Wix.com Ltd. · NASDAQ:WIX
Wix.com — Investor Day (2018)
153 slides from Wix.com's investor day presentation, 2018
Slide 1: Analyst & Investor Day 2018
ANALYST& INVESTOR DAY 2018 WiXcom
Slide 2: Safe Harbor
Safe Harbor Non-GAAP Financial Measures Forward-Looking Statements To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, Wix uses the This press release contains forward-looking statements, within the meaning of the safe harbor following
Slide 3: Mark Tluszcz and Avishai Abrahami
Mark Tluszcz Chairman Avishai Abrahami Co-Founder and CEO ANALYST& INVESTOR DAY 2018 WiXcom
Slide 4: Our Vision
Our Vision Where any business, community or person can create their dreams online 4
Slide 5: Many Others Have Not Had Success
Many Others Have Not Had Success Apple - iWeb Adobe - Muse Microsoft - FrontPage Microsoft - Expression Microsoft - SharePoint Adobe - Project Rome Intuit - Homestead Adobe - Catalyst 5
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Slide 8: Book a Room
BOOK A ROOM < 6? 1314 May 2018 South of the Bronx ‘TKAHN / South of the Bronx Mew eons 0) J ASHTANGA YOGA VINYASA YOGA Thank you and enjoy s] HATHA Yooa 1 Ceramic Planters Potted Cactus 813.00
Slide 9: Website building
Wix Customer Website building Verticals / ERP Experience CRM Mobile & Desktop Marketing & Branding Tools E-mail Marketing Wix Mobile App 9
Slide 10: 130M Registered Users
130M 2M Registered New registered Users users every month 10
Slide 11: If you build it, they will come
“If you build it, they will come” This is the dream behind every startup: you build something, and the magic happens People are coming, and they use and love your product 11
Slide 12: 2 million new users per month
2 million new users per month Novice Expert 12
Slide 13: Huge Market: Fast Growth
Huge Fast Market: Growth: 24 million software +24% growth in software developers globally developer jobs 2016-2026 Sources: Evans Data, US Bureaus of Labor Statistics 13
Slide 14: Wix Code Expands Addressable Market by 10X
Wix Code Expands Addressable Market by 10X ~330M $300B+ Existing active domains Every time we improve capabilities at Wix, the DIY website builder opportunity expands Wix Code expands the entire opportunity 3.5 million Wix premium sites DIY website builders Sources: Verisign, WhoIs database, int
Slide 15: Wix Answers – The Power of the Wix Platform
Wix Answers – The Power of the Wix Platform 15
Slide 16: Wix Answers – The Power of the Wix Platform
Wix Answers – The Power of the Wix Platform Multi-billion dollar industry Built internally Minimal incremental investment Minimal incremental marketing Low barriers for user to implement 16
Slide 17: Manage & Grow Your Business
Manage & Grow Your Business Multi-$100 Billion+ Mobile Customer Marketing Management E-mail CRM SEO Support Logos Vertical ERPs Website E-commerce Hospitality Building Communication Restaurants E-mail Music Productivity Photography $300 Billion+ 17
Slide 18: The Wix R&D Framework
The Wix R&D Framework The Wix Platform: The Wix Platform: Market Short term Conversion Mid term relevance Expansion The Wix Platform New Frontiers 18
Slide 19: Google Search Console & Wix SEO Wiz Integration
Google Search Console & Wix SEO Wiz Integration Connect to Google One click to submit your website to Google through Wix Instant Indexing It takes less than 30 seconds to index your site 19
Slide 20: A Revolutionary Way to Showcase Your Videos
A Revolutionary Way to Showcase Your Videos (Watch Video) Se Surf Schéol
Slide 21: DeviantArt
DEVIANT ART
Slide 22: 1 Billion Users
1 BILLION USERS 22
Slide 23: The Next Big Thing
THE NEXT BIG THING 23
Slide 24: Wix Code
WixCode Creation Without Limits David “Dedi” Schwartz, VP Product ANALYST& INVESTOR DAY 2018 WiXcom
Slide 25: Our Vision
Our Vision Where any business, community or person can create their dreams online 25
Slide 26: Product Development
Product Development Photography Forum Bookings ADI Code New Editor Events ShoutOut Launch App Market Restaurants WixApp 2.0 Video Answers Stores Ed o Music Blog n 2015 2016 2017 2018 SEO Wiz Aren Home a Smart Actions Invoices + ArtStore Get Engage Subscribers LogoMaker 26
Slide 27: Types of Wix Code Users
Types of Wix Code Users Wix Users Wix Experts Pro Developers and Agencies 27
