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 Wix Reports Second Quarter 2018 Results
   Wednesday, July 25, 2018 1:00:00 AM ET

NEW YORK, July 25, 2018 /PRNewswire/ -- Ltd. (Nasdaq: WIX), a leading cloud-based web development platform, today reported financial results for the second quarter ended June 30, 2018. In addition, the Company provided its initial outlook for the third quarter of 2018 and increased its outlook for the full year 2018.


"Our strong second quarter results demonstrate our continued ability to provide users of all kinds who come to Wix with a complete product platform so they can create their dreams online," said Avishai Abrahami, Co-founder and CEO of Wix. "During the second half of the year, we plan to increase penetration of our existing markets and make progress in realizing the benefits of a larger market opportunity as we gain momentum in new products, including ADI in additional languages, Wix Answers and Wix Code."

Lior Shemesh, CFO of Wix, added, "Our results in the second quarter highlighted again our combination of strong revenue and collections growth and increasing free cash flow. We also successfully raised $443 million in convertible notes with a 0% coupon. This capital raise bolsters our balance sheet and provides us with additional financial flexibility."

Q2 2018 Financial Summary

Additional Q2 2018 Results and Highlights

  • Revenue in the second quarter of 2018 was $146.1 million, a 41% increase over the same period last year. Under ASC 605, second quarter revenue would have been $144 million, a 39% increase over last year

  • Collections in the second quarter of 2018 were $159.9 million, a 37% increase over the prior year period

  • Gross margin on a GAAP basis in the second quarter of 2018 was 79%, compared to 83% for the second quarter of 2017; non-GAAP gross margin in the second quarter of 2018, calculated as non-GAAP gross profit as a percent of revenue, was 80%, compared to 84% for the second quarter of 2017 

    • Under ASC 605, second quarter 2018 GAAP gross margin as a percent of revenue would have also been 79% and non-GAAP gross margin as a percent of revenue would have also been 80%

  • Results in the second quarter include the impact of the change from net (agent) to gross (principal) accounting related to the amended terms of our partnership agreement with Google announced earlier this year. As previously stated, this impact is an approximately $30 million benefit to FY 2018 revenue and collections and approximately $7-8 million each quarter in 2018. This impact also has resulted in a year-over-year decrease in our GAAP and non-GAAP gross margin

  • GAAP net loss in the second quarter of 2018 was $(5.6) million, or $(0.12) per share, compared to a net loss of $(14.3) million, or $(0.31) per share, for the second quarter of 2017. Under ASC 605, second quarter 2018 GAAP net loss would have been $(6.9) million

  • Non-GAAP net income in the second quarter of 2018 was $13.8 million, or $0.29 per share, compared to a non-GAAP net loss of $(0.2) million, or $(0.00) per share for the second quarter of 2017. Under ASC 605, second quarter 2018 non-GAAP net income would have been $12.6 million

  • Net cash provided by operating activities in the second quarter of 2018 was $27.3 million, while capital expenditures totaled $3.4 million, leading to free cash flow of $23.9 million, compared to $17.4 million of free cash flow in the second quarter of 2017, a 37% year-over-year increase

  • Added 205,000 net premium subscriptions in the second quarter of 2018 to reach 3.7 million as of June 30, 2018, a 28% increase over the total number of subscriptions at the end of the second quarter of 2017

  • Added 5.8 million registered users in the second quarter of 2018. Registered users as of June 30, 2018 were 131 million, representing a 20% increase compared to the end of the second quarter of 2017

Recent Business Highlights  

  • Momentum in Wix Code Adoption Continues: Usage of Wix Code continues to increase as users across sectors and skill levels are building a wide variety of websites and applications with the product. Activity in the Wix Code Forum, our online community for users to find help and interact with one another, is also increasing as users have contributed over 35,000 posts and comments and have generated over 1 million views. 

  • Recently Launched Wix Mobile Site Builder: In response to increasing requests from our users, we recently launched a Wix mobile site builder. This product utilizes the same AI technology that we released in June 2016. Users can now create a professional looking customized website entirely from a mobile device. Users are then able to modify the site further on either a mobile device or on a desktop using the Wix Editor. This product is another example of our ability to innovate in response to requests from users who come to Wix to build their brands and businesses online.

