- Strong profitable start to the year with total revenue of
$374.1 million in the first quarter
exceeding expectations, up 10% y/y, marked by acceleration in
Creative Subscriptions revenue growth, up 9% y/y and continued
strong growth in Business Solutions revenue, up 11% y/y
- Intensified focus on driving efficiencies and discipline across
operating cost structure resulted in stronger than expected
FCF1 generation and FCF margin of 12%
-
- Non-GAAP gross margin increased to 67% with non-GAAP Creative
Subscriptions gross margin of 80% – both targets we had anticipated
achieving later in the year
- Highest quarterly non-GAAP operating income in Wix history,
driven by 24% y/y decrease in non-GAAP operating expenses
- Our accelerated profitability reassures our confidence in
achieving "Rule of 40" in 2025, with expectations of significant
cash flow margin expansion
- Power of the Wix brand delivering higher y/y new cohort
bookings while investing ~47% less in acquisition marketing in
Q1'23
- AI technologies driving future growth opportunities with an
exciting pipeline ahead, following many years of leading AI
innovation
NEW
YORK, May 17, 2023 /PRNewswire/
-- Wix.com Ltd. (Nasdaq: WIX) today reported financial
results for the first quarter 2023. In addition, the Company
provided outlook for the second quarter and updated outlook for the
full year 2023. Please visit the Wix Investor Relations website at
https://investors.wix.com/ to view the Q1'23 Shareholder Update and
other materials.
"Wix was founded over 15 years ago to bring simplicity to people
who wanted to use the internet and were held back by complex
software and technology," said Avishai
Abrahami, Wix Co-founder and CEO. "Over the past decade,
complexity has increased with more and more layers of software and
business functionalities, and we have continued to provide our
users with cutting edge technologies that simplified these
challenges while dramatically growing our addressable market."
Abrahami continued, "With today's emerging generative AI
technologies, we have a tremendous opportunity to reduce even more
friction, further increasing the value of our platform and the size
of our market. Our first version of AI website creation, Wix ADI,
was launched seven years ago, and we have since been trailblazing
with new AI technologies that have greatly benefited our users'
experience. I personally manage our world class AI group, and for
years we have been collaborating with teams across the globe,
including OpenAI, Google X and IBM. "
"Furthermore, we have integrated AI into our internal workflows,
significantly improving our development efficiency, delivery of
services and creative processes. Given our many years of domain
expertise in both building our own AI tools and integrating
leading, third-party tools, we are at a significant industry
advantage. I believe AI will continue to make our business bigger,
better and stronger. As for anyone who bundles Wix with companies
that will be negatively impacted by AI, I believe they will be
wrong."
Lior Shemesh, CFO at Wix, added,
"We exceeded expectations on many fronts this quarter as we
executed on our strategic priorities and intensified our commitment
to driving operational efficiency across our business. Q1 revenue
grew 10% y/y, comfortably above our guidance range, underpinned by
strong fundamentals, robust Business Solutions adoption, increased
transaction revenue, and strength in our Partners business. In
addition, further savings actions increased non-GAAP gross margin
to 67% with non-GAAP Creative Subscriptions gross margin increasing
to 80% this quarter – both targets we had anticipated achieving
later in the year. Combined with a more nimble marketing strategy
and overall improvements across our organizational cost structure,
we finished Q1 with a higher than expected FCF margin of 12%.
Encouraged by these strong results, we are raising our expectations
for revenue growth and FCF for the year and remain more confident
than ever in achieving the 'Rule of 40' in 2025."