Slide 28: Wix Users Don't need to know how to code
Don’t need to know how to code Wix Users Can easily setup a database Can add info entered by their visitors Create dynamic pages based on the data 28
Slide 29: Baking with J.Alissa
BAKING WITH J.ALISSA vo MY RECIPES
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Slide 31: Want to Borrow? Be Creative
Be Creative Want to Borrow? Michal Bignitz 2018 Sorry, this book is currently in use Michalb@becreative.com by Michal Bignitz 31
Slide 32: Pv Een e
Pv Een e >. VANCOUVER “ FIRST REALTY mae #3006 BURNABY #2210 NEW WESTMINSTER #707 COQUITLAM #607 COQUITLAM #129 RICHMOND 731 1 1 ais 2 z 1035 2 2 1035 1 1
Slide 33: Wix Users Are becoming more advanced
Wix Users Are becoming more advanced and sophisticated Before Wix Code With Wix Code When they needed a They come, they database, there was have a solution no solution at Wix and they convert 33
Slide 34: Wix Experts and Agencies
Wix Experts Build professional websites for others. and Agencies Need to build exactly to customers’ requirements. Before Wix Code: they built on Wix, but if there was no solution for these specific requirements, they went to other platforms. 34
Slide 35: With Wix Code you can use APIs
With Wix Code you can use APIs to add any feature or app, allowing experts to build professional, high GMV stores on Wix. 35
Slide 36: You Design it, We Make it.
You Design it, We Make it. This season, create the only shoe your sultease heeds. Choose colors and materiale you cen dross up or down for a go-tolook fit for every summer gataway. we Dolvered in 2-6 wooke “4 oN aa . BASE ‘ace Mipsole ‘TOECAP UNING laces sae ~
Slide 37: Wix Experts Use APIs to modify any Wix element
Wix Experts Use APIs to modify any Wix element and Agencies Develop on top of existing Wix Verticals like hotels, music, photography, restaurants, bookings Integrate into existing Wix features like chat, invoices and email marketing 37
Slide 38: Pro Developers
Pro Developers Before Wix Code With Wix Code Came to Wix to build Come to Wix to build any only web sites web application they want 38
Slide 39: Wix Code removes the hassles of:
Pro Developers Wix Code removes the hassles of: Security SEO GDPR Server & dev Building simple Maintenance environment components 39
Slide 40: With Wix Code developers can build
Wix offers many vertical applications but there is a demand for many more vertical solutions With Wix Code developers can build an entire vertical solution and even offer it to others. 40
Slide 41: Driving Growth, Building the Brand.
Driving Growth, Building the Brand. Omer Shai, CMO ANALYST& INVESTOR DAY 2018 WiXcom
Slide 42: How we increase our marketing investment
How we increase our marketing investment while maintaining efficiency. 42
Slide 43: What is TROI?
What is TROI? Time to Return On (Marketing) Investment 43
Slide 44: Our goal is to keep TROI of 7-9 months
Our goal is to keep TROI of 7-9 months, while constantly increasing marketing investment. 44
Slide 45: To calculate effective acquisition cost
To calculate effective acquisition cost, we constantly measure ourselves with this formula: Collections $ per subscription Acquisition Cost per subscription 45
Slide 46: Effective Acquisition Cost for Q1'18
Effective Acquisition Cost for Q1’18 Collections $ per subscription = 0.57x Acquisition Cost per subscription 46
Slide 47: TROI Remained Stable Over the Last 3 Years
TROI Remained Stable Over the Last 3 Years 1st 0.56x 0.54x 0.54x 0.55x 0.60x 0.55x 0.67x 0.58x 0.54x 0.57x Quarter 0.52x 0.52x ROI 0.51x Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 47
Slide 48: Marketing Investment Has More Than Doubled
Marketing Investment Has More Than Doubled $44 Marketing Investment ($ millions) $32 $25 $19 2.3x $44 $19 Q1'15 Q1'18 Q1'15 Q1'16 Q1'17 Q1'18 Note: Excludes ~$6 million in Q1’15, ~$7 million in Q1’16, ~$9 million in Q1’17 and ~$4 million in Q1’18 of brand marketing expenses 48
Slide 49: The Result: Collections Have More Than Doubled
The Result: Collections Have More Than Doubled $25 Cohort Net Collections $20 ($ millions) $14 $11 2.3x $25 $11 Q1'15 Q1'18 Q1'15 Q1'16 Q1'17 Q1'18 49
Slide 50: Is acquisition cost per premium subscription going up?
