ | 37,687 | $ | 73,059 | ||
| Employees and payroll accruals | 41,938 | 66,306 | ||||
| Deferred revenues | 289,148 | 344,515 | ||||
| Accrued expenses and other current liabilities | 56,464 | 65,036 | ||||
| Operating lease liabilities | 18,949 | 17,372 | ||||
| Total current liabilities | 444,186 | 566,288 | ||||
| Long term deferred revenues | 21,969 | 29,265 | ||||
| Long term deferred tax liability | 1,585 | 1,574 | ||||
| Convertible senior notes | 358,715 | 369,664 | ||||
| Long term loan | 1,219 | 1,219 | ||||
| Long term operating lease liabilities | 64,244 | 68,402 | ||||
| Total long term liabilities | 447,732 | 470,124 | ||||
| Total liabilities | 891,918 | 1,036,412 | ||||
| Shareholders' Equity | ||||||
| Ordinary shares | 94 | 104 | ||||
| Additional paid-in capital | 611,083 | 695,412 | ||||
| Other comprehensive loss | 1,357 | 10,997 | ||||
| Accumulated deficit | (404,785 | ) | (501,674 | ) | ||
| Total shareholders' equity | 207,749 | 204,839 | ||||
| Total liabilities and shareholders' equity | $ | 1,099,667 | $ | 1,241,251 |
| Wix.com Ltd. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| (In thousands) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June 30, | June 30, | |||||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| OPERATING ACTIVITIES: | ||||||||||||
| Net loss | $ | (16,734 | ) | $ | (57,736 | ) | $ | (47,474 | ) | $ | (96,889 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Depreciation | 2,927 | 3,537 | 5,585 | 7,109 | ||||||||
| Amortization | 738 | 566 | 1,470 | 1,132 | ||||||||
| Share based compensation expenses | 27,565 | 34,967 | 52,472 | 65,685 | ||||||||
| Amortization of debt discount and debt issuance costs | 5,194 | 5,516 | 10,311 | 10,949 | ||||||||
| Decrease in accrued interest and exchange rate on short term and long term deposits | 105 | 15 | 594 | 62 | ||||||||
| Amortization of premium and discount and accrued interest on marketable securities, net | (10 | ) | 438 | 41 | 717 | |||||||
| Deferred income taxes, net | 402 | (55 | ) | 533 | (1,721 | ) | ||||||
| Changes in operating lease right-of-use assets | - | 5,158 | - | 9,446 | ||||||||
| Changes in operating lease liabilities | - | (4,588 | ) | - | (9,817 | ) | ||||||
| Decrease (increase) in trade receivables | 161 | (1,765 | ) | (4,532 | ) | (1,617 | ) | |||||
| Increase in prepaid expenses and other current and long-term assets | (3,942 | ) | (6,931 | ) | (11,141 | ) | (21,605 | ) | ||||
| Increase (decrease) in trade payables | (3,222 | ) | 26,172 | 1,328 | 34,974 | |||||||
| Increase in employees and payroll accruals | 4,223 | 11,585 | 12,235 | 23,694 | ||||||||
| Increase in short term and long term deferred revenues | 14,144 | 29,792 | 40,233 | 62,663 | ||||||||
| Increase in accrued expenses and other current liabilities | 5,629 | 3,287 | 10,599 | 10,203 | ||||||||
| Net cash provided by operating activities | 37,180 | 49,958 | 72,254 | 94,985 | ||||||||
| INVESTING ACTIVITIES: | ||||||||||||
| Proceeds from short-term deposits and restricted deposits | 55,000 | 9,225 | 81,775 | 26,225 | ||||||||
| Investment in short-term deposits and restricted deposits | - | (49,000 | ) | (26,000 | ) | (138,000 | ) | |||||
| Investment in marketable securities | (108,693 | ) | (100,867 | ) | (136,616 | ) | (230,168 | ) | ||||
| Proceeds from marketable securities | 21,601 | 65,656 | 29,056 | 154,911 | ||||||||
| Purchase of property and equipment | (6,235 | ) | (3,264 | ) | (11,065 | ) | (8,207 | ) | ||||
| Capitalization of software development costs | (191 | ) | - | (389 | ) | (132 | ) | |||||
| Investment in other short and long-term assets | (2,800 | ) | (643 | ) | (2,800 | ) | (5,643 | ) | ||||
| Payment for Businesses acquired | - | - | - | (6,626 | ) | |||||||
| Purchases of investments in privately-held companies | - | (685 | ) | - | (785 | ) | ||||||
| Net cash used in investing activities | (41,318 | ) | (79,578 | ) | (66,039 | ) | (208,425 | ) | ||||