Q1 2023 Financial Results
- Total revenue in the first quarter of 2023 was $374.1 million, up 10% y/y
-
- Total revenue on a y/y constant currency basis was $376.4 million, up 10% y/y
- Creative Subscriptions revenue in the first quarter of 2023 was
$278.1 million, up 9% y/y
-
- Creative Subscriptions ARR increased to $1.13 billion as of the end of the quarter, up 9%
y/y
- Business Solutions revenue in the first quarter of 2023 was
$95.9 million, up 11% y/y
-
- Transaction revenue2 was $42.3 million, up 16% y/y
- Partners revenue3 in the first quarter of 2023 was
$103.9 million, up 27% y/y
- Total bookings in the first quarter of 2023 were $414.9 million, up 6% y/y
-
- Total bookings on a y/y constant currency basis were
$422.7 million, up 7% y/y
- Creative Subscriptions bookings in the first quarter of 2023
were $313.4 million, up 5% y/y
- Business Solutions bookings in the first quarter of 2023 were
$101.5 million, up 9% y/y
- Total gross margin on a GAAP basis in the first quarter of 2023
was 65%
-
- Creative Subscriptions gross margin on a GAAP basis was
79%
- Business Solutions gross margin on a GAAP basis was 25%
- Total non-GAAP gross margin in the first quarter of 2023 was
67%
-
- Creative Subscriptions gross margin on a non-GAAP basis was
80%
- Business Solutions gross margin on a non-GAAP basis was
27%
- GAAP net loss in the first quarter of 2023 was $(10.4) million, or $(0.18) per share
-
- GAAP net loss includes $25.3
million of one-time restructuring and impairment
charges
- Non-GAAP net income in the first quarter of 2023 was
$51.1 million, or $0.91 per share
- Net cash provided by operating activities for the first quarter
of 2023 was $46.0 million, while
capital expenditures totaled $20.9
million, leading to free cash flow of $25.0 million
- Excluding one-time cash restructuring charges and the capital
expenditures and other expenses associated with the build out
of our new corporate headquarters, free cash flow for the first
quarter of 2023 would have been $44.0
million, or 12% of revenue
- We continued to repurchase shares this quarter. In total, we
have repurchased approximately $250
million of ordinary shares under our $300 million share repurchase program authorized
by the board in September 2022.
- Total employee headcount as of March 31,
2023 was 5,006, down 18% y/y, which includes the impact of
the headcount reduction announced in February
|
|
|
|
|
1
|
Free cash flow
excluding one-time cash restructuring charges and expenses
associated with the buildout of our new corporate
headquarters
|
2
|
Transaction revenue is
a portion of Business Solutions revenue, and we define transaction
revenue as all revenue generated through transaction facilitation,
primarily from Wix Payments as well as Wix POS, shipping solutions
and multi-channel commerce and gift card solutions
|
3
|
Partners revenue is
defined as revenue generated through agencies and freelancers that
build sites or applications for other users as well as revenue
generated through B2B partnerships, such as LegalZoom or
Vistaprint, and through enterprise partners. We identify agencies
and freelancers building sites or applications for others using
multiple criteria including but not limited to the number of sites
built, participation in the Wix Partner Program and/or the Wix
Marketplace or Wix products used. Partners revenue includes revenue
from both the Creative Subscriptions and Business Solutions
businesses
|
Financial Outlook
Our outstanding Q1 results, which exceeded our expectations,
demonstrates the success of our business model in a challenging
macro environment and gives us confidence in the ability to achieve
our profitability goals for the year ahead of our original plan. We
also remain committed to achieving the "Rule of 40" in 2025, with
expectations of significant cash flow margin expansion.
While we are seeing signs of a modest recovery in the
macroeconomic conditions, we remain cautious going forward and
continue to focus on ways to drive efficiencies in our
business.
We expect Q2 revenue to be $380 -
$385 million, or 10 - 12% growth
y/y.
Due to our outperformance in Q1, we are increasing our full year
outlook to $1,522 - $1,543 million or 10-11% y/y growth, an increase
from our previous outlook of $1,510 -
$1,535 million or 9 - 11% y/y
growth.
Our efforts in improving gross margins and operating
efficiencies across the organization have resulted in an inflection
in profitability, which we believe we can continue to improve and
sustain throughout 2023 and beyond. As a result, we are increasing
our profitability expectations for the year.
