Q Earnings Results. Supplementary Data, Financial Tables and Non-GAAP Reconciliations

Transcription

1 Q Earnings Results Supplementary Data, Financial Tables and Non-GAAP Reconciliations

2 Reconciliation to U.S. GAAP Financial Information The following presentation includes certain non-gaap financial measures as defined in Regulation G under the Securities Exchange Act of We refer you to the reconciliations included in our earnings press release available on our website in connection with our earnings call, which reconciles the non-gaap financial measures included in the following presentation to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP

3 Wix.com Ltd. - Selected Company Metrics and Financials (USD in thousands, unless otherwise noted) KPI's Full Year Number of registered users at period end 46,215 50,251 54,112 57,945 62,514 67,513 72,289 76,965 82,271 87,405 92,374 42,126 57,945 76,965 % Y/Y 45% 41% 39% 38% 35% 34% 34% 33% 32% 29% 28% 49% 38% 33% % Q/Q 10% 9% 8% 7% 8% 8% 7% 6% 7% 6% 6% Number of premium subscriptions at period end 908 1,019 1,125 1,233 1,371 1,503 1,643 1,767 1,938 2,121 2, ,233 1,767 % Y/Y 65% 62% 59% 56% 51% 48% 46% 43% 41% 41% 40% 68% 56% 43% % Q/Q 15% 12% 10% 10% 11% 10% 9% 8% 10% 9% 8% Revenue 28,847 33,931 37,504 41,559 44,524 48,581 53,582 56,831 61,586 68,730 75,611 80, , ,518 % Y/Y 86% 82% 75% 67% 54% 43% 43% 37% 38% 41% 41% 84% 76% 43% % Q/Q 16% 18% 11% 11% 7% 9% 10% 6% 8% 12% 10% Collections 37,515 39,875 44,586 49,279 55,869 57,368 61,580 66,870 75,694 81,453 87,270 98, , ,687 % Y/Y 91% 79% 70% 61% 49% 44% 38% 36% 35% 42% 42% 88% 74% 41% % Q/Q 23% 6% 12% 11% 13% 3% 7% 9% 13% 8% 7% Collections on Constant Dollars* 50,634 59,608 61,732 65,743 70,707 77,484 82,448 87, ,790 % Y/Y 66% 59% 55% 47% 43% 39% 44% 43% 51% Collections on Constant Dollars** 50,470 57,698 57,505 62,215 67,789 75,564 80,614 87, ,207 % Q/Q 13% 17% 3% 8% 10% 13% 6% 8% Free Cash Flow (371) (3,249) (2,928) 126 (2,662) 3,397 5,402 8,397 (2,134) 10,185 9,424 1,173 (6,422) 14,534 Operating loss (non-gaap) (11,122) (10,065) (10,085) (9,852) (13,125) (6,832) (4,893) (4,417) (12,261) (2,980) (1,167) (19,473) (41,124) (29,267) Adjusted EBITDA (2,887) (4,276) (2,789) (1,309) (493) 3,499 4,689 7,025 2,664 10,682 11,365 (1,897) (11,260) 14,721 * Based on parallel quarter previous year exchange rates ** Based on previous quarter current year exchange rates Reconciliation of revenues to collections Full Year Revenue 28,847 33,931 37,504 41,559 44,524 48,581 53,582 56,831 61,586 68,730 75,611 80, , ,518 Change in deferred revenue 8,668 5,944 7,082 7,720 11,345 8,787 7,998 10,039 14,108 12,723 11,659 18,200 29,414 38,169 Collections 37,515 39,875 44,586 49,279 55,869 57,368 61,580 66,870 75,694 81,453 87,270 98, , ,687 Reconciliation of free cash flow Full Year Net cash provided by (used in) operating activities 1,097 (1,738) (1,226) 1,064 (581) 5,248 6,687 9,522 (925) 11,314 10,470 4,243 (803) 20,876 Capital expenditures (1,468) (1,511) (1,702) (938) (2,081) (1,851) (1,285) (1,125) (1,209) (1,129) (1,046) (3,070) (5,619) (6,342) Free cash flow (371) (3,249) (2,928) 126 (2,662) 3,397 5,402 8,397 (2,134) 10,185 9,424 1,173 (6,422) 14,534