| FINANCING ACTIVITIES: | ||||||||||||
| Proceeds from exercise of options and ESPP shares | 7,512 | 12,312 | 14,190 | 19,287 | ||||||||
| Net cash provided by financing activities | 7,512 | 12,312 | 14,190 | 19,287 | ||||||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 3,374 | (17,308 | ) | 20,405 | (94,153 | ) | ||||||
| CASH AND CASH EQUIVALENTS—Beginning of period | 348,088 | 191,258 | 331,057 | 268,103 | ||||||||
| CASH AND CASH EQUIVALENTS—End of period | $ | 351,462 | $ | 173,950 | $ | 351,462 | $ | 173,950 |
| Wix.com Ltd. | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| KEY PERFORMANCE METRICS | ||||||||||
| (In thousands) | ||||||||||
| Three Months Ended | Six Months Ended | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| June 30, | June 30, | |||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||
| (unaudited) | (unaudited) | |||||||||
| Creative Subscriptions | 157,012 | 190,169 | 308,376 | 366,715 | ||||||
| Business Solutions | 28,407 | 45,890 | 51,333 | 85,331 | ||||||
| Total Revenue | $ | 185,419 | $ | 236,059 | $ | 359,709 | $ | 452,046 | ||
| Creative Subscriptions | 170,493 | 217,696 | 347,387 | 426,493 | ||||||
| Business Solutions | 29,070 | 48,155 | 52,555 | 88,216 | ||||||
| Total Collections | $ | 199,563 | $ | 265,851 | $ | 399,942 | $ | 514,709 | ||
| Free Cash Flow | $ | 30,754 | $ | 46,694 | $ | 60,800 | $ | 86,646 | ||
| Creative Subscriptions ARR | $ | 648,176 | $ | 790,916 | $ | 648,176 | $ | 790,916 | ||
| Number of registered users at period end (*) | 154,039 | 181,585 | 154,039 | 181,585 | ||||||
| Number of premium subscriptions at period end (*) | 4,295 | 5,007 | 4,295 | 5,007 | ||||||
| (*) Excludes users and subscriptions of DeviantArt | ||||||||||
| --- | ||||||||||
| Wix.com Ltd. | ||||||||||
| --- | ||||||||||
| RECONCILIATION OF REVENUES TO COLLECTIONS | ||||||||||
| (In thousands) | ||||||||||
| Three Months Ended | Six Months Ended | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| June 30, | June 30, | |||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||
| (unaudited) | (unaudited) | |||||||||
| Revenues | $ | 185,419 | $ | 236,059 | $ | 359,709 | $ | 452,046 | ||
| Change in deferred revenues | 14,144 | 29,792 | 40,233 | 62,663 | ||||||
| Collections | $ | 199,563 | $ | 265,851 | $ | 399,942 | $ | 514,709 | ||
| Three Months Ended | Six Months Ended | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| June 30, | June 30, | |||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||
| (unaudited) | (unaudited) | |||||||||
| Creative Subscriptions Revenue | $ | 157,012 | $ | 190,169 | $ | 308,376 | $ | 366,715 | ||
| Change in deferred revenues | 13,481 | 27,527 | 39,011 | 59,778 | ||||||
| Creative Subscriptions Collections | $ | 170,493 | $ | 217,696 | $ | 347,387 | $ | 426,493 | ||
| Three Months Ended | Six Months Ended | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| June 30, | June 30, | |||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||
| (unaudited) | (unaudited) | |||||||||
| Business Solutions Revenue | $ | 28,407 | $ | 45,890 | $ | 51,333 | $ | 85,331 | ||
| Change in deferred revenues | 663 | 2,265 | 1,222 | 2,885 | ||||||
| Business Solutions Collections | $ | 29,070 | $ | 48,155 | $ | 52,555 | $ | 88,216 | ||
| Wix.com Ltd. | ||||||||||
| --- | ||||||||||
| RECONCILIATION OF REVENUES AND COLLECTIONS EXCLUDING FX IMPACT | ||||||||||
| (In thousands) | ||||||||||
| Three Months Ended | Six Months Ended | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June 30, | June 30, | |||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||
| (unaudited) | (unaudited) | |||||||||
| Revenues | $ | 185,419 | $ | 236,059 | $ | 359,709 | $ | 452,046 | ||
| FX impact on Q2/20 using Q2/19 rates | - | 1,824 | - | 3,335 | ||||||
| Revenue excluding FX impact | $ | 185,419 | $ | 237,883 | $ | 359,709 | $ | 455,381 | ||
| Y/Y% | 28 | % | 27 | % | ||||||
