- Second consecutive quarter of positive GAAP net income
positions Wix to achieve GAAP profitability for full year 2023 with
GAAP profitability also expected to be achievable for full year
2024
- Total revenue in Q3 of $393.8
million, up 14% y/y, ahead of expectations and marking the
third consecutive quarter of year-over-year revenue growth
acceleration
- Incredible momentum in Partners business demonstrated by:
- Partners revenue1 of $119.4
million, up 38% y/y, as growth accelerated for another
quarter, with more Partners joining Wix and monetization continuing
to increase
- Current B2B partnerships increasingly driving growth; new
multi-year strategic partnership with Intuit further underscoring
Wix as the online presence partner of choice for global marquee
brands empowering SMBs
- Early uptake of Wix Studio, the ultimate web creation platform
for professionals, ahead of expectations with global rollout now
complete
- Strong revenue growth and continued benefits from completed
operational efficiencies resulted in better than expected free cash
flow ("FCF")2 of $62.8
million, or 16% of revenue
- Raising full year revenue and FCF guidance with full year FCF
margin now expected to be ~15% of revenue, as FCF margin is
anticipated to accelerate to 20-21% of revenue in Q4, above the
expectations of the three-year plan
NEW
YORK, Nov. 9, 2023 /PRNewswire/ -- Wix.com Ltd.
(Nasdaq: WIX), the leading SaaS website builder platform
globally,3 today reported financial results for the
third quarter of 2023. In addition, the Company provided its
outlook for the fourth quarter and raised its outlook for full year
2023. Please visit the Wix Investor Relations website at
https://investors.wix.com/ to view the Q3'23 Shareholder Update and
other materials.
"Wix's performance in the third quarter exceeded both growth and
profitability expectations for another consecutive quarter, as we
successfully executed on our strategic priorities while remaining
diligent with managing expenses," said Avishai Abrahami, Wix Co-founder and CEO. "The
strength in our Partners business is especially noteworthy with our
team firing on all cylinders and revenue growth continuing to
accelerate. We expect an extended growth period ahead for this
business as we increase our penetration of the professionals market
with higher monetization, particularly as Wix Studio continues to
gain traction. Though early, we have seen a fantastic response to
Wix Studio and excellent adoption thus far. Finally, we continue to
make tremendous progress leveraging AI to create a frictionless
experience for users with the recent launch of Conversational AI
Chat Experience for Business, the first step in completely
automating business management with AI to get businesses online
more quickly and efficiently. This is just the first milestone
launch in a string of very exciting AI product releases we have on
the horizon."
"Since the events in Israel on
October 7th, much of the team at Wix
has had to adapt to a new reality. We have harnessed our global
footprint and technological strength to support our people as well
as our broader community, both here in Israel and abroad through a number of
high-impact initiatives. The unified strength of our diverse global
team has been a bright light during these times, enabling us to
prevent disruption to operations and continue to execute on our
growth initiatives," said Nir Zohar, President & COO at
Wix.
Lior Shemesh, CFO at Wix, added,
"We carried forward our positive momentum into the back half of the
year with another quarter of results that exceeded expectations,
positioning us well to achieve positive GAAP net income in full
year 2023 with GAAP profitability achievable in 2024. This
milestone accelerates Wix's profitability ahead of our three-year
plan and is driven by robust growth as well as continued benefits
from the strong execution of our past efficiency initiatives.
Revenue in the third quarter increased 14% y/y, driven by the third
consecutive quarter of accelerating Partners revenue growth which
was 38% y/y, strong GPV growth and strong performance in our
new cohorts of users. FCF margin came in higher than expected at
16% of revenue, which we anticipate to increase to 20-21% in Q4.
This exit rate puts us in striking distance of our minimum 25% FCF
margin target anticipated for 2025. As a result of continued strong
execution, we are raising our revenue and FCF expectations for the
full year to finish above the expectations of our refreshed
three-year plan."