4 GAAP P&L Full Year Revenue 28,847 33,931 37,504 41,559 44,524 48,581 53,582 56,831 61,586 68,730 75,611 80, , ,518 Cost of revenue 5,240 6,398 6,910 7,560 7,811 8,390 9,162 9,607 10,507 11,018 11,024 15,257 26,108 34,970 Gross profit 23,607 27,533 30,594 33,999 36,713 40,191 44,420 47,224 51,079 57,712 64,587 65, , ,548 Gross margin % 82% 81% 82% 82% 82% 83% 83% 83% 83% 84% 85% 81% 82% 83% Operating expenses: Research and development 11,966 13,729 15,573 16,564 17,448 18,233 20,065 21,901 24,472 25,483 26,536 29,660 57,832 77,647 Selling and marketing 22,178 23,708 24,788 27,068 32,006 28,237 29,437 30,330 40,454 36,026 40,010 53,776 97, ,010 General and administrative 3,960 3,611 4,011 4,221 4,587 4,495 5,288 5,156 5,921 6,693 7,073 8,307 15,802 19,526 Total operating expenses 38,104 41,048 44,372 47,853 54,041 50,965 54,790 57,387 70,847 68,202 73,619 91, , ,183 Operating loss (14,497) (13,515) ($13,778) ($13,854) (17,328) (10,774) (10,370) (10,163) (19,768) (10,490) (9,032) (26,527) (55,643) (48,635) Financial expense (income), net (84) (59) (1,463) (538) (1,857) (505) 105 (297) 603 (2,144) (77) Other expenses (1) (1) Tax expenses , ,572 3,052 2,765 Net loss (14,917) (13,801) (12,772) (15,076) (16,026) (12,279) (11,724) (11,305) (19,912) (11,420) (9,643) (28,720) (56,565) (51,334) Basic and diluted net loss per share (GAAP) ($0.40) ($0.37) ($0.34) ($0.39) ($0.41) ($0.31) ($0.30) ($0.28) ($0.49) ($0.28) ($0.23) ($3.33) ($1.49) ($1.30)

5 GAAP to non-gaap reconciliation Full Year Cost of revenues (GAAP) 5,240 6,398 6,910 7,560 7,811 8,390 9,162 9,607 10,507 11,018 11,024 15,257 26,108 34,970 Options compensation ,005 1,353 Cost of sales (non-gaap) 5,062 6,092 6,636 7,313 7,516 8,140 8,734 9,226 10,079 10,543 10,558 14,767 25,103 33,617 % of revenue 18% 18% 18% 18% 17% 15% 16% 16% 16% 15% 14% 18% 18% 17% Gross profit (non-gaap) 23,785 27,839 30,868 34,246 37,008 45,442 44,848 47,604 51,507 58,187 65,053 65, , ,902 Gross margin % (non-gaap) 82% 82% 82% 82% 83% 85% 84% 84% 84% 85% 86% 82% 82% 86% Research and development (GAAP) 11,966 13,729 15,573 16,564 17,448 18,233 20,065 21,901 24,472 25,483 26,536 29,660 57,832 77,647 Options compensation 1,255 1,551 1,735 2,053 1,959 1,831 2,592 2,852 3,111 3,558 3,718 3,149 6,594 9,234 Aquisition related expenses 1, Amortization Research and development (non-gaap) 10,711 12,158 13,824 14,429 15,384 16,297 17,368 18,929 20,041 21,392 22,167 26,511 51,122 67,978 % of revenue 37% 36% 37% 35% 35% 30% 32% 33% 33% 31% 29% 33% 36% 33% Selling and marketing (GAAP) 22,178 23,708 24,788 27,068 32,006 28,237 29,437 30,330 40,454 36,026 40,010 53,776 97, ,010 Options compensation ,122 1,237 1,185 2,533 3,077 Amortization Selling and marketing (non-gaap) 21,644 23,091 24,097 26,341 31,357 27,490 28,526 29,359 39,423 34,854 38,723 52,591 95, ,732 % of revenue 75% 68% 64% 63% 70% 51% 53% 52% 64% 51% 51% 65% 67% 57% General and administrative (GAAP) 3,960 3,611 4,011 4,221 4,587 4,495 5,288 5,156 5,921 6,693 7,073 8,307 15,803 19,526 Options compensation ,195 1,009 1,441 1,424 1,617 1,772 1,743 2,230 3,805 5,069 Withdrawn secondary offering expenses Acquisition related expenses General and administrative (non-gaap) 2,552 2,655 3,032 3,328 3,392 3,486 3,847 3,733 4,304 4,921 5,330 6,077 11,568 14,457 % of revenue 9% 8% 8% 8% 8% 7% 7% 7% 7% 7% 7% 8% 8% 7% Financial expense (income), net (GAAP) (84) (59) (1,463) (538) (1,857) (505) 105 (297) 603 (2,144) (77) Compensation expenses related to warrants Financial expense (income), net (non-gaap) (84) (59) (1,463) (538) (1,857) (505) 105 (297) 330 (2,144) (77) Tax expenses (GAAP) , ,572 3,052 2,765 Tax benefit related to exercise of options , , Tax expenses (non-gaap) ,132 1,253 2,154