  • Completed Successful Capital Raise: In June and July, Wix raised $443 million in a private offering of its 0% Convertible Senior Notes due 2023. The size of the offering was upsized from the initial base offering and includes the over-allotment option, which the initial purchasers exercised in full. In connection with this offering, Wix entered into negotiated capped call transactions, which are expected generally to reduce the potential dilution to the ordinary shares of Wix upon any conversion of Notes and/or to offset any cash payments Wix is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the capped call transactions will initially be $211.30 per share, which represents a premium of 100% over the Wix share price of $105.65 on June 21, 2018. Proceeds from the offering were partially used to pay for the capped call transactions with the remaining net proceeds to be used for general corporate purposes. 

Financial Outlook

Wix is introducing its outlook for the third quarter of 2018 as follows:

Wix is increasing its outlook for the full year 2018 following the second quarter results:

Conference Call and Webcast Information

Wix will host a conference call at 8:30 a.m. ET on Wednesday, July 25, 2018 to answer questions about the financial and operational performance of the business during the second quarter of 2018. The conference call will include a brief statement by management and will focus on answering questions about our results during the quarter. To enhance the Q&A portion of this call, the Company has posted a shareholder update and supporting slides to its Investor Relations website at . These materials provide shareholders and analysts with additional detail for analyzing results in advance of the quarterly conference call.

To participate on the live call, analysts and investors should dial 866-393-4306 (US/Canada), 734-385-2616 (International) or 1-809-315-362 (Israel) at least ten minutes prior to the start time of the call and reference Conference ID 5158929. A telephonic replay of the call will be available through July 29, 2018 at 11:59 p.m. ET by dialing 855-859-2056 (US/Canada) or 404-537-3406 (International) and providing Conference ID 5158929.

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 .

About Ltd.

Wix is leading the way with a cloud-based development platform for over 132 million registered users worldwide. Wix was founded on the belief that the Internet should be accessible to everyone to develop, create and contribute. Through free and premium subscriptions, Wix empowers millions of businesses, organizations, artists, and individuals to take their businesses, brands and workflow online. The Wix Editor, Wix ADI, a highly curated App Market, and Wix Code enable users to build and manage a fully integrated and dynamic digital presence. Wix's headquarters are in Tel Aviv with offices in Be'er Sheva, Berlin, Dnipro, Kiev, Los Angeles, Miami, New York, San Francisco, São Paulo and Vilnius.

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Download: Wix App  is available for free on Google Play  and in the App Store

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, Wix uses the following non-GAAP financial measures: collections, non-GAAP gross margin, non-GAAP operating income (loss), free cash flow, non-GAAP net income (loss) and non-GAAP net income (loss) per share (collectively the "Non-GAAP financial measures"). Collections represents the total cash collected by us from our customers in a given period and is calculated by adding the change in deferred revenues for a particular period to revenues for the same period. Non-GAAP gross margin represents gross profit calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related costs 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, and acquisition-related costs. Non-GAAP net income (loss) represents net loss calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, amortization, and acquisition-related costs. 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.

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 of GAAP to Non-GAAP Financial Measures" table in this press release. This accompanying table has 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 has not reconciled its guidance as to free cash flow to cash flow from operations because it does not provide guidance for cash flow from operations. As items that impact cash flow from operations are out of the Company's control and/or cannot be reasonably predicted, the Company is unable to provide such guidance. Accordingly, a reconciliation to cash flow from operations is not available without unreasonable effort.

Forward-Looking Statements

This press release 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, collections and free cash flow, the availability, merchantability or functionality of certain new products or features and their anticipated product demand and customer satisfaction, and may be identified by words like "anticipate," "assume," "believe," "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 press release, including the full year 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 ability to grow our user base and premium subscriptions; our ability to maintain and enhance our brand and reputation; our prediction of the future collections generated by our user cohorts; our ability to manage the growth of our infrastructure effectively; our ability to effectively execute our initiatives to scale and improve our user support function; customer acceptance of new products and other challenges inherent in new product development, changes to technologies used in our solutions or in global, national, regional or local economic, business, competitive, market, regulatory and other factors discussed under the heading "Risk Factors" in the Company's 2017 annual report on Form 20-F filed with the Securities and Exchange Commission on March 29, 2018. 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.

Investor Relations:
Maggie O'Donnell

Media Relations:
Vivian Hernandez







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