Q3 2023 Financial Results
- Total revenue in the third quarter of 2023 was $393.8 million, up 14% y/y
- Creative Subscriptions revenue in the third quarter of 2023 was
$290.6 million, up 11% y/y
- Creative Subscriptions ARR increased to $1.18 billion as of the end of the quarter, up
10% y/y
- Business Solutions revenue in the third quarter of 2023 was
$103.2 million, up 22% y/y
- Transaction revenue4 was $44.1 million, up 22% y/y
- Partners revenue1 in the third quarter of 2023 was
$119.4 million, up 38% y/y
- Total bookings in the third quarter of 2023 were $389.1 million, up 10% y/y
- Creative Subscriptions bookings in the third quarter of 2023
were $283.9 million, up 5% y/y
- Business Solutions bookings in the third quarter of 2023 were
$105.2 million, up 27% y/y
- Total gross margin on a GAAP basis in the third quarter of 2023
was 67%
- Creative Subscriptions gross margin on a GAAP basis was
82%
- Business Solutions gross margin on a GAAP basis was 27%
- Total non-GAAP gross margin in the third quarter of 2023 was
68%
- Creative Subscriptions gross margin on a non-GAAP basis was
83%
- Business Solutions gross margin on a non-GAAP basis was
28%
- GAAP net income in the third quarter of 2023 was $7.0 million, or $0.12 per basic and diluted share
- Non-GAAP net income in the third quarter of 2023 was
$65.1 million, or $1.14 per basic share or $1.10 per diluted share
- Net cash provided by operating activities for the third quarter
of 2023 was $64.1 million, while
capital expenditures totaled $19.4
million, leading to free cash flow of $44.8 million
- Excluding the capex investment associated with our new
headquarters office build out, free cash flow for the third quarter
of 2023 would have been $62.8
million, or 16% of revenue
____________________
|
1
|
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 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 (incl. Wix Studio). Partners
revenue includes revenue from both the Creative Subscriptions and
Business Solutions businesses.
|
2
|
Free cash flow
excluding one-time cash restructuring charges, if applicable, and
expenses associated with the buildout of our new corporate
headquarters.
|
3
|
Based on number of
active live sites as reported by competitors' figures, independent
third-party-data and internal data as of Q2 2023.
|
4
|
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.
|
Financial Outlook
Our exceptional outperformance in the first three quarters of
the year highlights the strong fundamentals of our business and the
continued momentum of our growth and profitability initiatives.
As a result, we expect to finish 2023 ahead of our refreshed
three-year plan presented at the Analyst & Investor Day in
August while accelerating our path to achieving the Rule of 40 in
2025.
We expect Q4 revenue to be $400
- $405 million, or 13 - 14% growth
y/y.
Due to the outperformance we experienced in the first three
quarters of 2023, we are increasing our full year revenue outlook
to $1,558 - $1,563 million, or 12 - 13% y/y growth, an
increase from our previous outlook of $1,543 - $1,558
million, or 11 - 12% y/y growth.
This increased revenue growth outlook is expected to result in
accelerating profitability as we exit 2023.
We continue to anticipate non-GAAP gross margin of approximately
68% for the full year, driven by strong performance across both
Creative Subscriptions and Business Solutions. We also continue to
anticipate Creative Subscriptions non-GAAP gross margin of
approximately 82% for the full year and Business Solutions non-GAAP
gross margin of approximately 28% for the full year.
Non-GAAP operating expenses are expected to decrease to 53-54%
of revenue for the full year, down from our previous expectation of
56-57% of revenue. This decrease is primarily driven by greater
efficiency on sales and marketing expenses than we had anticipated
as well as other incremental operational efficiencies. Non-GAAP
sales and marketing expenses are now expected to be approximately
23-24% of revenue in 2023, down from our previous expectation of
approximately 25-26% of revenue.
Impressively, following a second consecutive quarter of positive
GAAP net income in Q3, we now expect to deliver positive GAAP net
income for the full year 2023 with profitability also achievable
for full year 2024, a goal previously set for 2025 per our
three-year plan.
Due to stronger than expected revenue growth and continued
benefits from completed operational efficiencies, we are increasing
our outlook for free cash flow, excluding HQ and cash restructuring
costs, for the full year to $235 -
$240 million, or approximately 15% of
revenue, and we expect to exit 2023 with a free cash flow margin of
20-21% in Q4, putting us in striking distance of our minimum 25%
FCF margin anticipated for 2025. This compares to our
previous free cash flow outlook of $200 - $210
million, or approximately 13% of revenue and an exit rate of
approximately 15%.