6 Non-GAAP P&L Full Year Revenue 28,847 33,931 37,504 41,559 44,524 48,581 53,582 56,831 61,586 68,730 75,611 80, , ,518 Cost of revenue 5,062 6,092 6,636 7,313 7,516 8,140 8,734 9,227 10,079 10,543 10,558 14,767 25,103 33,617 Gross profit 23,785 27,839 30,868 34,246 37,008 40,441 44,848 47,604 51,507 58,187 65,053 65, , ,901 Gross margin % 82% 82% 82% 82% 83% 83% 84% 84% 84% 85% 86% 82% 82% 83% Operating expenses: Research and development 10,711 12,158 13,824 14,428 15,384 16,297 17,368 18,928 20,041 21,392 22,167 26,511 51,120 67,977 Selling and marketing 21,644 23,091 24,097 26,341 31,357 27,490 28,526 29,360 39,423 34,854 38,723 52,591 95, ,733 General and administrative 2,552 2,655 3,032 3,329 3,392 3,486 3,847 3,733 4,304 4,921 5,330 6,077 11,569 14,458 Total operating expenses 34,907 37,904 40,953 44,098 50,133 47,273 49,741 52,021 63,768 61,167 66,220 85, , ,168 Operating loss (non-gaap) (11,122) (10,065) (10,085) (9,852) (13,125) (6,832) (4,893) (4,417) (12,261) (2,980) (1,167) (19,473) (41,124) (29,267) Financial expense (income), net (84) (59) (1,463) (538) (1,857) (505) 105 (297) 330 (2,144) (77) Other expenses (1) (1) Tax expenses ,132 1,253 2,153 Net loss (non-gaap) (11,316) (10,351) (8,976) (9,604) (11,711) (8,158) (6,088) (5,397) (12,230) (3,713) (1,571) (20,953) (40,247) (31,354) Basic and diluted net loss per share (non-gaap) ($0.30) ($0.27) ($0.24) ($0.25) ($0.30) ($0.21) ($0.15) ($0.13) ($0.30) ($0.09) ($0.04) ($2.64) ($1.06) ($0.80) Depreciation ,203 1,472 1,399 1,244 1,206 1,198 1,229 2,662 4,999 Realized gains (losses) on hedging transactions (156) (152) ,125 1, (152) 282 3,492 Deferred Revenue 8,668 5,944 7,082 7,720 11,345 8,787 7,998 10,039 14,108 12,723 11,659 18,200 29,414 38,169 Prepaid Domain Registration Costs (748) (564) (570) (612) (764) (690) (706) (512) (744) (509) (390) (1,701) (2,494) (2,673) Adjusted EBITDA (2,886) (4,250) (2,789) (1,309) (493) 3,499 4,689 7,025 2,664 10,682 11,365 (1,897) (11,260) 14,721

7 Wix.com Ltd. - Selected Company Metrics and Financials (USD in thousands) Period ended BALANCE SHEET December 31, September 30, (audited) (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 39,226 $ 57,948 Short term deposits 70,773 87,525 Restricted cash and deposit 3,851 1,548 Trade receivables 6,461 7,614 Prepaid expenses and other current assets 11,989 19,991 Total current assets 132, ,626 Property, equipment and software, net Long-Term Assets: Property and equipment, net 8,734 8,316 Prepaid expenses and other long-term assets 2,200 2,506 Intangible assets and goodwill, net 6,199 5,639 Total long-term assets 17,133 16,461 Total assets 149, ,087 Liabilities and Shareholder's Deficiency Current Liabilities: Trade payables $ 12,280 $ 16,981 Employees and payroll accruals 15,210 21,453 Deferred revenues 100, ,075 Accrued expenses and other current liabilities 20,281 16,892 Total current liabilities 148, ,401 Long term deferred revenues 4,206 8,182 Long term deferred tax liability Other long-term liabilities Total long-term liabilities 4,906 8,801 Total liabilities 153, ,202 Shareholders' Deficiency Ordinary shares Additional paid-in capital 192, ,707 Other comprehensive income (loss) (248) 501 Accumulated deficit (196,412) (237,387) Total shareholders' deficiency (3,805) (8,115) Total liabilities and shareholders' deficiency $ 149,433 $ 191,087

8 CASH FLOW STATEMENT Three Months Ended September 30, (unaudited) (unaudited) OPERATING ACTIVITIES: Net loss $ (11,724) $ (9,643) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 1,472 1,198 Amortization Share based compensation expenses 5,322 7,164 Tax benefit related to exercise of share options Decrease (increase) in accrued interest and exchange rate on short term and long term deposits 174 (160) Deferred income taxes, net (27) (27) Increase in trade receivables (2,418) (621) Decrease (increase) in prepaid expenses and other current and long-term assets 3,205 (4,364) Increase in trade payables 2, Increase (decrease) in employees and payroll accruals (2,465) 2,896 Increase in short term and long term deferred revenues 8,238 11,659 Increase in accrued expenses and other current liabilities 2,325 1,152 Net cash provided by operating activities 6,687 10,470 INVESTING ACTIVITIES: Proceeds from short-term deposits and restricted deposits 9,640 12,323 Investment in short-term deposits and restricted deposits (20,717) (24,150) Purchase of property and equipment (1,285) (1,046) Net cash used in investing activities (12,362) (12,873) FINANCING ACTIVITIES: Proceeds from exercise of options and ESPP shares 2,392 7,572 Net cash provided by financing activities 2,392 7,572 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (192) - INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,475) 5,169 CASH AND CASH EQUIVALENTS Beginning of period 43,884 52,779 CASH AND CASH EQUIVALENTS End of period $ 40,409 $ 57,948