Is acquisition cost per premium subscription going up? No. 50
Slide 51: How We're Doing It
How We’re Doing It Expanding our product offering and improving our ARPU Constant funnel optimization Improving customer support Ongoing optimization of marketing efforts Building the brand 51
Slide 52: Product Development
Product Development Photography Forum Bookings ADI Code New Editor Events ShoutOut Launch App Market Restaurants WixApp 2.0 Video Answers Stores Ed o Music Blog n 2015 2016 2017 2018 SEO Wiz Aren Home a Smart Actions Invoices + ArtStore Get Engage Subscribers LogoMaker 52
Slide 53: Product Development
Product Development Photography Forum Bookings ADI New Editor Code Events ShoutOut Launch App Market Restaurants WixApp 2.0 Video Answers Stores Ed o Music Blog n 2015 2016 2017 2018 SEO Wiz Aren Home a Smart Actions Invoices + ArtStore Get Engage Subscribers LogoMaker 53
Slide 54: Types of Wix Code Users
Types of Wix Code Users Wix Users Wix Experts and Agencies Pro Developers Proficient with Wix features Use Wix for some projects but do Have never used or Can easily use the non- projects on other platforms as well considered Wix coding elements of Due to Wix Code, we expect more Looking
Slide 55: Types of Wix Code Users
Types of Wix Code Users Wix Users Wix Experts and Agencies Pro Developers Proficient with Wix features Use Wix for some projects but do Have never used or Can easily use the non- projects on other platforms as well considered Wix coding elements of Due to Wix Code, we expect more Looking
Slide 56: First Ever Wix Expert Convention
First Ever Wix Expert Convention - Miami, May 2018 56
Slide 57: Nayeli Gomez
Case study Nayeli Gomez Wix user since 2010 57
Slide 58: Code Queen Tutorial YouTube Channel
Code Queen Tutorial YouTube Channel 58
Slide 59: In 2018, we're building an ecosystem
In 2018, we’re building an ecosystem for web designers and developers with the tools and resources to successfully grow and manage their business. 59
Slide 60: Funnel Optimization
Funnel Optimization 60
Slide 61: We test everything.
We test everything. We did 11,000 tests across the company in 2017. 61
Slide 62: Before
Wix What kind of website do you want to create? Business > Designer > Blog > Online Store > Restaurants & Food > Beauty & Wellness » Photography » ‘Accommodation > Portfolio & CV > Music » Events > Other >
Slide 63: Wix onboarding questions
wix We want your Wix experience to be perfect for your needs. Answer a few questions to help us get to know you better. Skip
Slide 64: Wix onboarding questions
Wix We want your Wix experience to be perfect for your needs. Answer a few questions to help us get to know you better.
Slide 65: Improving Customer Support
Improving Customer Support 65
Slide 66: Wix Answers
Wix Answers Increased headcount 3x since 2016 Call back service within 2 minutes Opening Europe customer support in Q4’18 All with minimal effect on gross margin 66
Slide 67: Optimization of Marketing Efforts
Optimization of Marketing Efforts 67
Slide 68: Our Team
Our Team 220 employees 17 languages 18 different countries of origin ALL marketing activities are done in house 68
Slide 69: In 2017, We Moved Away from TV to ONLINE
In 2017, We Moved Away from TV to ONLINE TV & Radio 6% 28% TV & Radio 72% Online 94% Online 2016 Total Investment: $84M 2017 Total Investment : $118M 69
Slide 70: Intent-Driven Global Branding
Intent-Driven Global Branding Number of Campaigns Over 60 Over 30 2016 2017 70
Slide 71: '17-'18 Campaigns
Diego Ribas Wix Music x PT, FR, TR ’17-’18 Campaigns Website Launch LiveNation Shoot - IL Campaign TR, DE, JP Jay Pharoah Wix User Shoot - IL Dribbble Production - IL Shoot - LA Campaign Direct Response Shoot - IL WixCode 48h Home Again Didi Gregorious Wix Rhett & Link Hackathon Shoot Movie Release
Slide 72: Creative
WACHO TYPICAL SPJ
Slide 73: Creative
Creative 73
Slide 74: Global Approach
Global Approach 17 Languages 191 Countries 74