Note that our revised FCF outlook excludes approximately
$4.5 million in cash restructuring
costs, of which approximately $2.1
million was incurred in Q1, with the remainder being
incurred in Q2.
Finally, we continue to expect stock-based compensation to be
14% of revenue in full year 2023, as we manage headcount according
to our annual plan. 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 Thursday, November 9,
2023. To participate on the live call, analysts and
investors should register and join at
https://register.vevent.com/register/BI682d39f0556247bd9e332dafd387b487.
A replay of the call will be available through November 8, 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 the leading SaaS website builder platform
globally3 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, free cash flow per
share, 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. Free cash flow per share represents
free cash flow, as adjusted, divided by total outstanding shares on
a fully diluted basis. 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
and/or bookings 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 and maintain
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, or other local Israeli military
campaigns; 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
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Revenues
|
|
|
|
|
|
|
|
Creative
Subscriptions
|
$
290,634
|
|
$
261,066
|
|
$
855,853
|
|
$
774,211
|
Business
Solutions
|
103,207
|
|
84,739
|
|
302,041
|
|
258,415
|
|
393,841
|
|
345,805
|
|
1,157,894
|
|
1,032,626
|
|
|
|
|
|
|
|
|
Cost of
Revenues
|
|
|
|
|
|
|
|
Creative
Subscriptions
|
53,187
|
|
62,035
|
|
162,721
|
|
193,160
|
Business
Solutions
|
75,856
|
|
65,822
|
|
223,694
|
|
204,303
|
|
129,043
|
|
127,857
|
|
386,415
|
|
397,463
|
|
|
|
|
|
|
|
|
Gross Profit
|
264,798
|
|
217,948
|
|
771,479
|
|
635,163
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
125,117
|
|
120,384
|
|
355,550
|
|
361,867
|
Selling and
marketing
|
100,765
|
|
117,448
|
|
295,935
|
|
394,942
|
General and
administrative
|
40,865
|
|
42,427
|
|
116,632
|
|
131,104
|
Impairment,
restructuring and other costs
|
3,843
|
|
-
|
|
29,511
|
|
-
|
Total operating
expenses
|
270,590
|
|
280,259
|
|
797,628
|
|
887,913
|
Operating
loss
|
(5,792)
|
|
(62,311)
|
|
(26,149)
|
|
(252,750)
|
Financial income
(expenses), net
|
14,583
|
|
21,142
|
|
56,013
|
|
(170,257)
|
Other income
(expenses)
|
(474)
|
|
131
|
|
(299)
|
|
235
|
Income (loss) before
taxes on income
|
8,317
|
|
(41,038)
|
|
29,565
|
|
(422,772)
|
Income tax expenses
(benefit)
|
1,342
|
|
6,323
|
|
(618)
|
|
(36,884)
|
Net income
(loss)
|
$
6,975
|
|
$
(47,361)
|
|
$
30,183
|
|
$ (385,888)
|
|
|
|
|
|
|
|
|
Basic net income (loss)
per share
|
$
0.12
|
|
$
(0.81)
|
|
$
0.53
|
|
$
(6.66)
|
Basic weighted-average
shares used to compute net income (loss) per share
|
56,837,917
|
|
58,355,542
|
|
56,666,881
|
|
57,930,336
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share
|
$
0.12
|
|
$
(0.81)
|
|
$
0.52
|
|
$
(6.66)
|
Diluted
weighted-average shares used to compute net income (loss) per
share
|
58,497,072
|
|
58,355,542
|
|
58,289,105
|
|
57,930,336
|
Wix.com Ltd.