| Three Months Ended | Six Months Ended | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June 30, | June 30, | |||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||
| (unaudited) | (unaudited) | |||||||||
| Collections | $ | 199,563 | $ | 265,851 | $ | 399,942 | $ | 514,709 | ||
| FX impact on Q2/20 using Q2/19 rates | - | 3,922 | - | 6,271 | ||||||
| Collections excluding FX impact | $ | 199,563 | $ | 269,773 | $ | 399,942 | $ | 520,980 | ||
| Y/Y% | 35 | % | 30 | % |
| Wix.com Ltd. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TOTAL ADJUSTMENTS GAAP TO NON-GAAP | ||||||||||||
| (In thousands) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| June 30, | June 30, | |||||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||||
| (1) Share based compensation expenses: | (unaudited) | (unaudited) | ||||||||||
| Cost of revenues | $ | 1,436 | $ | 1,869 | $ | 2,747 | $ | 3,500 | ||||
| Research and development | 14,119 | 18,216 | 26,375 | 34,401 | ||||||||
| Selling and marketing | 4,506 | 5,395 | 9,254 | 9,963 | ||||||||
| General and administrative | 7,504 | 9,487 | 14,096 | 17,821 | ||||||||
| Total share based compensation expenses | 27,565 | 34,967 | 52,472 | 65,685 | ||||||||
| (2) Amortization | 738 | 566 | 1,470 | 1,132 | ||||||||
| (3) Acquisition related expenses | 53 | 1,697 | 53 | 2,636 | ||||||||
| (4) Amortization of debt discount and debt issuance costs | 5,194 | 5,516 | 10,311 | 10,949 | ||||||||
| (5) Sales tax accrual and other G&A expenses (income) | - | (485 | ) | - | 1,489 | |||||||
| (6) Non-operating foreign exchange expenses (income) | 140 | 1,305 | 1,592 | 432 | ||||||||
| Total adjustments of GAAP to Non GAAP | $ | 33,690 | $ | 43,566 | $ | 65,898 | $ | 82,323 | ||||
| Wix.com Ltd. | ||||||||||||
| --- | ||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT | ||||||||||||
| (In thousands) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June 30, | June 30, | |||||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Gross Profit | $ | 138,757 | $ | 165,577 | $ | 273,332 | $ | 319,494 | ||||
| Share based compensation expenses | 1,436 | 1,869 | 2,747 | 3,500 | ||||||||
| Acquisition related expenses | - | 305 | - | 305 | ||||||||
| Amortization | 141 | - | 283 | - | ||||||||
| Non GAAP Gross Profit | 140,334 | 167,751 | 276,362 | 323,299 | ||||||||
| Non GAAP Gross margin | 76 | % | 71 | % | 77 | % | 72 | % | ||||
| Three Months Ended | Six Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June 30, | June 30, | |||||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Gross Profit - Creative Subscriptions | $ | 127,716 | $ | 151,659 | $ | 252,433 | $ | 292,815 | ||||
| Share based compensation expenses | 1,226 | 1,485 | 2,375 | 2,807 | ||||||||
| Non GAAP Gross Profit - Creative Subscriptions | 128,942 | 153,144 | 254,808 | 295,622 | ||||||||
| Non GAAP Gross margin - Creative Subscriptions | 82 | % | 81 | % | 83 | % | 81 | % | ||||
| Three Months Ended | Six Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June 30, | June 30, | |||||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Gross Profit - Business Solutions | $ | 11,041 | $ | 13,918 | $ | 20,899 | $ | 26,679 | ||||
| Share based compensation expenses | 210 | 384 | 372 | 693 | ||||||||
| Acquisition related expenses | - | 305 | - | 305 | ||||||||
| Amortization | 141 | - | 283 | - | ||||||||
| Non GAAP Gross Profit - Business Solutions | 11,392 | 14,607 | 21,554 | 27,677 | ||||||||
| Non GAAP Gross margin - Business Solutions | 40 | % | 32 | % | 42 | % | 32 | % | ||||
| Wix.com Ltd. | ||||||||||||
| --- | ||||||||||||
| RECONCILIATION OF OPERATING INCOME (LOSS) TO NON-GAAP OPERATING INCOME (LOSS) | ||||||||||||
| (In thousands) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June 30, | June 30, | |||||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Operating loss | $ | (14,161 | ) | $ | (53,751 | ) | $ | (41,953 | ) | $ | (92,142 | ) |
| Adjustments: | ||||||||||||