Slide 75: The Results
The Results Online Impressions Worldwide Over 3B Over 1B 2016 2017 75
Slide 76: Building the Brand
Building the Brand 76
Slide 77: We're building Wix to be one of the top 100 brands
We’re building Wix to be one of the top 100 brands in the world 77
Slide 78: Strongest brand in the industry
is the strongest brand in the industry 78
Slide 79: Highest Searched Brand in Category
Highest Searched Brand in Category Avg. Monthly Search Queries per Search Term Worldwide Keyword (by relevance) Avg. monthly searches (Jan-Mar 2018) 4,090,000 3,350,000 3,350,000 1,000,000 823,000 79
Slide 80: Brand Building
Brand Building Bringing users through other channels Partnerships Super Bowl Influencer Marketing Podcasts and more 80
Slide 81: Global Partnerships
Global Partnerships Partnerships are a great way to reach new audiences in an engaging way. NY Yankees and Manchester City FC partnerships keep going strong. In 2017, we partnered up with FC Flamengo from Rio de Janeiro, Brazil. 81
Slide 82: We have maintained our marketing efficiency
We have maintained our marketing efficiency while our marketing investment more than doubled over the last three years. 82
Slide 83: How our Business Model Drives Growth
How our Business Model Drives Growth Nir Zohar, President & COO ANALYST& INVESTOR DAY 2018 WiXcom
Slide 84: Overview
Overview ▪ Subscription + freemium drives consistency and predictability ▪ Marketing driven by Time to Return On Investment ▪ Strong cohort behavior with no churn ▪ Significant cohort value 84
Slide 85: Registered User
Registered User Created an account, for free User Cohort Aggregation of users added in given time period Premium Subscription A package purchased by a user; a single user can purchase more than one subscription 85
Slide 86: Subscription + Freemium
Subscription + Freemium 86
Slide 87: Journey of a User
Journey of a User Visits Registers Creates a Finishes Purchases a Wix.com with site with site and Premium via free e-mail Wix Editor publishes Subscription or paid address or Wix ADI to the web package channel Free Subscription 87
Slide 88: Consistent Behavior Over the Long Term
Consistent Behavior Over the Long Term Active Premium Subscriptions from Q1 User Cohorts New Registered Users 227,642 Q1’18 - 5,925,513 213,370 Q1’17 - 5,875,165 178,663 174,616 Q1’16 - 5,305,726 Q1’15 - 4,568,323 135,749 126,962 Q1’14 - 4,089,253 114,278 102,980 Q1’13 - 3,714,472 92,019 78,143 Q1’1
Slide 89: Consistent Cohort Behavior Over the Long Term
Consistent Cohort Behavior Over the Long Term Active Premium Subscriptions from Q1 User Cohorts New Registered Users Registered User: created a free account on Wix User Cohort: total number of Registered Users in a given time period Q1’18 - 5,925,513 227,642 213,370 Q1’17 - 5,875,165 178,663 174,616
Slide 90: Consistent Cohort Behavior Over the Long Term
Consistent Cohort Behavior Over the Long Term Active Premium Subscriptions from Q1 User Cohorts Premium Subscription: a package purchased by a user generating New Registered Users collections; a single user can purchase more than one subscription Active Premium Subscriptions: total number of Premium
Slide 91: Behavior is Consistent for All Cohorts
Behavior is Consistent for All Cohorts Active Premium Subscriptions from ALL monthly User Cohorts since 2010 227,642 174,616 135,749 ה 114,278 78,143 34,494 26,740 17,792 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 91
Slide 92: Consistent = Predictable
Consistent = Predictable 227,642 Q1’18 - 5,925,513 213,370 Q1’17 - 5,875,165 178,663 174,616 Q1’16 - 5,305,726 Q1’15 - 4,568,323 135,749 126,962 Q1’14 - 4,089,253 114,278 102,980 Q1’13 - 3,714,472 92,019 78,143 Q1’12 - 2,651,656 62,071 Q1’11 - 1,833,897 33,747 34,494 29,612 26,740 17,792 Q1’10 - 919
Slide 93: Marketing Driven by TROI
Marketing Driven by TROI 93
Slide 94: What is TROI?
What is TROI? 94
Slide 95: What is TROI?