We now anticipate non-GAAP gross margin of ~67% for the full
year, up from our previous expectation of ~66% for the full year,
driven by improvement in the profitability of our Creative
Subscriptions business. We now anticipate Creative Subscriptions
non-GAAP gross margin of ~81% for the full year, up from our
previous expectation of ~80%. We continue to expect Business
Solutions non-GAAP gross margin of ~27% in 2023.
Non-GAAP operating expenses are expected to decrease to 58-59%
of revenue for the full year, down from our previous expectation of
59-60% of revenue. This decrease is primarily driven by lower sales
and marketing expenses than previously anticipated, as well as
incremental operational efficiencies across the business. Non-GAAP
sales and marketing expenses are now expected to be approximately
27% of revenue in 2023, down from our previous expectation of
27-28% of revenue.
We are increasing our outlook for free cash flow, excluding HQ
costs, for the year to $172 -
$180 million, or 11 - 12% of revenue,
and we expect to exit 2023 with a free cash flow margin of more
than 13%. This compares to our previous free cash flow outlook of
$152 - $162
million, or 10 - 11% of revenue and an exit rate of
12-13%.
Note that this revised outlook excludes approximately
$4.5 million in cash restructuring
costs, of which approximately $2.1
million was incurred in Q1 with the remainder expected to be
incurred in Q2. Approximately half of this increase in
expected free cash flow for the full year is anticipated to be
driven by higher cost of revenue savings with the other half
expected to be attributable to greater operating expense savings
than previously anticipated.
Finally, stock-based compensation is expected to decrease to
14-15% of revenue in 2023, previously anticipated to be 15%, as
headcount across the organization declines more meaningfully than
previously anticipated. We expect stock-based compensation as a
percentage of revenue to continue to decline y/y through 2025.
Conference Call and Webcast Information
Wix will host a conference call to discuss the results at
8:30 a.m. ET on Wednesday, May 17,
2023. To participate on the live call, analysts and investors
should register and join at
https://register.vevent.com/register/BIee93381d029e49b3901f4e54ea74b404.
A replay of the call will be available through May 16, 2024 via the registration link.
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 a leading platform to create, manage and grow a digital
presence. What began as a website builder in 2006 is now a complete
platform providing users with enterprise-grade performance,
security and a reliable infrastructure. Offering a wide range of
commerce and business solutions, advanced SEO and marketing tools,
Wix enables users to take full ownership of their brand, their data
and their relationships with their customers. With a focus on
continuous innovation and delivery of new features and products,
anyone can build a powerful digital presence to fulfill their
dreams on Wix.
For more about Wix, please visit our Press Room
Investor Relations:
ir@wix.com
Media Relations:
pr@wix.com
Non-GAAP Financial Measures and Key Operating Metrics
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: bookings, cumulative cohort
bookings, bookings on a constant currency basis, revenue on a
constant currency basis, non-GAAP gross margin, non-GAAP operating
income (loss), non-GAAP operating margin, 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 financial expense, non-GAAP tax expense (collectively the
"Non-GAAP financial measures"). Measures presented on a constant
currency or foreign exchange neutral basis have been adjusted to
exclude the effect of y/y changes in foreign currency exchange rate
fluctuations. Bookings is a non-GAAP financial measure calculated
by adding the change in deferred revenues and the change in
unbilled contractual obligations for a particular period to
revenues for the same period. Bookings include cash receipts for
premium subscriptions purchased by users as well as cash we collect
from business solutions, as well as payments due to us under the
terms of contractual agreements for which we may have not yet
received payment. Cash receipts for premium subscriptions are
deferred and recognized as revenues over the terms of the
subscriptions. Cash receipts for payments and the majority of the
additional products and services (other than Google Workspace) are
recognized as revenues upon receipt. Committed payments are
recognized as revenue as we fulfill our obligation under the terms
of the contractual agreement. 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 and other G&A expenses (income).
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 and
other G&A expenses (income), 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 one-time cash restructuring charges and the capital
expenditures and other expenses associated with the buildout of our
new corporate 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. Non-GAAP financial
expense represents financial expense calculated in accordance with
GAAP as adjusted for unrealized gains of equity investments,
amortization of debt discount and debt issuance costs and
non-operating foreign exchange expenses. Non-GAAP tax expense
represents tax expense calculated in accordance with GAAP as
adjusted for provisions for income tax effects related to non-GAAP
adjustments.