| Share based compensation expenses | 27,565 | 34,967 | 52,472 | 65,685 | ||||||||
| Amortization | 738 | 566 | 1,470 | 1,132 | ||||||||
| Sales tax accrual and other G&A expenses (income) | - | (485 | ) | - | 1,489 | |||||||
| Acquisition related expenses | 53 | 1,697 | 53 | 2,636 | ||||||||
| Total adjustments | $ | 28,356 | $ | 36,745 | $ | 53,995 | $ | 70,942 | ||||
| Non GAAP operating income (loss) | $ | 14,195 | $ | (17,006 | ) | $ | 12,042 | $ | (21,200 | ) |
| 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 | Six Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June 30, | June 30, | |||||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Net loss | $ | (16,734 | ) | $ | (57,736 | ) | $ | (47,474 | ) | $ | (96,889 | ) |
| Share based compensation expense and other Non GAAP adjustments | 33,690 | 43,566 | 65,898 | 82,323 | ||||||||
| Non-GAAP net income (loss) | $ | 16,956 | $ | (14,170 | ) | $ | 18,424 | $ | (14,566 | ) | ||
| Basic Non GAAP net income (loss) per share | $ | 0.34 | $ | (0.26 | ) | $ | 0.37 | $ | (0.27 | ) | ||
| Weighted average shares used in computing basic Non GAAP net income (loss) per share | 50,273,017 | 54,695,477 | 49,917,692 | 53,266,895 | ||||||||
| Wix.com Ltd. | ||||||||||||
| --- | ||||||||||||
| RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | ||||||||||||
| (In thousands) | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June 30, | June 30, | |||||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Net cash provided by operating activities | $ | 37,180 | $ | 49,958 | $ | 72,254 | $ | 94,985 | ||||
| Capital expenditures, net | (6,426 | ) | (3,264 | ) | (11,454 | ) | (8,339 | ) | ||||
| Free Cash Flow | $ | 30,754 | $ | 46,694 | $ | 60,800 | $ | 86,646 | ||||
| Capex related to future Wix HQ office build-out | - | 408 | - | 891 | ||||||||
| Free Cash Flow, excluding capex related to future Wix HQ office build-out | $ | 30,754 | $ | 47,102 | $ | 60,800 | $ | 87,537 | ||||
| Wix.com Ltd. | ||||||||||||
| --- | ||||||||||||
| RECONCILIATION OF BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND THE DILUTED WEIGHTED<br><br> <br>AVERAGE NUMBER OF SHARES OUTSTANDING | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| June 30, | June 30, | |||||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Basic and diluted weighted average number of shares outstanding | 50,273,017 | 54,695,477 | 49,917,692 | 53,266,895 | ||||||||
| The following items have been excluded from the diluted weighted average number of shares outstanding because they are<br> anti-dilutive: | ||||||||||||
| Stock options | 7,744,708 | 4,906,490 | 7,744,708 | 4,906,490 | ||||||||
| Restricted share units | 2,289,069 | 2,190,991 | 2,289,069 | 2,190,991 | ||||||||
| Convertible Notes (if-converted) | 3,104,251 | 3,104,251 | 3,104,251 | 3,104,251 | ||||||||
| 63,411,045 | 64,897,209 | 63,055,720 | 63,468,627 |
| Wix.com Ltd. | ||||
|---|---|---|---|---|
| RECONCILIATION OF REVENUES TO COLLECTIONS | ||||
| (In thousands) | ||||
| Three Months Ended | ||||
| --- | --- | --- | ||
| September 30, | ||||
| 2019 | ||||
| (unaudited) | ||||
| Revenues | $ | 196,791 | ||
| Change in deferred revenues | 9,069 | |||
| Collections | $ | 205,860 | ||
| Wix.com Ltd. | ||||
| --- | ||||
| RECONCILIATION OF PROJECTED REVENUES TO PROJECTED COLLECTIONS | ||||
| (In thousands) | ||||
| Three Months Ended | ||||
| --- | --- | --- | --- | --- |
| September 30, 2020 | ||||
| Low | High | |||
| Projected revenues | 247,000 | 250,000 | ||
| Projected change in deferred revenues | 23,000 | 25,000 | ||
| Projected Collections | $ | 270,000 | $ | 275,000 |
| Wix.com Ltd. | ||||
| --- | ||||
| RECONCILIATION OF COHORT COLLECTIONS | ||||
| (In millions) | ||||
| Three Months Ended | ||||
| --- | --- | --- | --- | --- |
| June 30, | ||||
| 2019 | 2020 | |||
| Q2 Cohort revenues | 6 | 10 | ||
| Q2 Change in deferred revenues | 17 | 28 | ||
| Q2 Cohort Collections | $ | 23 | $ | 38 |