PR Newswire | Nov 12, 2020 01:00AM EST

11/12 00:00 CST

Wix Reports Third Quarter 2020 Results- Outperformance continues in Q3 with strong revenue and collections growth, well ahead of expectations-- Revenue of $254.2 million, up 29% y/y-- Collections of $280.9 million, up 36% y/y, an acceleration from Q2 y/y growth-- Creative Subscriptions ARR increased 24% y/y to $840.5 million- Rising value of user cohorts driven by large Q3 cohort of 7.8 million new users and continued momentum from Q1 and Q2 2020 user cohorts-- Q3 user cohort generated highest conversion of registered users to premium subscriptions in over two years as well as higher collections per subscription-- Future collections expected from existing cohorts increased 43% versus a year ago to over $9.2 billion over the next 8 years- Businesses continue to turn to Wix to build and manage their online presence-- Growing adoption of Business package subscriptions, business applications and Wix Payments throughout Q3-- Strong growth in Wix Stores subscriptions in Q3, increasing over 2x overall subscriptions- Record levels of demand and strong execution in 2020 paves the way for multiple growth drivers in 2021 and beyond NEW YORK, Nov. 12, 2020

NEW YORK, Nov. 12, 2020 /PRNewswire/ -- Wix.com Ltd. (Nasdaq: WIX) today reported strong financial results for the third quarter ended September 30, 2020, exceeding the high end of its guidance ranges for revenue, collections and free cash flow. In addition, the Company provided its outlook for the fourth quarter of 2020.

"Demand for an online presence continues to remain at high levels," said Avishai Abrahami, Co-founder and CEO of Wix. "Businesses are using Wix more than ever before, and we are seeing them utilize our platform to not only help them create a website, but also to support them as they manage their business and grow their brands. Our web creation products and business solutions have enabled millions of our users to achieve success despite the ongoing difficulties that they are facing."

Lior Shemesh, CFO of Wix, added, "Our strong results in Q3 were driven by continued high levels of demand from new users for our website creation products and business solutions as well as the ongoing monetization of users who joined Wix over the most recent quarters. Users that joined Wix during Q3 purchased subscriptions at higher rates that we have seen in several years and at higher prices. This significant growth in new users, as well as our continued execution in product development and marketing, position us well to drive growth in 2021 and beyond."

Nir Zohar, President and COO, said, "Throughout Q3, even as parts of the world began re-opening economies, we experienced strong growth, which demonstrates the new state of mind for people and businesses about the need for an online presence. Our teams across the globe continue to execute at their highest levels throughout this tumultuous time, providing world class solutions for those in need of an online presence. We remain focused on meeting the needs of users who come to Wix to create, manage and grow their businesses and brands online."

Q3 2020 Financial Results

* Total revenue in the third quarter of 2020 was $254.2 million, compared to $196.8 million in the third quarter of 2019, an increase of 29% y/y * Creative Subscriptions revenue in the third quarter of 2020 was $203.0 million, compared to $164.8 million in the third quarter of 2019, an increase of 23% y/y * Business Solutions revenue in the third quarter of 2020 was $51.2 million, compared to $32.0 million in the third quarter of 2019, an increase of 60% y/y

* Creative Subscriptions ARR was $840.5 million in the third quarter of 2020, compared to $680.4 million in the third quarter of 2019, an increase of 24% y/y * Total collections in the third quarter of 2020 were $280.9 million, compared to $205.9 million in the third quarter of 2019, an increase of 36% y/y * Creative Subscriptions collections in the third quarter of 2020 were $228.3 million, compared to $173.6 million in the third quarter of 2019, an increase of 32% y/y * Business Solutions collections in the third quarter of 2020 were $52.6 million, compared to $32.3 million in the third quarter of 2019, an increase of 63% y/y

* Total gross margin on a GAAP basis in the third quarter of 2020 was 69%, compared to 73% in the third quarter of 2019. The y/y decline was related to incremental investments in Customer Care, hosting and the faster revenue growth of the Business Solutions segment * Creative Subscriptions gross margin on a GAAP basis was 79%, compared to 81% in the third quarter of 2019. The y/y decline was related to the investment in expanding our Customer Care organization and higher hosting costs to serve the increased number of users * Business Solutions gross margin on a GAAP basis was 29% compared to 32% in the third quarter of 2019. The y/y decline was related primarily to the growth of Wix Payments, the expansion of Customer Care and higher hosting costs to meet the increased number of users

* Total non-GAAP gross margin in the third quarter of 2020, calculated as non-GAAP gross profit as a percent of revenue, was 70%, compared to 74% in the third quarter of 2019. The y/y decline was related to incremental investments in Customer Care, hosting and the faster revenue growth of the Business Solutions segment * Creative Subscriptions gross margin on a non-GAAP basis was 80%, compared to 82% in the third quarter of 2019. The y/y decline was related to the investment in expanding our Customer Care organization and higher hosting costs to serve the increased number of users * Business Solutions gross margin on a non-GAAP basis was 31%, compared to 33% in the third quarter of 2019. The y/y decline was related primarily to the growth of Wix Payments, the expansion of Customer Care and higher hosting costs to meet the increased number of users