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 bookings, 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.
Wix also uses Creative Subscriptions Annualized Recurring
Revenue (ARR) as a key operating metric. Creative Subscriptions ARR
is calculated as Creative Subscriptions Monthly Recurring Revenue
(MRR) multiplied by 12. Creative Subscriptions MRR is calculated as
the total of (i) all Creative Subscriptions in effect on the last
day of the period, multiplied by the monthly revenue of such
Creative Subscriptions, other than domain registrations; (ii) the
average revenue per month from domain registrations in effect on
the last day of the period; and (iii) monthly revenue from other
partnership agreements and enterprise partners.
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,
bookings 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 quarterly and annual
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 expectation that we will be able to
attract and retain registered users and generate new premium
subscriptions, in particular as we continuously adjust our
marketing strategy and as the macro-economic environment continues
to be turbulent; our expectation that we will be able to increase
the average revenue we derive per premium subscription, including
through our partners; our expectations related to our ability to
develop relevant and required products using Artificial
Intelligence ("AI"), the regulatory environment impacting AI
related activities including privacy and intellectual property
aspects, and potential competition from third-party AI tools which
may impact our business; our expectation that new products and
developments, as well as third-party products we will offer in the
future within our platform, will receive customer acceptance and
satisfaction, including the growth in market adoption of our online
commerce solutions; our assumption that historical user behavior
can be extrapolated to predict future user behavior, in particular
during the current turbulent macro-economic environment; our
expectation regarding the successful impact of our previously
announced Cost-Efficiency Plan and other cost saving measures we
may take in the future; our prediction of the future revenues
generated by our user cohorts and our ability to maintain and
increase such revenue growth, as well as our ability to generate
and maintain elevated levels of free cash flow and profitability;
our expectation to maintain and enhance our brand and reputation;
our expectation that we will effectively execute our initiatives to
improve our user support function through our Customer Care team,
and that our recent downsizing of our Customer Care team will not
affect our ability to continue attracting registered users and
increase user retention, user engagement and sales; our plans to
successfully localize our products, including by making our
product, support and communication channels available in additional
languages and to expand our payment infrastructure to transact in
additional local currencies and accept additional payment methods;
our expectation regarding the impact of fluctuations in foreign
currency exchange rates, interest rates, potential illiquidity of
banking systems, and other recessionary trends on our business; our
expectations relating to the repurchase of our ordinary shares
and/or Convertible Notes pursuant to our repurchase program; our
expectation that we will effectively manage our infrastructure; our
expectations regarding the outcome of any regulatory investigation
or litigation, including class actions; our expectations regarding
future changes in our cost of revenues and our operating expenses
on an absolute basis and as a percentage of our revenues, as well
as our ability to achieve profitability; our expectations regarding
changes in the global, national, regional or local economic,
business, competitive, market, and regulatory landscape, including
as a result of COVID-19 and as a result of the military invasion of
Ukraine by Russia; our planned level of capital
expenditures and our belief that our existing cash and cash from
operations will be sufficient to fund our operations for at least
the next 12 months and for the foreseeable future; our expectations
with respect to the integration and performance of acquisitions;
our ability to attract and retain qualified employees and key
personnel; and our expectations about entering into new markets and
attracting new customer demographics, including our ability to
successfully attract new partners large enterprise-level users and
to grow our activities with these customer types as anticipated and
other factors discussed under the heading "Risk Factors" in the
Company's annual report on Form 20-F for the year ended
December 31, 2022 filed with the
Securities and Exchange Commission on March
30, 2023. The preceding list is not intended to be an
exhaustive list of all of our forward-looking statements. 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.