What is TROI? Time to Return On (Marketing) Investment 95
Slide 96: Marketing Investment Made Up Front
Marketing Investment Made Up Front Cumulative Collections Marketing Investment $(10M) Quarter 1 96
Slide 97: Within the First Quarter, We Start to See Returns
Within the First Quarter, We Start to See Returns Return 60% Cumulative Collections $6M Marketing Investment $(10M) Quarter 1 97
Slide 98: We Continue to See Returns Through the Second Quarter
We Continue to See Returns Through the Second Quarter Return 60% 80% Cumulative Collections $6M $8M Marketing Investment $(10M) Quarter 1 Quarter 2 98
Slide 99: Return 100% of Marketing Dollars by the Third Quarter
Return 100% of Marketing Dollars by the Third Quarter Return 60% 80% 100% Cumulative $8M $10M Collections $6M Marketing Investment $(10M) Quarter 1 Quarter 2 Quarter 3 99
Slide 100: and the Returns Continue
and the Returns Continue Return 60% 80% 100% 120%+ $10M $12M+ Cumulative Collections $6M $8M Marketing Investment $(10M) Quarter 1 Quarter 2 Quarter 3 Quarter 4 & beyond 100
Slide 101: TROI Drives Efficient Marketing
TROI Drives Efficient Marketing … After 17 Quarters 4.6x … After 13 Quarters 3.8x $81 … After 9 Quarters $33 ToTo Date Date 2.7x … After 5 Quarters $73 To $33 $40 … After 1 Quarter 1.7x $33 $68 Date To To Date Date $18 To To Date 0.6x $33 To$55 Date Date $19 Q1’14 Cohort $33 $25 To Date To Q1’15 Coh
Slide 102: No Churn
No Churn 102
Slide 103: Subscription Retention: Q1'12 Cohort
Our statement, June 2016 Subscription Retention: Q1’12 Cohort New Registered Users 153,423 1Q16 5,305,726 1Q15 126,962 123,985 4,568,323 1Q14 104% Retention 102,980 4,089,253 after 4+ years 92,019 80,818 1Q13 3,714,472 1Q12 62,071 2,651,656 1Q11 35,326 27,397 1,833,897 33,747 18,940 29,612 1Q10 18,5
Slide 104: Today: Subscription Retention Remains High
Today: Subscription Retention Remains High Active Premium Subscriptions from Q1 User Cohorts New Registered Users 227,642 Q1’18 - 5,925,513 213,370 Q1’17 - 5,875,165 178,663 174,616 Q1’16 - 5,305,726 Q1’15 - 4,568,323 135,749 126,962 Q1’14 - 4,089,253 114,278 102,980 102% Retention 92,019 after 6+ y
Slide 105: Historically Strong Cohort Retention
Our statement, June 2016 Historically Strong Cohort Retention Subscriptions: Quarters Subscription Subscriptions: Current Quarter Since Creation Retention: Creation Quarter (Q1 ’16) (at June 2016) (at June 2016) Q1'16 127K 127K 1 Q1'15 103K 153K 5 149% Q1'14 92K 124K 9 134% Q1'13 62K 81K 13 129% Q1'
Slide 106: Today: Historically Strong Cohort Retention Continues
Today: Historically Strong Cohort Retention Continues Subscriptions: Quarters Subscription Subscriptions: Quarters Subscription Subscriptions: Current Quarter Since Creation Retention: Current Quarter Since Creation Retention: Creation Quarter (Q1 ’16) (at June 2016) (at June 2016) (at Q1 ‘18) (at J
Slide 107: Today: Historically Strong Cohort Retention Continues
Today: Historically Strong Cohort Retention Continues Subscriptions: Quarters Subscription Subscriptions: Quarters Subscription Subscriptions: Current Quarter Since Creation Retention: Current Quarter Since Creation Retention: Creation Quarter (Q1 ’16) (at June 2016) (at June 2016) (at Q1 ‘18) (at J
Slide 108: Today: Historically Strong Cohort Retention Continues
Today: Historically Strong Cohort Retention Continues Subscriptions: Quarters Subscription Subscriptions: Quarters Subscription Subscriptions: Current Quarter Since Creation Retention: Current Quarter Since Creation Retention: Creation Quarter (Q1 ’16) (at June 2016) (at June 2016) (at Q1 ‘18) (at J
Slide 109: Today: Historically Strong Cohort Retention Continues
Today: Historically Strong Cohort Retention Continues Subscriptions: Quarters Subscription Subscriptions: Quarters Subscription Subscriptions: Current Quarter Since Creation Retention: Current Quarter Since Creation Retention: Creation Quarter (Q1 ’16) (at June 2016) (at June 2016) (at Q1 ‘18) (at J
Slide 110: Today: Historically Strong Cohort Retention Continues
