Wix Reports Second Quarter 2019 Results

NEW YORK, July 24, 2019 /PRNewswire/ -- Wix.com Ltd. (Nasdaq: WIX) today reported strong financial results for the second quarter ended June 30, 2019, exceeding its prior guidance. In addition, the Company provided its initial outlook for the third quarter 2019 and raised its outlook for the full year, reflecting accelerating collections growth for the second half of the year.

"Our ongoing strong top line performance reflects success across multiple growth drivers, including vast improvements to our overall product offering and increasing adoption of complementary products. These results validate the increasing value we provide to our evolving user base. We have made tremendous progress with multiple new initiatives, and I believe these will drive growth in the second half of this year and beyond," said Avishai Abrahami, Co-founder and CEO of Wix.

Lior Shemesh, CFO of Wix, said, "We continue to grow the value of our user base through new product offerings and increasing monetization. We now expect future collections of existing user cohorts to be $5.9 billion over the next eight years, which is an increase of 28% Y/Y. Our results continue to show the strength of our financial model and our ability to drive profitable growth, which we believe will continue through this year and for many years to come."

Commenting on the recently announced initiative to expand Customer Solutions, Nir Zohar, President and COO of Wix, said, "Our expanding Customer Solutions organization is ramping quickly as we have added resources and are implementing many new processes to enable personalized support for users. Initial data is very positive, and we continue to believe this initiative will fuel additional growth."

Q2 2019 Financial Summary

Additional Q2 2019 Results and Highlights

• Gross margin on a GAAP basis in the second quarter of 2019 was 75%, compared to 79% in the second quarter of 2018

• Non-GAAP gross margin in the second quarter of 2019, calculated as non-GAAP gross profit as a percent of revenue, was 76%, compared to 80% in the second quarter of 2018

• GAAP net loss in the second quarter of 2019 was $(16.7) million, or $(0.33) per share, compared to a net loss of $(5.6) million, or $(0.12) per share, for the second quarter of 2018

• Non-GAAP net income in the second quarter of 2019 was $17.0 million, or $0.34 per share, compared to non-GAAP net income of $13.8 million, or $0.29 per share for the second quarter of 2018

• Net cash provided by operating activities in the second quarter of 2019 was $37.2 million, while capital expenditures totaled $6.4 million, leading to free cash flow of $30.8 million, compared to $23.9 million of free cash flow in the second quarter of 2018, a 29% year-over-year increase

• Added 132,000 net premium subscriptions in the second quarter of 2019 to reach 4.3 million as of June 30, 2019, a 17% increase over the total number of premium subscriptions at the end of the second quarter of 2018

• Added 5.7 million registered users in the second quarter of 2019. Registered users as of June 30, 2019 were 154 million, representing an 18% increase compared to the end of the second quarter of 2018

Recent Business Highlights

• Multiple new initiatives indicating strong future growth potential: The progress of several new initiatives under development at Wix are demonstrating the ability to contribute growth in the future. To highlight a few:

• When we launched Corvid by Wix, we did so to expand our addressable market to professionals - this expansion is happening as more professionals are coming to Wix than ever before

• Gaining momentum with Agency Partners - tens of thousands use Wix today

• Significant progress in expanding Customer Support organization - now providing 24/7 support globally and implementing procedures to provide personalized support

• Share of Wix Payments of total GMV rapidly increasing as total GMV continues to climb, demonstrating strong momentum as global rollout continues

• Over 500,000 Wix users with premium subscriptions have used at least one component of Ascend by Wix in the last 30 days, illustrating this product's enormous market potential

• Announced new operations in Japan: We announced expanded operations in Japan with the opening of an office in Tokyo in order to drive further growth in this market. Through the development of partnerships, targeted marketing and dedicated customer support, these new operations will improve our ability to serve this fast-growing market.

• Acquired Gefen Team to form a new creative group within Wix: In May, we completed an acquihire of the Tel Aviv-based creative agency in support of our goal to become a top 100 brand globally. The Gefen Team, an award-winning creative agency, joined the Wix marketing team full time, and Founder Eran Gefen is now the Vice President of Creative at Wix.

• Launched global partnership with eSports and entertainment organization FaZe Clan: As part of our brand strategy, we have partnered with FaZe Clan to connect with current and future customers through integrated social and digital content. Wix will become FaZe Clan's official website development and design partner. Wix branding will also be featured on the official FaZe Clan team shirt, and Wix will serve as an official supporter of FaZe Clan's Professional Fortnite team. This is our first eSports partnership and part of our ongoing sports marketing efforts.

• Hosting the second annual Wix Design Playground: We are hosting a three-month design program in New York in which participants develop and hone their web design skills. A major initiative over the course of the program is the Social Good Project in which each designer helps a local non-profit to build an online presence and manage the outreach to their communities using the Wix platform. 

Financial Outlook

Wix is introducing its outlook for the third quarter 2019:

Wix is also updating its outlook for the full year 2019:

Conference Call and Webcast Information

Wix will host a conference call at 8:30 a.m. ET on Wednesday, July 24, 2019 to answer questions about the financial and operational performance of the business for the second quarter ended June 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 +1-877-270-2148 (US/ Canada), +1-412-902-6510 (International) or 1-809-212-373 (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 July 31, 2019 at 11:59 p.m. ET by dialing +1-877-344-7529 and providing Conference ID 10133234.

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 150 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, 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, 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 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.

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," "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; 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; 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; 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 415-223-2624

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

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SOURCE Wix.com Ltd.