Wix.com Inc.: Wix Reports Fourth Quarter and Full Year 2016 Results

Tickers: WIX

Wix Reports Fourth Quarter and Full Year 2016 Results - Collections Growth Accelerates to 42% Y/Y in 2016, Revenue Grows 43%

  • Collections Growth Accelerates to 46% Y/Y in Q4'16, Revenue Accelerates to 48% Y/Y

  • Free Cash Flow was a Record $18.7 million in Q4'16, up 122% Y/Y

  • Top Company Interviews

    Microsoft Corporation
    Intel Corporation
    Pfizer, Inc.
    General Electric Company
    International Business Machines Corporation
    Delivered First Ever Quarter of Non-GAAP Profitability

  • Grew Premium Subscriptions 39% Y/Y to 2.5 Million

  • Initial 2017 Outlook Highlighted by Robust Top Line Growth and Strong Free Cash Flow

    NEW YORK, February 15, 2017 -- Wix.com Ltd. (Nasdaq: WIX), a leading global software platform for small businesses to operate online, today reported another strong quarter of financial results for the fourth quarter and full year ended December 31, 2016. In addition, the Company provided its initial outlook and expectations for its financial performance in the first quarter and full year 2017.

    "Our focused investment in technology and our superior marketing execution continue to have a meaningful positive impact on our growth and financial results," said Avishai Abrahami, Co-founder and CEO of Wix. "In the last twelve months, this strategy delivered innovative products such as Wix ADI and the mobile Wix App, as well as growth in our brand and successful marketing execution, highlighted by our Super Bowl LI campaign. This strategic approach will enable us to further extend our technology leadership, acquire subscriptions efficiently and grow our brand globally in 2017 and beyond."

    Lior Shemesh, CFO of Wix, commented, "The re-acceleration in top line growth this quarter was exceptional

    -- a direct result of the improvement in conversion of registered users to premium subscriptions and higher collections per new subscriptions due to record adoption of our vertical solutions. The stronger than expected inflection to Q4 non-GAAP profitability highlights the flexibility and scalability of our low, fixed-cost model. We expect to deliver continued top line growth and higher free cash flow in 2017 and beyond by further leveraging our investments in technology and marketing."

    Q4 2016 and Full Year 2016 Financial Summary

    Three months ended Dec 31,

    $ in thousands

    2016

    2015

    Y/Y growth

    Prior Q4 2016 Outlook

    Revenue

    $84,176

    $56,831

    48%

    $81,000 - 82,000

    Collections

    $97,652

    $66,870

    46%

    $93,000 - 94,000

    Operating Loss

    $(4,742)

    $(10,163)

    NM

    Non-GAAP Operating Profit (Loss)

    $3,879

    $(4,417)

    NM

    Adjusted EBITDA

    $17,877

    $7,025

    154%

    $14,000 - 15,000

    Free Cash Flow

    $18,683

    $8,397

    122%

    Twelve months ended Dec 31,

    $ in thousands 2016 2015

    Y/Y

    growth Prior 2016 Outlook

    Revenue

    $290,103

    $203,518

    43%

    $287,000 - 288,000

    Collections

    $342,069

    $241,687

    42%

    $337,000 - 338,000

    Operating Loss

    $(44,032)

    $(48,635)

    NM

    Non-GAAP Operating Loss

    $(12,529)

    $(29,266)

    NM

    Adjusted EBITDA

    $42,588

    $14,721

    189%

    $38,500 - 39,500

    Free Cash Flow

    $36,158

    $14,534

    149%

    Q4 2016 Results and Highlights

  • Revenue increased 48% to $84.2 million compared to $56.8 million for the fourth quarter last year

  • Collections increased 46% to $97.7 million compared to $66.9 million for the fourth quarter last year

  • Gross margin on a GAAP basis was 85% compared to 83% in the fourth quarter of last year. Non- GAAP gross profit was 87% of collections compared to 85% in the fourth quarter of last year

  • GAAP operating loss was $4.7 million compared to loss of $10.2 million in the fourth quarter a year ago. On a non-GAAP basis, operating income was $3.9 million compared to an operating loss of $4.4 million in the fourth quarter last year

  • GAAP net loss was $6.2 million, or $(0.14) per share, compared to a net loss of $11.3 million, or