|
|
|
|
CONDENSED CONSOLIDATED
BALANCE SHEETS
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
Period ended
|
|
September
30,
|
|
December 31,
|
|
2023
|
|
2022
|
Assets
|
(unaudited)
|
|
(audited)
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
504,793
|
|
$
244,686
|
Short-term
deposits
|
243,384
|
|
526,328
|
Restricted
deposits
|
2,893
|
|
13,669
|
Marketable
securities
|
168,991
|
|
292,449
|
Trade
receivables
|
54,600
|
|
42,086
|
Prepaid expenses and
other current assets
|
40,452
|
|
28,519
|
Total current
assets
|
1,015,113
|
|
1,147,737
|
|
|
|
|
Long-Term
Assets:
|
|
|
|
Prepaid expenses and
other long-term assets
|
22,669
|
|
23,027
|
Property and equipment,
net
|
136,942
|
|
108,738
|
Marketable
securities
|
78,054
|
|
194,964
|
Intangible assets and
goodwill, net
|
78,827
|
|
83,293
|
Operating lease
right-of-use assets
|
413,064
|
|
200,608
|
Total long-term
assets
|
729,556
|
|
610,630
|
|
|
|
|
Total
assets
|
$ 1,744,669
|
|
$
1,758,367
|
|
|
|
|
Liabilities and
Shareholders' Deficiency
|
|
|
|
Current
Liabilities:
|
|
|
|
Trade
payables
|
$
23,184
|
|
$
96,071
|
Employees and payroll
accruals
|
64,888
|
|
86,113
|
Deferred
revenues
|
587,514
|
|
529,205
|
Current portion of
convertible notes, net
|
-
|
|
361,621
|
Accrued expenses and
other current liabilities
|
97,624
|
|
88,194
|
Operating lease
liabilities
|
20,788
|
|
29,268
|
Total current
liabilities
|
793,998
|
|
1,190,472
|
Long Term
Liabilities:
|
|
|
|
Long-term deferred
revenues
|
85,690
|
|
70,594
|
Long-term deferred tax
liability
|
8,155
|
|
14,902
|
Convertible notes,
net
|
568,925
|
|
566,566
|
Other long-term
liabilities
|
8,202
|
|
6,093
|
Long-term operating
lease liabilities
|
374,440
|
|
172,982
|
Total long-term
liabilities
|
1,045,412
|
|
831,137
|
|
|
|
|
Total
liabilities
|
1,839,410
|
|
2,021,609
|
|
|
|
|
Shareholders'
Deficiency
|
|
|
|
Ordinary
shares
|
106
|
|
108
|
Additional paid-in
capital
|
1,480,849
|
|
1,274,968
|
Treasury
Stock
|
(500,174)
|
|
(431,862)
|
Accumulated other
comprehensive loss
|
(32,704)
|
|
(33,455)
|
Accumulated
deficit
|
(1,042,818)
|
|
(1,073,001)
|
Total shareholders'
deficiency
|
(94,741)
|
|
(263,242)
|
|
|
|
|
Total liabilities and
shareholders' deficiency
|
$ 1,744,669
|
|
$
1,758,367
|
Wix.com Ltd.
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
6,975
|
|
$
(47,361)
|
|
$
30,183
|
|
$ (385,888)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation
|
4,348
|
|
3,845
|
|
13,767
|
|
11,402
|
Amortization
|
1,489
|
|
1,581
|
|
4,466
|
|
4,735
|
Share based
compensation expenses
|
58,249
|
|
56,796
|
|
166,430
|
|
176,919
|
Amortization of debt
discount and debt issuance costs
|
787
|
|
1,305
|
|
3,405
|
|
3,908
|
Changes in accrued
interest and exchange rate on short term and long term
deposits
|
(1,937)
|
|
172
|
|
(1,829)
|
|
7
|
Non-cash impairment,
restructuring and other costs
|
1,968
|
|
-
|
|
23,132
|
|
-
|
Amortization of premium
and discount and accrued interest on marketable securities,
net
|
(563)
|
|
1,000
|
|
4,109
|
|
3,805
|
Remeasurement loss
(gain) on Marketable equity
|
2,400
|
|
(10,182)
|
|
(20,312)
|
|
196,383
|
Changes in deferred
income taxes, net
|
3,713
|
|
2,351
|
|
(6,749)
|
|
(45,868)
|
Changes in operating
lease right-of-use assets
|
8,905