Wix.com Ltd.
|
CONSOLIDATED STATEMENTS
OF OPERATIONS - GAAP
|
(In thousands, except
loss per share data)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Revenues
|
|
|
|
Creative
Subscriptions
|
$
278,130
|
|
$
254,968
|
Business
Solutions
|
95,946
|
|
86,629
|
|
374,076
|
|
341,597
|
|
|
|
|
Cost of
Revenues
|
|
|
|
Creative
Subscriptions
|
57,484
|
|
64,873
|
Business
Solutions
|
71,994
|
|
69,876
|
|
129,478
|
|
134,749
|
|
|
|
|
Gross Profit
|
244,598
|
|
206,848
|
|
|
|
|
Operating
expenses:
|
|
|
|
Research and
development
|
114,943
|
|
119,865
|
Selling and
marketing
|
99,133
|
|
156,714
|
General and
administrative
|
38,517
|
|
45,686
|
Impairment,
restructuring and other costs
|
25,338
|
|
-
|
Total operating
expenses
|
277,931
|
|
322,265
|
Operating
loss
|
(33,333)
|
|
(115,417)
|
Financial income
(expenses), net
|
21,377
|
|
(144,473)
|
Other income
|
57
|
|
46
|
Loss before taxes on
income
|
(11,899)
|
|
(259,844)
|
Income tax
benefit
|
(1,530)
|
|
(32,555)
|
Net loss
|
$
(10,369)
|
|
$
(227,289)
|
|
|
|
|
Basic and diluted net
loss per share
|
$
(0.18)
|
|
-3.954266862
|
Basic and diluted
weighted-average shares used to compute net loss per
share
|
56,408,677
|
|
57,479,429
|
Wix.com Ltd.
|
|
|
CONDENSED CONSOLIDATED
BALANCE SHEETS
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
Period ended
|
|
March 31,
|
|
December 31,
|
|
2023
|
|
2022
|
Assets
|
(unaudited)
|
|
(audited)
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
350,913
|
|
$
244,686
|
Short-term
deposits
|
536,386
|
|
526,328
|
Restricted
deposits
|
6,525
|
|
13,669
|
Marketable
securities
|
273,676
|
|
292,449
|
Trade
receivables
|
52,560
|
|
42,086
|
Prepaid expenses and
other current assets
|
41,327
|
|
28,519
|
Total current
assets
|
1,261,387
|
|
1,147,737
|
|
|
|
|
Long-Term
Assets:
|
|
|
|
Prepaid expenses and
other long-term assets
|
36,945
|
|
23,027
|
Property and equipment,
net
|
112,516
|
|
108,738
|
Marketable
securities
|
140,379
|
|
194,964
|
Intangible assets and
goodwill, net
|
81,805
|
|
83,293
|
Operating lease
right-of-use assets
|
169,499
|
|
200,608
|
Total long-term
assets
|
541,144
|
|
610,630
|
|
|
|
|
Total
assets
|
$ 1,802,531
|
|
$
1,758,367
|
|
|
|
|
Liabilities and
Shareholders' Deficiency
|
|
|
|
Current
Liabilities:
|
|
|
|
Trade
payables
|
$
49,437
|
|
$
96,071
|
Employees and payroll
accruals
|
76,071
|
|
86,113
|
Deferred
revenues
|
577,835
|
|
529,205
|
Current portion of
convertible notes, net
|
362,144
|
|
361,621
|
Accrued expenses and
other current liabilities
|
97,034
|
|
88,194
|
Operating lease
liabilities
|
48,155
|
|
29,268
|
Total current
liabilities
|
1,210,676
|
|
1,190,472
|
Long Term
Liabilities:
|
|
|
|
Long-term deferred
revenues
|
82,939
|
|
70,594
|
Long-term deferred tax
liability
|
10,760
|
|
14,902
|
Convertible notes,
net
|
567,351
|
|
566,566
|
Other long-term
liabilities
|
6,623
|
|
6,093
|
Long-term operating
lease liabilities
|
141,115
|
|
172,982
|
Total long-term
liabilities
|
808,788
|
|
831,137
|
|
|
|
|
Total
liabilities
|
2,019,464
|
|
2,021,609
|
|
|
|
|
Shareholders'
Deficiency
|
|
|
|
Ordinary
shares
|
109
|
|
108
|
Additional paid-in
capital
|
1,349,473
|
|
1,274,968
|
Treasury
Stock
|
(450,180)
|
|
(431,862)
|
Accumulated other
comprehensive loss
|
(32,965)
|
|
(33,455)
|
Accumulated
deficit
|
(1,083,370)
|
|
(1,073,001)
|
Total shareholders'
deficiency
|
(216,933)
|
|
(263,242)
|
|
|
|
|
Total liabilities and
shareholders' deficiency
|
$ 1,802,531
|
|
$
1,758,367
|
Wix.com Ltd.
