Wix Reports Second Quarter 2022 Results

Published: Aug. 10, 2022 at 12:00 AM CDT
  • Total revenue of $345.2 million, up 9% y/y, and $349.0 million on a constant currency basis, up 11% y/y
  • Total bookings of $354.6 million, up 3% y/y, and $365.2 million on a constant currency basis, up 7% y/y
  • Partners continue to turn to the Wix platform, resulting in partners revenue of $84.9 million or 25% of total revenue, up 31% y/y and representing a two year CAGR of 56%
  • Cost reduction plan expected to generate approximately $150 million of annualized cost savings and accelerate margin expansion
  • Launched a new Wix Editor experience, combining AI capabilities with new advanced features to create an even more powerful and intuitive web creation experience

NEW YORK, Aug. 10, 2022 /PRNewswire/ -- Wix.com Ltd. (Nasdaq: WIX) today reported financial results for the second quarter ended June 30, 2022. In addition, the Company provided its initial outlook for the third quarter. Please visit the Wix Investor Relations website at https://investors.wix.com/ to view the Q2'22 Shareholder Update and other materials.

(PRNewsfoto/Wix.com Ltd.)
(PRNewsfoto/Wix.com Ltd.)(PRNewswire)

"We are pleased with our fundamental business improvement this quarter as Wix continues to be the go-to platform for any type of user and any type of business globally," said Avishai Abrahami, Wix Co-founder and CEO. "The strong results of our growth initiatives continue. Despite the current macroeconomic environment, we are focused on what is under our control — driving operational efficiencies to accelerate our path to profitability while continuing to execute on growth initiatives, such as launching the new Wix Editor this quarter. We remain committed to executing on our three-year financial plan, enhancing our differentiated business model and delivering innovative capabilities for our users to drive shareholder value."

Lior Shemesh, CFO at Wix, added, "Our results this quarter reflect continued market-wide volatility. We are executing on the three-year plan we shared in May and are undertaking a cost reduction plan that we expect will save approximately $150 million in annualized expenses. These cost reduction measures are expected to accelerate expansion of our gross margin and operating margin as well as help us achieve our free cash flow target as presented in our three-year plan even if market conditions continue to be challenged in 2023."

Cost reduction plan

As part of our commitment to execute on the three-year plan and achieve the free cash flow targets introduced at our Analyst Day in May, today we are announcing a set of comprehensive cost reduction measures that will result in approximately $150 million of annualized cost savings. These savings are not one-time in nature and will continue to be realized on a run-rate basis.  Approximately 20% of the annualized savings are expected to be realized already in 2022. Further, these cost savings do not include any reduction to our user acquisition marketing investments that we adjust to match our TROI thresholds, which we have not changed.

We expect that these reductions in our cost structure will result in free cash flow as a percentage of revenue (excluding headquarters capital expenditures) to be in line with our three-year plan and accelerate margin expansion ahead of the three-year plan in 2023 and beyond.

Key aspects of the plan include right-sizing our workforce and future hiring targets across multiple functions to realign with the operating environment today and optimizing additional operating costs that are not revenue generating.

We continue to take a deeper look to identify additional areas of productivity improvements across our care, sales and marketing, and engineering functions as well as opportunities to rationalize our real estate footprint, among other potential levers.

These measures will allow us to increase our focus on and investment in our highest conviction growth opportunities.

Many of these actions are already underway. Of these $150 million of annualized savings, roughly 25% will come from cost of revenue, mainly our care organization, which will lead to approximately 200 basis points of gross margin improvement in 2023 compared to our three-year plan presented in May.  The other 75% of savings will come primarily from operating expenses with a small amount being capital expenditures.

Q2 2022 Financial Results

  • Total revenue in the second quarter of 2022 was $345.2 million, up 9% y/y and representing a two year CAGR of 21%
    • Transaction revenue was $36.8 million, up 13% y/y
  • Total bookings in the second quarter of 2022 were $354.6 million, up 3% y/y and representing a two year CAGR of 15%
  • Total gross margin on a GAAP basis in the second quarter of 2022 was 61%
  • Total non-GAAP gross margin in the second quarter of 2022 was 62%
  • GAAP net loss in the second quarter of 2022 was $111.2 million, or $1.92 per share
  • Non-GAAP net loss in the second quarter of 2022 was $7.8 million, or $0.14 per share
  • Net cash used by operating activities for the second quarter of 2022 was $(2.7) million, while capital expenditures totaled $13.2 million, leading to free cash flow of $(15.9) million

Financial Outlook

Our guidance for the second half reflects demand that has reset to pre-COVID-19 levels and FX rate headwinds experienced since May.