Today: Historically Strong Cohort Retention Continues Subscriptions: Quarters Subscription Subscriptions: Quarters Subscription Subscriptions: Current Quarter Since Creation Retention: Current Quarter Since Creation Retention: Creation Quarter (Q1 ’16) (at June 2016) (at June 2016) (at Q1 ‘18) (at J
Slide 111: Cohort Behavior Creates No Churn in Collections
Cohort Behavior Creates No Churn in Collections 2016 2017 Collections $342M $340M $356M $112M $468M +5% without Growth from additional New Cohort marketing investment Total 2016 and Prior 2016 and Prior User Additional Growth 2017 User Cohort Total User Cohorts Cohorts from Prior Cohorts 111
Slide 112: Cohort Behavior Creates No Churn in Collections
Cohort Behavior Creates No Churn in Collections 2016 2017 Collections $342M $342M $356M $112M $468M Growth from New Cohort Total 2016 and Prior 2016 and Prior User Additional Growth 2017 User Cohort Total User Cohorts Cohorts from Prior Cohorts 112
Slide 113: Cohort Behavior Creates No Churn in Collections
Cohort Behavior Creates No Churn in Collections 2016 2017 Collections $342M $342M $359M $112M $468M +5% without Growth from additional New Cohort marketing investment Total 2016 and Prior 2016 and Prior User Additional Growth 2017 User Cohort Total User Cohorts Cohorts from Prior Cohorts 113
Slide 114: Cohort Behavior Creates No Churn in Collections
Cohort Behavior Creates No Churn in Collections 2016 2017 Collections $342M $342M $359M $125M $468M +5% without Growth from additional New Cohort marketing investment Total 2016 and Prior 2016 and Prior User Additional Growth 2017 User Cohort Total User Cohorts Cohorts from Prior Cohorts 114
Slide 115: Cohort Behavior Creates No Churn in Collections
Cohort Behavior Creates No Churn in Collections 2016 2017 Collections $342M $342M $359M $125M $484M +5% without Growth from additional New Cohort marketing investment Total 2016 and Prior 2016 and Prior User Additional Growth 2017 User Cohort Total User Cohorts Cohorts from Prior Cohorts 115
Slide 116: Value Creation
Value Creation 116
Slide 117: Significant Value Creation: Q1'12 Cohort
Significant Value Creation: Cumulative Collections as of Q1’18: Q1’12 Cohort $33M (7x ROI) 227,642 213,370 178,663 174,616 135,749 126,962 114,278 102,980 78,143 Marketing 92,019 investment: 62,071 $4.6 million 34,494 33,747 26,740 17,792 29,612 18,513 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Slide 118: Creating Significant Value with Most Recent User Cohort
Creating Significant Value with Most Recent User Cohort 227,642 213,370 178,663 174,616 135,749 126,962 114,278 102,980 92,019 78,143 Marketing Collections as of investment: Q1’18: 62,071 34,494 $44 million $25 million 33,747 26,740 17,792 (0.6x ROI) 29,612 18,513 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Slide 119: Creating Significant Value: Q1'18 Cohort
Total Projected Collections Creating Significant Value: Q1’18 Cohort (8 years): $370M (8.4x) 227,642 213,370 178,663 174,616 135,749 126,962 114,278 102,980 92,019 78,143 Marketing investment: 62,071 34,494 $44 million 33,747 26,740 17,792 29,612 18,513 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1
Slide 120: Every new 100K Net Subscriptions
Every new 100K Net Subscriptions = $165 Million in Collections over 8 years at an 80% Gross Margin Note: Projected collections based on current cohort data 120
Slide 121: Existing Cohorts are a Growing Source of Future Collections
Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 2010 Q4'11 Q1'12 Q2'12 Collections Q3'12 Q4'12 Q1'13 2011 Q2'13 Q3'13 Q4'13 Q1'14 Note: Data represents actual Collections from Q1’10 – Q1’18 Q2'14 2012 Q3'14 Q4'14 Q1'15 Q2'15 Actual Collections From Q1’10 – Q1’18 Cohorts Q3'15 Q4'15 2013 Q1'16 Q2'16 Q3'16
Slide 122: Existing Cohorts are a Growing Source of Future Collections
Existing Cohorts are a Growing Source of Future Collections Actual and Potential Future Collections From Q1’10 – Q1’18 Cohorts $4.3 Billion Future collections from existing cohorts Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14
Slide 123: Key Takeaways
Key Takeaways ▪ Consistent and predictable cohort behavior with NO churn ▪ Existing cohorts expected to generate future collections of $4.3 Billion ▪ Every new 100K Net Subscriptions = $165 Million in Collections over 8 years at an 80% Gross Margin 123