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
OPERATING
ACTIVITIES:
|
|
|
|
Net
loss
|
$
(10,369)
|
|
$
(227,289)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation
|
4,922
|
|
3,535
|
Amortization
|
1,488
|
|
1,574
|
Share based
compensation expenses
|
54,521
|
|
60,984
|
Amortization of debt
discount and debt issuance costs
|
1,308
|
|
1,301
|
Changes in accrued
interest and exchange rate on short term and long term
deposits
|
(25)
|
|
45
|
Non-cash impairment,
restructuring and other costs
|
20,834
|
|
-
|
Amortization of premium
and discount and accrued interest on marketable securities,
net
|
540
|
|
1,549
|
Remeasurement loss
(gain) on Marketable equity
|
(13,898)
|
|
151,645
|
Deferred income taxes,
net
|
(4,144)
|
|
(35,575)
|
Changes in operating
lease right-of-use assets
|
5,796
|
|
8,838
|
Changes in operating
lease liabilities
|
(8,121)
|
|
(9,647)
|
Increase in trade
receivables
|
(10,474)
|
|
(11,649)
|
Increase in prepaid
expenses and other current and long-term assets
|
(10,858)
|
|
(12,313)
|
Increase (decrease) in
trade payables
|
(41,670)
|
|
21,686
|
Decrease in employees
and payroll accruals
|
(10,042)
|
|
(4,740)
|
Increase in short term
and long term deferred revenues
|
60,975
|
|
37,552
|
Increase (decrease) in
accrued expenses and other current liabilities
|
5,178
|
|
(1,158)
|
Net cash provided by
(used in) operating activities
|
45,961
|
|
(13,662)
|
INVESTING
ACTIVITIES:
|
|
|
|
Proceeds from
short-term deposits and restricted deposits
|
56,091
|
|
105,000
|
Investment in
short-term deposits and restricted deposits
|
(58,980)
|
|
(150,000)
|
Investment in
marketable securities
|
-
|
|
(72,155)
|
Proceeds from
marketable securities
|
58,390
|
|
61,380
|
Purchase of property
and equipment and lease prepayment
|
(19,574)
|
|
(19,283)
|
Capitalization of
internal use of software
|
(1,358)
|
|
(641)
|
Proceeds from sale of
equity securities
|
31,861
|
|
3,193
|
Purchases of
investments in privately held companies
|
(7,500)
|
|
(160)
|
Net cash provided by
(used in) investing activities
|
58,930
|
|
(72,666)
|
FINANCING
ACTIVITIES:
|
|
|
|
Proceeds from exercise
of options and ESPP shares
|
19,655
|
|
21,582
|
Purchase of treasury
stock
|
(18,319)
|
|
-
|
Net cash provided by
financing activities
|
1,336
|
|
21,582
|
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
|
106,227
|
|
(64,746)
|
CASH AND CASH
EQUIVALENTS—Beginning of period
|
244,686
|
|
451,355
|
CASH AND CASH
EQUIVALENTS—End of period
|
$
350,913
|
|
$ 386,609
|
Wix.com Ltd.