For Q3, we expect total revenue to be $341 to $345 million, representing 7 - 8% y/y growth. For the full year, we now expect revenue to grow 8 - 10% y/y.  These ranges include the impact of y/y FX rates through July, discontinued commercial activities in Russia and the assumption that market conditions remain challenged for the remainder of the year.

We expect free cash flow to be roughly 2 - 3% of revenue in 2022, inclusive of the cost reduction plan and y/y FX rate headwinds through July.  On a y/y constant currency basis, this would translate into free cash flow margin of 4 - 5% of revenue for full year 2022.

Despite these lower revenue growth expectations, we expect that the cost reduction plan we have implemented will allow free cash flow as a percentage of revenue (excluding headquarters capital expenditures) in 2023 to be in line with the three-year plan outlined in May and drive accelerated gross and operating margins compared to the plan even if market conditions continue to be challenged in 2023. We are committed to this plan and are taking the necessary actions to achieve it.

Conference Call and Webcast Information
Wix will host a conference call to discuss the results at 8:30 a.m. ET on Wednesday, August 10, 2022. To participate on the live call, analysts and investors should register and join at https://register.vevent.com/register/I75e57676e62f46a4bdce023f055300a6. A replay of the call will be available through August 9, 2023 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 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 FX 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 recognised 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 capital expenditures associated with our new 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 active Creative Subscriptions in effect on the last day of the period, multiplied by the monthly revenue of such Creative Subscriptions, other than domain registrations in effect on the last day of the period; (ii) the average revenue per month from domain registrations; (iii) monthly revenue from other partnership agreements.

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; our expectation that we will be able to increase the revenue we derive from the sale of premium subscriptions and business solutions, through our partners; 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; our expectations regarding execution of our multi-year strategic plan and cost reduction plan; our prediction of the future revenues generated by our user cohorts and our ability to maintain and increase such revenue growth; our expectation to maintain and enhance our brand and reputation; our expectation that we will effectively execute our initiatives to scale and improve our user support function through our Customer Care team, and thereby increase user retention, user engagement and sales; our expectation that our products created for markets outside of North America will continue to generate growth in those markets; 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 expectations regarding the extent of the impact on our business and operations of the COVID-19 pandemic, including uncertainty relating to expected consumer dynamics after the COVID-19 pandemic subsides, the effectiveness of government policies, vaccine administration rates and other factors; our expectation regarding the impact of fluctuations in foreign currency exchange rates 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 the growth of our infrastructure; changes we expect may occur to technologies used in our solutions; 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 increasing interest rates and inflationary pressures, lasting effects 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; our expectations about entering into new markets and attracting new customer demographics, including our ability to successfully attract new partners and grow our partner activities 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, 2021 filed with the Securities and Exchange Commission on April 1, 2022. 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


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


Revenues









Creative Subscriptions

$       258,177


$       235,891


$       513,145


$       462,327


Business Solutions

87,047


79,684


173,676


154,027



345,224


315,575


686,821


616,354











Cost of Revenues









Creative Subscriptions

66,252


58,271


131,125


114,017


Business Solutions

68,605


62,641


138,481


120,694



134,857


120,912


269,606


234,711











Gross Profit

210,367


194,663


417,215


381,643











Operating expenses:









Research and development

121,618


104,199


241,483


199,285


Selling and marketing

120,780


123,021


277,494


267,476


General and administrative

42,991


39,411


88,677


73,805


Total operating expenses

285,389


266,631


607,654


540,566


Operating loss

(75,022)


(71,968)


(190,439)


(158,923)


Financial income (expenses), net

(46,926)


143,969


(191,399)


176,894


Other income

58


41


104


106


Income (loss) before taxes on income

(121,890)


72,042


(381,734)


18,077


Taxes on income (tax benefit)

(10,652)


34,409


(43,207)


42,558


Net income (loss)

$      (111,238)


$          37,633


$      (338,527)


$        (24,481)




















Basic net income (loss) per share

$            (1.92)


$              0.66


$            (5.87)


$            (0.43)


Basic weighted-average shares used to compute net income (loss) per share

57,943,140


57,306,260


57,712,372


56,793,411











Diluted net income (loss) per share

$            (1.92)


$              0.60


$            (5.87)


$            (0.43)


Diluted weighted-average shares used to compute net income (loss) per share

57,943,140


64,948,445


57,712,372


56,793,411


Wix.com Ltd.