|
|
8,141
|
|
20,057
|
|
26,716
|
Changes in operating
lease liabilities
|
(13,705)
|
|
(8,675)
|
|
(48,034)
|
|
(33,847)
|
Decrease (increase) in
trade receivables
|
(1,332)
|
|
5,004
|
|
(12,514)
|
|
(5,429)
|
Increase in prepaid
expenses and other current and long-term assets
|
(6,402)
|
|
(5,280)
|
|
(9,260)
|
|
(32,625)
|
Increase (decrease) in
trade payables
|
(14,604)
|
|
(7,960)
|
|
(67,575)
|
|
4,153
|
Increase (decrease) in
employees and payroll accruals
|
6,749
|
|
(9,562)
|
|
(21,225)
|
|
(14,644)
|
Increase in short term
and long term deferred revenues
|
387
|
|
6,023
|
|
73,405
|
|
51,306
|
Increase in accrued
expenses and other current liabilities
|
6,717
|
|
3,069
|
|
6,410
|
|
22,885
|
Net cash provided by
(used in) operating activities
|
64,144
|
|
267
|
|
157,866
|
|
(16,082)
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from
short-term deposits and restricted deposits
|
70,040
|
|
105,171
|
|
493,741
|
|
336,430
|
Investment in
short-term deposits and restricted deposits
|
(134,732)
|
|
(57,180)
|
|
(198,192)
|
|
(448,152)
|
Investment in
marketable securities
|
(4,125)
|
|
(38,048)
|
|
(4,125)
|
|
(202,611)
|
Proceeds from
marketable securities
|
42,901
|
|
51,619
|
|
217,270
|
|
191,869
|
Purchase of property
and equipment and lease prepayment
|
(18,690)
|
|
(22,208)
|
|
(53,439)
|
|
(54,120)
|
Capitalization of
internal use of software
|
(686)
|
|
(666)
|
|
(2,620)
|
|
(1,895)
|
Investment in other
assets
|
-
|
|
(580)
|
|
(111)
|
|
(580)
|
Proceeds from sale of
equity securities
|
-
|
|
-
|
|
49,468
|
|
3,193
|
Purchases of
investments in privately held companies
|
(27)
|
|
(100)
|
|
(7,527)
|
|
(1,260)
|
Net cash provided by
(used in) investing activities
|
(45,319)
|
|
38,008
|
|
494,465
|
|
(177,126)
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from exercise
of options and ESPP shares
|
17,931
|
|
19,779
|
|
38,762
|
|
41,793
|
Purchase of treasury
stock
|
-
|
|
-
|
|
(68,319)
|
|
-
|
Repayment of
convertible notes
|
-
|
|
-
|
|
(362,667)
|
|
-
|
Net cash provided by
(used in) financing activities
|
17,931
|
|
19,779
|
|
(392,224)
|
|
41,793
|
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
|
36,756
|
|
58,054
|
|
260,107
|
|
(151,415)
|
CASH AND CASH
EQUIVALENTS—Beginning of period
|
468,037
|
|
241,886
|
|
244,686
|
|
451,355
|
CASH AND CASH
EQUIVALENTS—End of period
|
$
504,793
|
|
$
299,940
|
|
$ 504,793
|
|
$
299,940
|
Wix.com Ltd.
|
|
|
|
|
|
|
|
KEY PERFORMANCE
METRICS
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Creative
Subscriptions
|
290,634
|
|
261,066
|
|
855,853
|
|
774,211
|
Business
Solutions
|
103,207
|
|
84,739
|
|
302,041
|
|
258,415
|
Total
Revenues
|
$
393,841
|
|
$
345,805
|
|
$
1,157,894
|
|
$
1,032,626
|
|
|
|
|
|
|
|
|
Creative
Subscriptions
|
283,917
|
|
269,937
|
|
891,275
|
|
839,645
|
Business
Solutions
|
105,178
|
|
82,527
|
|
311,224
|
|
260,661
|
Total
Bookings
|
$
389,095
|
|
$
352,464
|
|
$
1,202,499
|
|
$
1,100,306
|
|
|
|
|
|
|
|
|
Free Cash
Flow
|
$
44,768
|
|
$
(22,607)
|
|
$
101,807
|
|
$
(72,097)
|
Free Cash Flow
excluding HQ build out and restructuring costs
|
$
62,811
|
|
$
4,559
|
|
$
155,933
|
|
$
(19,582)
|
Creative Subscriptions
ARR
|
$
1,181,629
|
|
$
1,071,045
|
|
$
1,181,629
|
|
$
1,071,045
|
Wix.com Ltd.