|
KEY PERFORMANCE
METRICS
|
(In
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Creative
Subscriptions
|
278,130
|
|
254,968
|
Business
Solutions
|
95,946
|
|
86,629
|
Total
Revenues
|
$
374,076
|
|
$
341,597
|
|
|
|
|
Creative
Subscriptions
|
313,429
|
|
299,787
|
Business
Solutions
|
101,476
|
|
93,461
|
Total
Bookings
|
$
414,905
|
|
$
393,248
|
|
|
|
|
Free Cash
Flow
|
$
25,029
|
|
$
(33,586)
|
Free Cash Flow
excluding HQ build out, impairment and restructuring
costs
|
$
44,029
|
|
$
(18,148)
|
Creative Subscriptions
ARR
|
$
1,134,662
|
|
$
1,037,713
|
Wix.com Ltd.
|
RECONCILIATION OF
REVENUES TO BOOKINGS
|
(In
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Revenues
|
$
374,076
|
|
$
341,597
|
Change in deferred
revenues
|
60,975
|
|
37,552
|
Change in unbilled
contractual obligations
|
(20,146)
|
|
14,099
|
Bookings
|
$
414,905
|
|
$
393,248
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Creative Subscriptions
Revenues
|
$
278,130
|
|
$
254,968
|
Change in deferred
revenues
|
55,445
|
|
30,720
|
Change in unbilled
contractual obligations
|
(20,146)
|
|
14,099
|
Creative Subscriptions
Bookings
|
$
313,429
|
|
$
299,787
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Business Solutions
Revenues
|
$
95,946
|
|
$
86,629
|
Change in deferred
revenues
|
5,530
|
|
6,832
|
Business Solutions
Bookings
|
$
101,476
|
|
$
93,461
|
Wix.com Ltd.
|
RECONCILIATION OF
COHORT BOOKINGS
|
(In
millions)
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
|
|
|
Q1 Cohort
revenues
|
$
8
|
|
$
7
|
Q1 Change in deferred
revenues
|
22
|
|
21
|
Q1 Cohort
Bookings
|
$
30
|
|
$
28
|
Wix.com Ltd.
|
RECONCILIATION OF
REVENUES AND BOOKINGS EXCLUDING FX IMPACT
|
(In
thousands)
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Revenues
|
$
374,076
|
|
$
341,597
|
FX impact on
Q1/23 using Y/Y rates
|
2,343
|
|
-
|
Revenues excluding FX
impact
|
$
376,419
|
|
$
341,597
|
|
|
|
|
Y/Y growth
|
10 %
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Bookings
|
$
414,905
|
|
$
393,248
|
FX impact on
Q1/23 using Y/Y rates
|
7,828
|
|
-
|
Bookings excluding FX
impact
|
$
422,733
|
|
$
393,248
|
|
|
|
|
Y/Y growth
|
7 %
|
|
|
Wix.com Ltd.
|
TOTAL ADJUSTMENTS GAAP
TO NON-GAAP
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
(1) Share based
compensation expenses:
|
(unaudited)
|
Cost of
revenues
|
$
4,238
|
|
$
4,231
|
Research and
development
|
28,294
|
|
28,720
|
Selling and
marketing
|
9,558
|
|
9,875
|
General and
administrative
|
12,431
|
|
18,158
|
Total share based
compensation expenses
|
54,521
|
|
60,984
|
(2)
Amortization
|
1,488
|
|
1,574
|
(3) Acquisition related
expenses
|
196
|
|
1,699
|
(4) Amortization of
debt discount and debt issuance costs
|
1,308
|
|
1,301
|
(5) Impairment,
restructuring and other costs
|
25,338
|
|
-
|
(6) Sales tax accrual
and other G&A expenses (income)
|
308
|
|
172
|
(7) Unrealized loss
(gain) on equity and other investments
|
(13,898)
|
|
151,645
|
(8) Non-operating
foreign exchange expenses (income)
|
(3,662)
|
|
4,132
|
(9) Provision for
income tax effects related to non-GAAP adjustments
|
(4,131)
|
|
(35,612)
|
Total adjustments of
GAAP to Non GAAP
|
$
61,468
|
|
$
185,895
|
Wix.com Ltd.