Slide 124: Our Plans for Continuing Profitable Growth
Our Plans for Continuing Profitable Growth Lior Shemesh, CFO ANALYSTS. INVESTOR DAY 2018 WiXcom
Slide 125: Overview
Overview Strong business model Tremendous scale Rare combination of revenue growth and free cash flow generation Attractive cohort economics Multiple drivers of continued top line growth On track to reach our financial targets 125
Slide 126: 40%+ Growth Over Last Three Years
40%+ Growth Over Last Three Years… 35%-36% Collections Y/Y Revenue 40% ($ millions) $651- ($ millions) Y/Y 41% 657 Y/Y $594- 47% 597 $484 Y/Y 42% Y/Y 43% $426 41% $342 Y/Y Y/Y 43% Y/Y $290 $242 $204 $171 $142 $99 $80 2013 2014 2015 2016 2017 2018E 2013 2014 2015 2016 2017 2018E Note: 2018E based on
Slide 127: And Increasing Free Cash Flow Generation
…And Increasing Free Cash Flow Generation 41%-44% Free Cash Flow Y/Y ($ millions) $100- 95% 102 Y/Y $71 149% Y/Y $36 $15 2015 2016 2017 2018E Note: 2018E based on guidance provided May 9, 2018; Free Cash Flow defined as net cash provided by operating activities less capital expenditures 127
Slide 128: Strong Financial Efficiency Score Compared To SaaS Peers
Strong Financial Efficiency Score Compared To SaaS Peers 2017-2018E Revenue growth % 2018E FCF % of Revenue 71% 57% 54% 53% 52% 47% 47% 39% 38% 37% 31% 31% 28% 128
Slide 129: Multiple Drivers for Continued Top Line Growth
Multiple Drivers for Continued Top Line Growth Sources of Existing New Collections Cohorts Cohorts TAM Expansion Key Drivers of User Conversion ARPS Collections Maintain and Growth Improve Product Experience Geographic Investment Marketing Expansion Product Development Focus 129
Slide 130: Driving Growth: Existing Cohorts
Driving Growth: Existing Cohorts Sources of Existing New Collections Cohorts Cohorts TAM Expansion Key Drivers of User Conversion ARPS Collections Maintain and Growth Improve Product Experience Geographic Investment Marketing Expansion Product Development Focus 130
Slide 131: Stable Cohorts Provide Base Growth
Stable Cohorts Provide Base Growth Annual collections by user cohort ($ millions) User Cohort Collections In 2016: $342 million ($ millions) In 2017: $359 million $500 $400 $300 $200 $100 $0 2010 2011 2012 2013 2014 2015 2016 2017 2010 & Prior 2011 2012 2013 2014 2015 2016 2017 131
Slide 132: Existing Cohorts will Fuel Future Collections
Existing Cohorts will Fuel Future Collections Actual and Potential Future Collections From Q1’10 – Q1’18 Cohorts $4.3 Billion Future collections from existing cohorts Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q
Slide 133: Driving Growth: New Cohorts
Driving Growth: New Cohorts Sources of Existing New Collections Cohorts Cohorts TAM Expansion Key Drivers of User Conversion ARPS Collections Maintain and Growth Improve Product Experience Geographic Investment Marketing Expansion Product Development Focus 133
Slide 134: Excellent Track Record of Increasing KPIs
Excellent Track Record of Increasing KPIs New Registered Prem. Subs after 1st Users (000’s) Quarter (000’s) ARPS +30% +107% +11% 5,926 213 $154 4,568 $138 103 Q1’15 Q1’18 Q1’15 Q1’18 Q1’15 Q1’18 Note: Data as of March 31, 2018 134
Slide 135: Driving Growth: TAM Expansion
Driving Growth: TAM Expansion Sources of Existing New Collections Cohorts Cohorts TAM Expansion Key Drivers of User Conversion ARPS Collections Maintain and Growth Improve Product Experience Geographic Investment Marketing Expansion Product Development Focus 135
Slide 136: Addressable Market Expansion
Addressable Market Expansion $30B+ Existing Market 3.5 million Wix premium sites DIY website builders Sources: Verisign, WhoIs database, internal data 136
Slide 137: Wix Code Expands Addressable Market by 10X
Wix Code Expands Addressable Market by 10X ~330M $300B+ Existing active domains Every time we improve capabilities at Wix, the DIY website builder opportunity expands Wix Code expands the entire opportunity 3.5 million Wix premium sites DIY website builders Sources: Verisign, WhoIs database, int