CONDENSED CONSOLIDATED BALANCE SHEETS


(In thousands)








Period ended



June 30,


December 31,



2022


2021


Assets

(unaudited)


(audited)


Current Assets:





Cash and cash equivalents

$        241,886


$            451,355


Short-term deposits

568,840


411,687


Restricted cash and deposits

9,737


7,012


Marketable securities

353,350


456,515


Trade receivables 

40,800


30,367


Prepaid expenses and other current assets

34,059


32,877


 Total current assets

1,248,672


1,389,813







Long-Term Assets:





Prepaid expenses and other long-term assets 

23,320


41,554


Property and equipment, net

64,955


50,437


Marketable securities

291,572


387,341


Intangible assets and goodwill, net

86,384


89,547


Operating lease right-of-use assets

243,526


101,095


 Total long-term assets

709,757


669,974







 Total assets

$     1,958,429


$        2,059,787







Liabilities and Shareholders' Equity (deficiency)





Current Liabilities:





Trade payables

$        127,113


$            114,584


Employees and payroll accruals

78,169


83,251


Deferred revenues

522,570


484,446


Current portion of convertible notes, net

360,579


-


Accrued expenses and other current liabilities

83,053


62,816


Operating lease liabilities

25,052


29,201


Total current liabilities

1,196,536


774,298







Long-term deferred revenues

67,125


59,966


Long-term deferred tax liability

24,509


72,803


Convertible notes, net

564,998


922,974


Other long-term liabilities

2,090


2,267


Long-term operating lease liabilities

192,735


81,764


Total long-term liabilities

851,457


1,139,774







 Total liabilities

2,047,993


1,914,072







Shareholders'  Equity (deficiency)





Ordinary shares

114


111


Additional paid-in capital

1,137,242


994,795


Treasury Stock

(199,997)


(199,997)


Accumulated other comprehensive income

(40,258)


(1,056)


Accumulated deficit

(986,665)


(648,138)


Total shareholders' equity (deficiency)

(89,564)


145,715







Total liabilities and shareholders' equity

$     1,958,429


$        2,059,787


Wix.com Ltd.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(In thousands)





















Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


OPERATING ACTIVITIES:









Net income (loss) 

$ (111,238)


$      37,633


$ (338,527)


$   (24,481)


Adjustments to reconcile net loss to net cash provided by (used in) operating activities:









Depreciation 

4,022


3,378


7,557


6,810


Amortization

1,580


846


3,154


1,445


Share based compensation expenses

59,139


50,396


120,123


97,027


Amortization of debt discount and debt issuance costs

1,302


1,296


2,603


2,703


Changes in accrued interest and exchange rate on short term and long term deposits

(210)


(63)


(165)


(48)


Amortization of premium and discount and accrued interest on marketable securities, net

1,256


2,082


2,805


4,405


Revaluation on Marketable equity securities

54,920


(73,186)


206,565


(73,186)


Deferred income taxes, net

(12,644)


32,752


(48,219)


40,103


Changes in operating lease right-of-use assets

9,737


8,379


18,575


13,060


Changes in operating lease liabilities

(15,525)


(7,578)


(25,172)


(13,613)


Decrease (increase) in trade receivables

1,216


875


(10,433)


(5,301)


Increase in prepaid expenses and other current and long-term assets

(15,032)


(26,929)


(27,345)


(100,845)


Increase (decrease) in trade payables

(9,573)


2,234


12,113


(1,028)


Increase (decrease) in employees and payroll accruals

(342)


(27,407)


(5,082)


13,147


Increase in short term and long term deferred revenues

7,731


19,266


45,283


69,596


Increase (decrease) in accrued expenses and other current liabilities

20,974


(2,141)


19,816


10,527


Net cash provided by (used in) operating activities

(2,687)


21,833


(16,349)


40,321


INVESTING ACTIVITIES:









Proceeds from short-term deposits and restricted deposits

126,259


40,000


231,259


178,015


Investment in short-term deposits and restricted deposits

(240,972)


(171,529)


(390,972)


(172,131)


Investment in marketable securities

(92,408)