|
|
|
|
|
|
|
|
RECONCILIATION OF
REVENUES TO BOOKINGS
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Revenues
|
$
393,841
|
|
$
345,805
|
|
$
1,157,894
|
|
$
1,032,626
|
Change in deferred
revenues
|
387
|
|
6,023
|
|
73,405
|
|
51,306
|
Change in unbilled
contractual obligations
|
(5,133)
|
|
636
|
|
(28,800)
|
|
16,374
|
Bookings
|
$
389,095
|
|
$
352,464
|
|
$
1,202,499
|
|
$
1,100,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Creative Subscriptions
Revenues
|
$
290,634
|
|
$
261,066
|
|
$
855,853
|
|
$
774,211
|
Change in deferred
revenues
|
(1,584)
|
|
8,235
|
|
64,222
|
|
49,060
|
Change in unbilled
contractual obligations
|
(5,133)
|
|
636
|
|
(28,800)
|
|
16,374
|
Creative Subscriptions
Bookings
|
$
283,917
|
|
$
269,937
|
|
$
891,275
|
|
$
839,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Business Solutions
Revenues
|
$
103,207
|
|
$
84,739
|
|
$
302,041
|
|
$
258,415
|
Change in deferred
revenues
|
1,971
|
|
(2,212)
|
|
9,183
|
|
2,246
|
Business Solutions
Bookings
|
$
105,178
|
|
$
82,527
|
|
$
311,224
|
|
$
260,661
|
Wix.com Ltd.
|
|
|
|
RECONCILIATION OF
COHORT BOOKINGS
|
|
|
|
(In
millions)
|
|
|
|
|
Nine Months
Ended
|
|
September
30,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Q1 Cohort
revenues
|
$
30
|
|
$
29
|
Q1 Change in deferred
revenues
|
21
|
|
18
|
Q1 Cohort
Bookings
|
$
51
|
|
$
47
|
Wix.com Ltd.
|
|
|
|
RECONCILIATION OF
REVENUES AND BOOKINGS EXCLUDING FX IMPACT
|
|
|
|
(In
thousands)
|
|
|
|
|
Three Months
Ended
|
|
September
30,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Revenues
|
$
393,841
|
|
$
345,805
|
FX impact on
Q3/23 using Y/Y rates
|
(901)
|
|
-
|
Revenues excluding FX
impact
|
$
392,940
|
|
$
345,805
|
|
|
|
|
Y/Y growth
|
14 %
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
September
30,
|
|
2023
|
|
2022
|
|
(unaudited)
|
Bookings
|
$
389,095
|
|
$
352,464
|
FX impact on
Q3/23 using Y/Y rates
|
(5,692)
|
|
-
|
Bookings excluding FX
impact
|
$
383,403
|
|
$
352,464
|
|
|
|
|
Y/Y growth
|
9 %
|
|
|
Wix.com Ltd.