Slide 138: Wix Code monetization framework
Wix Code monetization framework Users Wix Users Wix Experts and Agencies Pro Developers Opportunit Increases Considering higher pricing: y in conversion Higher tier packages Variable pricing based on usage Subscription + variable pricing combination 138 Other opportunities under consideratio
Slide 139: Manage & Grow Your Business
Manage & Grow Your Business Multi-$100 Billion+ Mobile Customer Marketing Management E-mail CRM SEO Support Logos Vertical ERPs Website E-commerce Hospitality Building Communication Restaurants E-mail Music Productivity Photography $300 Billion+ 139
Slide 140: Target Model
Target Model 140
Slide 141: R&D and FCF Margins Can Change Based on Growth State
R&D and FCF Margins Can Change Based on Growth State High collections growth Steady state growth R&D investment Increase Decrease Y/Y growth Modest FCF Margins Increase Increase High collections growth will push out timing of reaching target model but will result in higher FCF at steady state 141
Slide 142: New Products are a Growing Part of R&D Investment
New Products are a Growing Part of R&D Investment New Product R&D Investment (% of collections) Base R&D Investment (% of collections) 2016 2017 2018E 142
Slide 143: On a path to reaching our financial targets
On a path to reaching our financial targets 143
Slide 144: Continuing To Drive Leverage In The Model
Continuing To Drive Leverage In The Model Non-GAAP 2015 2016 2017 2018E Target Model (Steady State) Gross margin (% of revenue) 83% 85% 85% 80% 80-82% R&D (% of collections) 28% 26% 25% 18-20% S&M (% of collections) 48% 44% 40% 35-36% 28-30% G&A (% of collections) 6% 6% 7% 6-7% FCF margin (% of 6% 1
Slide 145: Committed to Reducing Share Dilution
Committed to Reducing Share Dilution 145
Slide 146: Implementing Cashless Net Exercise
Implementing Cashless Net Exercise Current Cashless Net Upon exercise of option, Wix will issue only the net Exercise shares Remaining shares withheld at fair market value Exercised options 100 100 equal to the exercise price and will not be returned to shares reserved for issuance under our inc
Slide 147: Takeaways
Takeaways Proven business model and strong track record Confident in ability to generate growth Expanding product offering resulting in expanding TAM Confident in achieving target model 147
Slide 148: Highlights
Highlights 130M Registered Users with 2M New registered users every month Website building is a +$300B market: Wix Code expands addressable market by 10x Existing cohorts expected to generate future collections of $4.3 Billion Every new 100K Net Subscriptions = $165 Million in Collections ov
Slide 149: Appendix
Appendix ANALYST& INVESTOR DAY 2018 WiXcom
Slide 150: Non-GAAP Financial Results
Non-GAAP Financial Results 2017 2018 Full Year in 000s Q1 Q1 2016 2017 Revenues $92,538 $137,775 $290,103 $425,636 Collections $114,546 $159,655 $342,069 $483,989 Non-GAAP Gross Profit $78,209 $109,952 $246,614 $359,708 Gross Margin % 85% 80% 85% 85% Non-GAAP R&D expenses $26,094 $36,785 $87,570 $12
Slide 151: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures 2016 2017 2018 in 000s Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Revenue $61,586 $68,730 $75,611 $84,176 $92,538 $103,522 $111,031 $118,545 $137,775 Change in deferred revenue $14,108 $12,723 $11,659 $13,476 $22,008 $13,599 $9,088 $13,658 $21,880 Collections $75,694 $81,
Slide 152: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures 2016 2017 2018 in 000s Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Research and development (GAAP) $24,472 $25,483 $26,536 $28,877 $32,669 $36,749 $40,252 $43,965 $46,502 Options compensation $3,111 $3,558 $3,718 $4,156 $4,726 $6,586 $7,190 $7,725 $8,485 Amortization $137
Slide 153: Reconciliation of GAAP to Non-GAAP Measures
Reconciliation of GAAP to Non-GAAP Measures 2016 2017 2018 in 000s Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 GAAP Operating Loss ($19,768) ($10,490) ($9,032) ($4,742) ($20,471) ($10,563) ($11,454) ($7,523) ($18,452) Share Based Compensation $6,137 $6,927 $7,164 $7,820 $8,982 $11,979 $13,035 $13,704 $15,674 Amortiz