Slide 1: Earnings Results Third Quarter 2017
Earnings Results Third Quarter 2017 1
Slide 2: Safe Harbor
Safe Harbor 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-GA
Slide 3: Key Metrics: Q3'17
Key Metrics: Q3’17 Registered Users Premium Subscriptions Collections (000s) (000s) ($000s) 23% 113,923 33% 38% 3,053 Y/Y Y/Y Y/Y $120,119 92,374 2,294 $87,270 Q3'16 Q3'17 Q3'16 Q3'17 Q3'16 Q3'17 Improvement Improvement in Conversion in ACPS 3
Slide 4: Q3'17 Financial Highlights
Q3’17 Financial Highlights • Revenue of $111.0 million exceeded prior guidance of $109-110 million; 47% Y/Y growth • Collections of $120.1 million exceeded prior guidance of $117-118 million; 38% Y/Y growth • Gross margin on a GAAP basis was 83%, compared to 85% in the third quarter of last year • N
Slide 5: Q3'17 Business Highlights
Q3’17 Business Highlights • Addition of Wix ADI has driven significant increases in conversion: A year since the release of Wix ADI, results show that adding ADI to our platform has had a material impact on our conversion of registered users to paid subscriptions. To date, millions of websites have
Slide 6: The Wix Platform
The Wix Platform Wix Wix ADI Wix Code Editor Novice Expert 6
Slide 7: Users and Subscriptions
Users and Subscriptions 33% 23% Y/Y Registered Users Y/Y Premium Subscriptions (millions, at End of Period) (000s, at End of Period) 114 3,053 109 2,865 103 97 2,673 92 2,465 87 2,294 82 2,121 77 72 1,938 68 1,767 63 1,643 58 1,503 50 1,371 50 46 1,233 42 1,125 39 1,019 36 908 32 790 28 707 25 627 5
Slide 8: Revenue and Collections
Revenue and Collections 47% 38% Revenue Y/Y Collections Y/Y ($ millions) ($ millions) $111 $120 $117 $115 $104 $93 $98 $84 $87 $76 $81 $69 $76 $62 $67 $57 $62 $54 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 8
Slide 9: Deferred Revenue Growth
Deferred Revenue Growth 42% 47% Deferred Revenue Y/Y Revenue Y/Y ($ millions) ($ millions) $204 $111 $195 $182 Deferred Revenue nearly all $104 realized over next 12 months $93 $157 $143 $84 $132 $119 $76 $105 $69 $95 $62 $57 $54 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q3'15 Q4'15 Q1'1
Slide 10: Accelerating Free Cash Flow Generation
Accelerating Free Cash Flow Generation 88- Free Cash Flow1 101% 91% Y/Y Y/Y ($ millions) $19 $19 $68-69 $17 $15 $10 $9 $8 $36 $5 -$2 $15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 2015 2016 2017E 1Net cash provided by operating activities for the third quarter of 2017 was $22.1 million, w
Slide 11: Growing With Consistent Behavior
Growing With Consistent Behavior Active Premium Subscriptions from Q1 User Cohorts New Registered Users 1Q17 237,675 5,875,165 1Q16 5,305,726 178,663 181,075 1Q15 4,568,323 1Q14 138,909 4,089,253 126,962 115,971 1Q13 102,980 3,714,472 92,019 1Q12 78,650 2,651,656 62,071 1Q11 33,747 1,833,897 34,553
Slide 12: Long-Term Subscriptions
Long-Term Subscriptions % of Gross New Subscriptions % of Total Subscriptions 77% 79% 77% 75% 70% 67% 65% 65% 64% 18% 35% 35% 36% 30% 33% 82% 23% 23% 25% 21% Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 1 Year or Longer Monthly 1 Year or Longer Monthly Note: Data as of September 30, 2017 12
Slide 13: Ongoing Cohort Conversions
Ongoing Cohort Conversions % of Gross New Subscriptions by Prior and Current User Cohorts 63% 62% 63% 63% 58% 60% 60% 59% 60% 42% 40% 40% 41% 40% 37% 38% 37% 37% Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Prior user cohorts Current user cohort Note: Data as of September 30, 2017 13
Slide 14: Marketing Efficiency
Marketing Efficiency One Time Marketing, Ongoing Monthly Collections … After 19 Quarters … After 15 Quarters 7.1x 4.1x … After 11 Quarters $58 … After 7 Quarters 3.2x To Date $71 $33 … After 3 Quarters 2.1 x To Date 1.1 x $33 $40 $61 $8 $33 To Date To To Date Date $33 To$52 Date Q1’13 Cohort To Date
Slide 15: Average Collections per New Annual Subscription
Average Collections per New Annual Subscription $158 $156 $156 $153 $150 $145 $141 $132 $132 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Note: Based on full-priced (excluding sales), new annual subscriptions purchased in the US for each quarter. 15
Slide 16: Increasing Geographic Penetration
Increasing Geographic Penetration FX-Neutral Revenue by Geography (% of Total) 9% 14% 47% Y/Y 3% 17% 8% 41% Y/Y 26% 44% Y/Y Growth Rate vs. Q3’16 (Constant currency basis) 71% 52% 50% Y/Y 2010 Q3'171 North America Europe Latin America Asia and others 1Revenue by Geography and Y/Y change based on con
Slide 17: Non-GAAP Financial Results
Non-GAAP Financial Results 2016 2017 Full Year in 000s Q3 Q3 2014 2015 2016 Revenues $ 75,611 $ 111,031 $ 141,841 $ 203,518 $ 290,103 Collections 87,270 120,119 171,255 241,687 342,069 Non-GAAP Gross Profit 65,053 93,744 116,738 169,901 246,614 Gross Margin % 86% 84% 82% 83% 85% Non-GAAP R&D expense
Slide 18: APPENDIX
APPENDIX 18
Slide 19: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures 2015 2016 2017 in 000s Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Revenue $44,524 $48,581 $53,582 $56,831 $61,586 $68,730 $75,611 $84,176 $92,538 $103,522 $111,031 Change in deferred revenue $11,345 $8,787 $7,998 $10,039 $14,108 $12,723 $11,659 $13,476 $22,008 $13,5
Slide 20: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures 2015 2016 2017 in 000s Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Research and development (GAAP) $17,448 $18,233 $20,065 $21,901 $24,472 $25,483 $26,536 $28,877 $32,669 $36,749 $40,252 Options compensation $1,959 $1,831 $2,592 $2,852 $3,111 $3,558 $3,718 $4,156 $4,
Slide 21: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures 2015 2016 2017 in 000s Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 GAAP Net Loss ($16,026) ($12,279) ($11,724) ($11,305) ($19,912) ($11,420) ($9,643) ($6,182) ($20,885) ($14,264) ($14,519) Share Based Compensation $4,048 $3,787 $5,322 $5,577 $6,137 $6,927 $7,163 $7,8