|
|
|
|
|
|
|
|
TOTAL ADJUSTMENTS GAAP
TO NON-GAAP
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
(1) Share based
compensation expenses:
|
(unaudited)
|
|
(unaudited)
|
Cost of
revenues
|
$
3,621
|
|
$
4,418
|
|
$
11,338
|
|
$
13,204
|
Research and
development
|
30,428
|
|
29,606
|
|
87,500
|
|
88,245
|
Selling and
marketing
|
10,835
|
|
9,261
|
|
30,045
|
|
29,155
|
General and
administrative
|
13,365
|
|
13,511
|
|
37,547
|
|
46,315
|
Total share based
compensation expenses
|
58,249
|
|
56,796
|
|
166,430
|
|
176,919
|
(2)
Amortization
|
1,489
|
|
1,581
|
|
4,466
|
|
4,735
|
(3) Acquisition related
expenses
|
23
|
|
585
|
|
463
|
|
3,471
|
(4) Amortization of
debt discount and debt issuance costs
|
787
|
|
1,305
|
|
3,405
|
|
3,908
|
(5) Impairment,
restructuring and other costs
|
3,843
|
|
-
|
|
29,511
|
|
-
|
(6) Sales tax accrual
and other G&A expenses (income)
|
146
|
|
183
|
|
611
|
|
544
|
(7) Unrealized loss
(gain) on equity and other investments
|
2,400
|
|
(10,182)
|
|
|
|
196,383
|
(8) Non-operating
foreign exchange expenses (income)
|
(8,283)
|
|
(1,675)
|
|
(13,788)
|
|
183
|
(9) Provision for
income tax effects related to non-GAAP adjustments
|
(552)
|
|
2,342
|
|
(6,705)
|
|
(45,902)
|
Total adjustments of
GAAP to Non GAAP
|
$
58,102
|
|
$
50,935
|
|
$
164,081
|
|
$
340,241
|
Wix.com Ltd.
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP
TO NON-GAAP GROSS PROFIT
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Gross Profit
|
$
264,798
|
|
$
217,948
|
|
$
771,479
|
|
$
635,163
|
Share based
compensation expenses
|
3,621
|
|
4,418
|
|
11,338
|
|
13,204
|
Acquisition related
expenses
|
17
|
|
-
|
|
224
|
|
140
|
Amortization
|
668
|
|
759
|
|
2,002
|
|
2,279
|
Non GAAP Gross
Profit
|
269,104
|
|
223,125
|
|
785,043
|
|
650,786
|
|
|
|
|
|
|
|
|
Non GAAP Gross
margin
|
68 %
|
|
65 %
|
|
68 %
|
|
63 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Gross Profit - Creative
Subscriptions
|
$
237,447
|
|
$
199,031
|
|
$
693,132
|
|
$
581,051
|
Share based
compensation expenses
|
2,673
|
|
3,503
|
|
8,386
|
|
10,496
|
Non GAAP Gross Profit -
Creative Subscriptions
|
240,120
|
|
202,534
|
|
701,518
|
|
591,547
|
|
|
|
|
|
|
|
|
Non GAAP Gross margin -
Creative Subscriptions
|
83 %
|
|
78 %
|
|
82 %
|
|
76 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Gross Profit - Business
Solutions
|
$
27,351
|
|
$
18,917
|
|
$
78,347
|
|
$
54,112
|
Share based
compensation expenses
|
948
|
|
915
|
|
2,952
|
|
2,708
|
Acquisition related
expenses
|
17
|
|
-
|
|
224
|
|
140
|
Amortization
|
668
|
|
759
|
|
2,002
|
|
2,279
|
Non GAAP Gross Profit -
Business Solutions
|
28,984
|
|
20,591
|
|
83,525
|
|
59,239
|
|
|
|
|
|
|
|
|
Non GAAP Gross margin -
Business Solutions
|
28 %
|
|
24 %
|
|
28 %
|
|
23 %
|
Wix.com Ltd.
|
|
|
|
|
|
|
|
RECONCILIATION OF
OPERATING LOSS TO NON-GAAP OPERATING INCOME (LOSS)
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Operating
loss
|
$
(5,792)
|
|
$
(62,311)
|
|
$
(26,149)
|
|
$ (252,750)
|
Adjustments:
|
|
|
|
|
|
|
|
Share based
compensation expenses
|
58,249
|
|
56,796
|
|
166,430
|
|
176,919
|
Amortization
|
1,489
|
|
1,581
|
|
4,466
|
|
4,735
|
Impairment,
restructuring and other charges
|
3,843
|
|
-
|
|
29,511
|
|
-
|
Sales tax accrual and
other G&A expenses
|
146
|
|
183
|
|
611
|
|
544
|
Acquisition related
expenses
|
23
|
|
585
|
|
463
|
|
3,471
|
Total
adjustments
|
$
63,750
|
|
$
59,145
|
|
$
201,481
|
|
$
185,669
|
|
|
|
|
|
|
|
|
Non GAAP operating
income (loss)
|
$
57,958
|
|
$
(3,166)
|
|
$
175,332
|
|
$
(67,081)
|
|
|
|
|
|
|
|
|
Non GAAP operating
margin
|
15 %
|
|
-1 %
|
|
15 %
|
|
-6 %
|
Wix.com Ltd.