-


(164,563)


-


Proceeds from marketable securities

78,870


90,562


140,250


180,659


Purchase of property and equipment and payment of prepaid expenses

(12,629)


(6,657)


(31,912)


(10,377)


Capitalization of internal use of software

(588)


(462)


(1,229)


(591)


Proceeds from sale of marketable equity securities

-


-


3,193


-


Payment for Businesses acquired, net of acquired cash

-


(37,217)


-


(42,803)


Purchases of investments in privately held companies

(1,000)


(1,500)


(1,160)


(1,500)


Net cash provided by (used in) investing activities

(142,468)


(86,803)


(215,134)


131,272


FINANCING ACTIVITIES:









Proceeds from exercise of options and ESPP shares

432


11,380


22,014


21,802


Net cash provided by financing activities

432


11,380


22,014


21,802


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(144,723)


(53,590)


(209,469)


193,395


CASH AND CASH EQUIVALENTS—Beginning of period

386,609


415,843


451,355


168,858


CASH AND CASH EQUIVALENTS—End of period

$   241,886


$   362,253


$   241,886


$   362,253


Wix.com Ltd.


KEY PERFORMANCE METRICS


(In thousands)












Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


Creative Subscriptions

258,177


235,891


513,145


462,327


Business Solutions

87,047


79,684


173,676


154,027


Total Revenues

$     345,224


$        315,575


$     686,821


$     616,354











Creative Subscriptions

269,921


263,045


569,708


531,104


Business Solutions

84,673


79,816


178,134


162,866


Total Bookings

$     354,594


$        342,861


$     747,842


$     693,970











Free Cash Flow

$      (15,904)


$          14,714


$     (49,490)


$        29,353


Free Cash Flow, excluding capex related to future Wix HQ office build-out

$        (5,993)


$          16,911


$     (24,141)


$        32,385


Creative Subscriptions ARR

$  1,052,852


$        967,281


$  1,052,852


$      967,281


Wix.com Ltd.


RECONCILIATION OF REVENUES TO BOOKINGS


(In thousands)












Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


Revenues

$     345,224


$        315,575


$     686,821


$     616,354


Change in deferred revenues

7,731


19,266


45,283


69,596


Change in unbilled contractual obligations

1,639


8,020


15,738


8,020


Bookings

$     354,594


$        342,861


$     747,842


$     693,970





















Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


Creative Subscriptions Revenues

$     258,177


$        235,891


$     513,145


$     462,327


Change in deferred revenues

10,105


19,134


40,825


60,757


Change in unbilled contractual obligations

1,639


8,020


15,738


8,020


Creative Subscriptions Bookings

$     269,921


$        263,045


$     569,708


$     531,104





















Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


Business Solutions Revenues

$        87,047


$          79,684


$     173,676


$     154,027


Change in deferred revenues

(2,374)


132


4,458


8,839


Business Solutions Bookings

$        84,673


$          79,816


$     178,134


$     162,866


Wix.com Ltd.


RECONCILIATION OF COHORT BOOKINGS


(In millions)



Six Months Ended



June 30,



2022


2021



(unaudited)


Q1 Cohort revenues

$                19


$                  25


Q1 Change in deferred revenues

21


26


Q1 Cohort Bookings

$                40


$                  51


Wix.com Ltd.


TOTAL ADJUSTMENTS GAAP TO NON-GAAP


(In thousands)





















Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021


(1) Share based compensation expenses:

(unaudited)


(unaudited)


Cost of revenues

$          4,555


$            3,809


$          8,786


$          7,310


Research and development

29,919


24,490


58,639


47,778


Selling and marketing

10,019


8,213


19,894


15,655


General and administrative

14,646


13,884


32,804


26,284


Total share based compensation expenses

59,139


50,396


120,123


97,027


(2) Amortization

1,580


846


3,154


1,445


(3) Acquisition related expenses

1,187


2,351


2,886


4,056


(4) Amortization of debt discount and debt issuance costs

1,302


1,296


2,603


2,703


(5) Sales tax accrual and other G&A expenses (income)

189


579


361


1,031


(6) Unrealized loss (gain) on equity and other investments

54,920


(142,348)


206,565


(171,861)


(7) Non-operating foreign exchange expenses (income)

(2,274)


363


1,858


2,953


(8) Provision for income tax effects related to non-GAAP adjustments

(12,632)


32,740


(48,244)


39,528


Total adjustments of GAAP to Non GAAP

$     103,411


$        (53,777)


$     289,306


$     (23,118)


Wix.com Ltd.


RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT


(In thousands)





















Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


Gross Profit

$     210,367


$        194,663


$     417,215


$     381,643


Share based compensation expenses

4,555


3,809


8,786


7,310


Acquisition related expenses

59


112


140


279


Amortization 

759


358


1,520


455


Non GAAP Gross Profit 

215,740


198,942


427,661


389,687











Non GAAP Gross margin

62 %


63 %


62 %


63 %





















Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


Gross Profit - Creative Subscriptions

$     191,925


$        177,620


$     382,020


$     348,310


Share based compensation expenses

3,608


2,887


6,993


5,473


Non GAAP Gross Profit - Creative Subscriptions

195,533


180,507


389,013


353,783











Non GAAP Gross margin - Creative Subscriptions

76 %


77 %


76 %


77 %





















Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


Gross Profit - Business Solutions

$        18,442


$          17,043


$        35,195


$        33,333


Share based compensation expenses

947


922


1,793


1,837


Acquisition related expenses

59


112


140


279


Amortization 

759


358


1,520


455


Non GAAP Gross Profit - Business Solutions

20,207


18,435


38,648


35,904











Non GAAP Gross margin - Business Solutions

23 %


23 %


22 %


23 %


Wix.com Ltd.


RECONCILIATION OF OPERATING LOSS TO NON-GAAP OPERATING LOSS


(In thousands)












Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


Operating loss

$     (75,022)


$        (71,968)


$   (190,439)


$   (158,923)


Adjustments:









Share based compensation expenses

59,139


50,396


120,123


97,027


Amortization 

1,580


846


3,154


1,445


Sales tax accrual and other G&A expenses

189


579


361


1,031


Acquisition related expenses

1,187


2,351


2,886


4,056


Total adjustments

$        62,095


$          54,172


$     126,524


$     103,559











Non GAAP operating loss

$      (12,927)


$         (17,796)


$     (63,915)


$     (55,364)


Wix.com Ltd.


RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP NET LOSS AND NON-GAAP NET LOSS PER SHARE


(In thousands, except  per share data)












Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


Net income (loss)

$    (111,238)


$          37,633


$   (338,527)


$     (24,481)


Share based compensation expenses and other Non GAAP adjustments

103,411


(53,777)


289,306


(23,118)


Non-GAAP net loss

$        (7,827)


$        (16,144)


$     (49,221)


$     (47,599)











Basic  and diluted Non GAAP net loss per share

$          (0.14)


$            (0.28)


$          (0.85)


$          (0.84)


Weighted average shares used in computing basic and diluted Non GAAP net loss per share

57,943,140


57,306,260


57,712,372


56,793,411


Wix.com Ltd.


RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW


(In thousands)












Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)


Net cash provided by (used in) operating activities

$        (2,687)


$          21,833


$     (16,349)


$        40,321


Capital expenditures, net

(13,217)


(7,119)


(33,141)


(10,968)


Free Cash Flow

$     (15,904)


$          14,714


$     (49,490)


$        29,353











Capex related to future Wix HQ office build-out

9,911


2,197


25,349


3,032


Free Cash Flow, excluding capex related to future Wix HQ office build-out

$        (5,993)


$          16,911


$     (24,141)


$        32,385


Wix.com Ltd.


RECONCILIATION OF BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND THE
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 





















Three Months Ended


Six Months Ended



June 30,


June 30,



2022


2021


2022


2021



(unaudited)


(unaudited)




















Basic weighted-average shares used to compute net income (loss) per share 

57,943,140


57,306,260


57,712,372


56,793,411


Effect of dilutive securities (included in the effect of dilutive securities is the assumed conversion of employee stock options, employee RSUs and the Notes)

-


7,642,185


-


-


Diluted weighted-average shares used to compute net income (loss) per share 

57,943,140


64,948,445


57,712,372


56,793,411











The following items have been excluded from the diluted weighted average number of shares outstanding because they are anti-dilutive:









Stock options

5,024,271


643,955


5,024,271


4,735,250


Restricted share units

3,009,354


436,301


3,009,354


2,063,427


 Convertible Notes (if-converted)

3,969,514


-


3,969,514


3,969,514



69,946,279


66,028,701


69,715,511


67,561,602

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SOURCE Wix.com Ltd.

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