    $(0.28) per share for the fourth quarter of 2015

  • Non-GAAP net income was $2.7 million, or $0.06 per share, compared to a non-GAAP net loss of

    $5.4 million, or $(0.13) per share for the fourth quarter of 2015

  • Adjusted EBITDA was $17.9 million compared to $7.0 million for the fourth quarter of 2015

  • Free cash flow was $18.7 million compared to $8.4 million for the fourth quarter of 2015

  • Added 171,000 net premium subscriptions in the period to reach 2.5 million as of December 31, 2016, a 39% increase over the fourth quarter of 2015

  • Added 5.0 million registered users in the fourth quarter. Registered users as of December 31, 2016 were 97.0 million, representing a 27% increase compared to the fourth quarter of 2015

    Recent Business Highlights

  • Acquired flok to Enhance CRM Technology: Wix acquired flok, a customer loyalty and engagement platform. flok's solutions are designed to increase customer value, generate organic referrals and boost small and medium businesses' online presence and reputation. The move supports Wix's strategic plan to increase its portfolio of business technology solutions providing small and medium businesses easy ways to engage and reward their customers.

  • Announced Integration with Square: Wix announced a partnership with Square to give Wix merchants and entrepreneurs in North America a new way to transact. The Square integration improves payment processing and allows both online and in-person payments via a mobile device based POS. In addition, a user can create a stunning Wix Store and, with a few clicks, manage its store and its catalog on the Wix App with the ability to accept payments online or in-person with Square.

  • Launched #DisruptiveWorld campaign around Super Bowl LI: Wix launched its #DisruptiveWorld campaign in mid-January on YouTube and Facebook Live, the first company to launch a Super Bowl campaign using these live video platforms. The global campaign, starring Jason Statham and Gal Gadot, included numerous videos, user engagement opportunities, contests and social activations and was highlighted by a 30-second spot during the fourth quarter of Super Bowl LI. According to Visible Measures, Wix videos garnered more views online than any other brand prior to the airing of the Super Bowl.

  • Wix Mobile Growth: Wix users have created over 22 million mobile sites to date, making Wix one of the largest mobile site development platforms globally.

  • Global E-commerce Platform: E-commerce subscriptions reached 332,000 during the quarter. Growth of e-commerce and transaction-enabled websites continues to exceed overall subscriptions growth, highlighting Wix's broad reach with small businesses.

  • Strong Platform Engagement: Continued engagement with the Wix ecosystem is illustrated by 480 million user contacts saved onto the Wix platform by users. Leveraging Wix's MyAccount CRM system, business owners track customer activity data, manage relationships and communicate using Wix ShoutOut, Wix's email marketing solution.

    Financial Outlook

    The Company is introducing its outlook for the first quarter of 2017 and for full year 2017 as follows:

  • For the first quarter of 2017:

    Q1 2017 Outlook Y/Y growth

    Revenue

    $89 - $90 million

    45% - 46%

    Collections

    $107 - $109 million

    41% - 44%

  • For the full year 2017:

2017 Outlook Y/Y growth

Revenue

$409 - $411 million

41% - 42%

Collections

$452 - $458 million

32% - 34%

Free Cash Flow

$71 - $72 million

96% - 99%

As previously announced, in response to the U.S. Securities and Exchange Commission's May 2016 Compliance and Disclosure Interpretations on non-GAAP financial measures, beginning with our earnings release for Q1 2017, we do not intend to provide guidance for or report adjusted EBITDA. We will continue to report free cash flow as a key non-GAAP financial measure of our business. We believe this change will assist investors in evaluating our ongoing performance and increase the comparability of our results with those of our peer companies. Please refer to the Shareholder Update posted on our investor relations website for a reconciliation of adjusted EBITDA to free cash flow.

Conference Call and Webcast Information

Wix.com will host a conference call at 8:30 a.m. ET on Wednesday, February 15, 2017 to answer questions about the financial and operational performance of the business during the fourth quarter 2016. 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, supplemental data sheet and supporting slides to its Investor Relations website at https://investors.wix.com/results.cfm. 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. A telephonic replay of the call will be available through February 22, 2017 at 11:59 p.m. ET by dialing 855-859-2056 (US/Canada) or 404-537-3406 (International) and providing Conference ID: 60437734.

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/.

Wix.com Inc. published this content on 15 February 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 15 February 2017 06:07:17 UTC.