9 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, adjusted EBITDA, non-gaap net loss and non-gaap net loss per share (collectively the "non-gaap financial measures") Collections - We define collections as total cash collected by us from our customers in a given period. Collections is calculated by adding the change in deferred revenues for a particular period to revenues for the same period. Collections consists primarily of amounts from annual and monthly premium subscriptions by users, which are deferred and recognized as revenues over the terms of the subscriptions and payments by our users for domains, which are also recognized ratably over the term of the service period. We believe that collections is a leading indicator of the growth of our overall business. Collections is a non-gaap financial measure. We believe that this non-gaap financial measure is useful in evaluating our business because it is a leading indicator of our revenue growth and the growth of our overall business. Nevertheless, this information should be considered as supplemental in nature and is not meant as a substitute for revenues recognized in accordance with U.S. GAAP. Other companies, including companies in our industry, may calculate collections differently or not at all, which reduces their usefulness as a comparative measure. You should consider collections along with other financial performance measures, including revenues, net cash used in operating activities, and our financial results presented in accordance with U.S. GAAP. Adjusted EBITDA - We define this metric is defined as cash flow from operations before changes in working capital, prepaid domain registration costs, interest, bank charges and other financial expenses (income), net unrealized losses (gains) on hedging transactions, other income (expenses), taxes on income, and other unusual or non-recurring expenses. We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results because the exclusion of certain expenses and adding the changes in our deferred revenues and prepaid domain registration costs in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Adjusted EBITDA is a non-gaap financial measure. We believe that this non-gaap financial measure is useful in evaluating our business because the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business and the net cash flow results of our company. Nevertheless, this information should be considered as supplemental in nature and is not meant as a substitute for net loss recognized in accordance with U.S. GAAP. Other companies, including companies in our industry, may calculate adjusted EBITDA differently or not at all, which reduces their usefulness as a comparative measure. You should consider adjusted EBITDA along with other financial performance measures, including revenues, net cash used in operating activities, and our financial results presented in accordance with U.S. GAAP. Non-GAAP net loss - represents net loss calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense and other non-gaap adjustments. Non-GAAP net loss per share represents non- GAAP net loss divided by the weighted average number of shares used in computing GAAP loss per share. 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 it provides 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.

10 Other Key Financial and Operating Metrics We monitor the following key operating and financial metrics to evaluate the growth of our business, measure the effectiveness of our marketing efforts, identify trends affecting our business, formulate financial projections and make strategic decisions: Registered Users - We define this metric as the total number of users, including those who have purchased premium subscriptions, who are registered with Wix.com with a unique address at the end of the period. The length of time that users take following registration to design and publish a website varies significantly from hours to years, and many users never publish a website. We have no means of assessing the level of engagement of a particular user following registration or how close a user is to potentially publishing their website. We view the number of users at the end of a given period as a key indicator of the attractiveness and usability of our product, as well as the strength of our pipeline that can generate premium subscriptions over time. We believe that growth in premium subscriptions will be driven significantly by our ability to add users to our platform and to further enhance our product and service offerings. Premium Subscriptions - We define this metric as the total monthly and annual premium subscriptions as of the end of the period. A single user can purchase multiple premium subscriptions. Because we derive the majority of our revenues and collections from premium subscriptions, we believe that this is a key metric in understanding our growth. The total number of premium subscriptions is also impacted by the renewal rates of our existing premium subscriptions. Premium subscriptions terminate due to an active decision by a user not to renew their subscription or due to the failure of a user to update his or her credit card information upon expiration or termination. Our renewal rates demonstrate our strong value proposition to our premium subscriptions. We observe the average renewal rates of the cohorts of our users with premium subscriptions to measure the effectiveness of our platform and satisfaction of our users. We measure the retention of our premium subscriptions on a cohort basis. Subscriptions that are terminated are replaced by new subscriptions from users from the same cohort, generally at a similar rate. As observed in our first quarter 2010 user cohort, there are more active subscriptions in such cohort at the end of 2014 than existed when the cohort was acquired 20 quarters ago. We believe this demonstrates our strong renewal rates and our ability to replace terminated subscriptions with new subscriptions from the same cohort.