|
RECONCILIATION OF GAAP
TO NON-GAAP GROSS PROFIT
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Gross Profit
|
$
244,598
|
|
$
206,848
|
Share based
compensation expenses
|
4,238
|
|
4,231
|
Acquisition related
expenses
|
24
|
|
81
|
Amortization
|
667
|
|
761
|
Non GAAP Gross
Profit
|
249,527
|
|
211,921
|
|
|
|
|
Non GAAP Gross
margin
|
67 %
|
|
62 %
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Gross Profit - Creative
Subscriptions
|
$
220,646
|
|
$
190,095
|
Share based
compensation expenses
|
3,151
|
|
3,385
|
Non GAAP Gross Profit -
Creative Subscriptions
|
223,797
|
|
193,480
|
|
|
|
|
Non GAAP Gross margin -
Creative Subscriptions
|
80 %
|
|
76 %
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Gross Profit - Business
Solutions
|
$
23,952
|
|
$
16,753
|
Share based
compensation expenses
|
1,087
|
|
846
|
Acquisition related
expenses
|
24
|
|
81
|
Amortization
|
667
|
|
761
|
Non GAAP Gross Profit -
Business Solutions
|
25,730
|
|
18,441
|
|
|
|
|
Non GAAP Gross margin -
Business Solutions
|
27 %
|
|
21 %
|
Wix.com Ltd.
|
RECONCILIATION OF
OPERATING LOSS TO NON-GAAP OPERATING INCOME (LOSS)
|
(In
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Operating
loss
|
$
(33,333)
|
|
$ (115,417)
|
Adjustments:
|
|
|
|
Share based
compensation expenses
|
54,521
|
|
60,984
|
Amortization
|
1,488
|
|
1,574
|
Impairment,
restructuring and other charges
|
25,338
|
|
-
|
Sales tax accrual and
other G&A expenses
|
308
|
|
172
|
Acquisition related
expenses
|
196
|
|
1,699
|
Total
adjustments
|
$
81,851
|
|
$
64,429
|
|
|
|
|
Non GAAP operating
income (loss)
|
$
48,518
|
|
$
(50,988)
|
|
|
|
|
Non GAAP operating
margin
|
13 %
|
|
-15 %
|
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
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Net loss
|
$
(10,369)
|
|
$ (227,289)
|
Share based
compensation expenses and other Non GAAP adjustments
|
61,468
|
|
185,895
|
Non-GAAP net income
(loss)
|
$
51,099
|
|
$
(41,394)
|
|
|
|
|
Basic and diluted
Non GAAP net income (loss) per share
|
$
0.91
|
|
$
(0.72)
|
Weighted average shares
used in computing basic and diluted Non GAAP net income (loss) per
share
|
56,408,677
|
|
57,479,429
|
Wix.com Ltd.
|
RECONCILIATION OF NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH
FLOW
|
(In
thousands)
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Net cash provided by
(used in) operating activities
|
$
45,961
|
|
$
(13,662)
|
Capital expenditures,
net
|
(20,932)
|
|
(19,924)
|
Free Cash
Flow
|
$
25,029
|
|
$
(33,586)
|
|
|
|
|
Impairment,
restructuring and other costs
|
2,051
|
|
-
|
Capex related to HQ
build out
|
16,949
|
|
15,438
|
Free Cash Flow
excluding HQ build out, impairment and restructuring
costs
|
$
44,029
|
|
$
(18,148)
|
Wix.com Ltd.
|
RECONCILIATION OF BASIC
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND THE DILUTED
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
|
|
|
Basic and diluted
weighted-average shares used to compute net loss per
share
|
56,408,677
|
|
57,479,429
|
|
|
|
|
The following items
have been excluded from the diluted weighted average number of
shares outstanding because they are anti-dilutive:
|
|
|
|
Stock
options
|
4,149,981
|
|
5,099,095
|
Restricted share
units
|
3,538,527
|
|
2,799,022
|
Convertible Notes
(if-converted)
|
3,969,514
|
|
3,969,514
|
|
68,066,699
|
|
69,347,060
|
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SOURCE Wix.com Ltd.