|
|
|
|
|
|
|
|
RECONCILIATION OF NET
INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS) AND NON-GAAP NET INCOME
(LOSS) PER SHARE
|
|
|
|
|
|
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Net income
(loss)
|
$
6,975
|
|
$
(47,361)
|
|
$
30,183
|
|
$ (385,888)
|
Share based
compensation expenses and other Non GAAP adjustments
|
58,102
|
|
50,935
|
|
164,081
|
|
340,241
|
Non-GAAP net income
(loss)
|
$
65,077
|
|
$
3,574
|
|
$
194,264
|
|
$
(45,647)
|
|
|
|
|
|
|
|
|
Basic Non GAAP net
income (loss) per share
|
$
1.14
|
|
$
0.06
|
|
$
3.43
|
|
$
(0.79)
|
Weighted average shares
used in computing basic Non GAAP net income (loss) per
share
|
56,837,917
|
|
58,355,542
|
|
56,666,881
|
|
57,930,336
|
|
|
|
|
|
|
|
|
Diluted Non GAAP net
income (loss) per share
|
$
1.10
|
|
$
0.06
|
|
$
3.22
|
|
$
(0.79)
|
Weighted average shares
used in computing diluted Non GAAP net income (loss) per
share
|
59,923,820
|
|
58,355,542
|
|
61,411,030
|
|
57,930,336
|
Wix.com Ltd.
|
|
|
|
|
|
|
|
RECONCILIATION OF NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH
FLOW
|
|
|
|
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
Net cash provided by
(used in) operating activities
|
$
64,144
|
|
$
267
|
|
$
157,866
|
|
$
(16,082)
|
Capital expenditures,
net
|
(19,376)
|
|
(22,874)
|
|
(56,059)
|
|
(56,015)
|
Free Cash
Flow
|
$
44,768
|
|
$
(22,607)
|
|
$
101,807
|
|
$
(72,097)
|
|
|
|
|
|
|
|
|
Restructuring and other
costs
|
-
|
|
-
|
|
4,504
|
|
-
|
Capex related to HQ
build out
|
18,043
|
|
27,166
|
|
49,622
|
|
52,515
|
Free Cash Flow
excluding HQ build out and restructuring costs
|
$
62,811
|
|
$
4,559
|
|
$
155,933
|
|
$
(19,582)
|
Wix.com Ltd.
|
|
|
|
|
|
|
|
RECONCILIATION OF BASIC
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND THE DILUTED
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted-average
shares used to compute net income (loss) per share
|
56,837,917
|
|
58,355,542
|
|
56,666,881
|
|
57,930,336
|
Effect of dilutive
securities (included in the effect of dilutive securities is the
assumed
conversion of employee stock options, employee RSUs and the
Notes)
|
1,659,155
|
|
-
|
|
1,622,224
|
|
-
|
Diluted
weighted-average shares used to compute net income (loss) per
share
|
58,497,072
|
|
58,355,542
|
|
58,289,105
|
|
57,930,336
|
|
|
|
|
|
|
|
|
The following items
have been excluded from the diluted weighted average number of
shares
outstanding because they are anti-dilutive:
|
|
|
|
|
|
|
|
Stock
options
|
1,940,648
|
|
4,964,207
|
|
1,940,648
|
|
4,964,207
|
Restricted share
units
|
1,162,995
|
|
2,901,755
|
|
1,162,995
|
|
2,901,755
|
Convertible Notes
(if-converted)
|
1,426,748
|
|
3,969,514
|
|
1,426,748
|
|
3,969,514
|
|
63,027,463
|
|
70,191,018
|
|
62,819,496
|
|
69,765,812
|
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SOURCE Wix.com Ltd.