* GAAP net loss in the third quarter of 2020 was $(56.8) million, or $(1.03) per share, compared to a net loss of $(17.4) million, or $(0.34) per share, for the third quarter of 2019 * Non-GAAP net loss in the third quarter of 2020 was $(8.0) million, or $(0.14) per share, compared to non-GAAP net income of $20.8 million, or $0.41 per share, for the third quarter of 2019 * Net cash provided by operating activities in the third quarter of 2020 was $24.5 million, while capital expenditures totaled $5.1 million, leading to free cash flow of $19.4 million, compared to $29.2 million of free cash flow in the third quarter of 2019, a (34)% y/y decrease * Excluding the capex investment associated with our new headquarters office build out, free cash flow would have been $20.2 million, a decrease of (31)% y/y

* Added 302,000 net premium subscriptions in the third quarter of 2020, a 164% increase y/y, to reach 5.3 million as of September 30, 2020, a 20% increase over the total number of premium subscriptions at the end of the third quarter of 2019 * Added 7.8 million registered users in the third quarter of 2020, a 42% increase y/y. Registered users as of September 30, 2020 were 189 million, representing a 19% increase compared to the end of the third quarter of 2019

Recent Business Highlights

* In August, Wix issued $575 million of 0% convertible senior notes due 2025. The size of the offering was upsized from the initial base offering and includes the over-allotment option that the initial purchasers exercised in full. In connection with this offering, Wix entered into negotiated capped call transactions that 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. Proceeds from the offering were partially used to pay for the capped call transactions with the remaining net proceeds to be used for potential acquisitions or general corporate purposes * Announced Wix Capital, an internal venture arm that invests in technology innovators that are focused on the future of the web and that look to accelerate how businesses operate in today's evolving digital landscape * Partnered with Vodafone to bring Wix to the Vodafone Business Marketplace platform, enabling its customers to build an online presence. The Vodafone partnership was a key milestone for the Wix Channels initiative, which expands Wix's global growth by enabling international service providers to sell Wix website subscriptions and business solutions directly to their customers * Announced the expansion of the Wix Playground Academy, an intensive web design program, into Europe in January 2021. The Academy bridges the gap between design school and the professional world and helps designers elevate their multidisciplinary design experience * Enabled merchants to offer their buyers installment payment plans for purchases. Wix now offers Afterpay in the US, Australia and New Zealand and Clearpay in the UK as well as Laybuy in the UK, Australia and New Zealand

Financial Outlook

Despite the continued uncertainty surrounding the pandemic, we remain focused on being a destination for creators and businesses to move and grow online. Our Q4 guidance reflects the new state of mind of creators and businesses about the importance of an online presence and the continuation of demand for our offering.

Our outlook is also underscored by continued gains from investments in our business, including improving and growing our Customer Care organization, bolstering our hosting infrastructure and increasing marketing activities. We believe these investments will continue to drive positive returns.

We are introducing Q4 guidance as follows:

Implied FY 2020 Y/Y Q4 2020 Outlook Y/Y growth growth Outlook

Revenue $266 - 271 million30 - 32% $972 - 977 million 28%

Collections $295 - 305 million30 - 35% $1,090 - 1,100 million31 - 32%

Free Cash Flow $16 - 21 million (57) - (44)%$122 - 127 million (4) - 0%

Free Cash Flow (excluding capex for future$17 - 22 million (55) - (41)%$125 - 130 million (2) - 2%Wix HQ office build out)

Conference Call and Webcast Information

Wix will host a conference call at 8:30 a.m. ET on Thursday, November 12, 2020 to answer questions about the financial and operational performance of the business for the third quarter ended September 30, 2020. 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 https://investors.wix.com/. 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 +1-877-667-0467 (US/ Canada), +1-346- 354-0953 (International) or 1-809-315-362 (Israel) at least ten minutes prior to the start time of the call and reference Conference ID 4409229. A telephonic replay of the call will be available through November 19, 2020 at 11:30 a.m. ET by dialing +1-855-859-2056 and providing Conference ID 4409229.

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 leading the way with a cloud-based website development platform for over 189 million registered users worldwide today. The Wix website builder 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, Editor X, a highly curated App Market, Ascend by Wix and Corvid by Wix enable users to build and manage a fully integrated and dynamic digital presence. Wix's headquarters are in Tel Aviv with offices in Austin, Be'er Sheva, Berlin, Cedar Rapids, Denver, Dnipro, Dublin, Kiev, Los Angeles, Miami, New York, San Francisco, Sao Paulo, Tokyo and Vilnius.

Visit us: on our blog,Facebook, Twitter, Instagram, LinkedInand PinterestDownload: Wix App is available for free on Google Play and in the App StoreFor more about Wix please visit our Press Room

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, cumulative cohort collections, collections 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 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. Collections represent 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 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. 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, 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.

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 collections, 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.

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, collections 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 fourth quarter 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, including through our Wix Partner Program; uncertainty surrounding the duration and severity of COVID-19 and its effects on our business, including changes in consumer dynamics shifting to online and increased GMV on our platform; our ability to create new and higher monetization opportunities from our premium subscriptions; our ability to enter into new markets, and attract new customer segments, and our ability to successfully enter into partnership agreements; our ability to maintain and enhance our brand and reputation; our prediction of the future collections generated by our user cohorts; our share repurchases made pursuant to our share repurchase plan; 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, including through the recent expansion of our Customer Solutions organization by engaging additional agents around the world to provide 24/7 support in nine different languages; the success of our sales efforts; customer acceptance and satisfaction of new products and other challenges inherent in new product development; changes to technologies used in our solutions; or changes in global, national, regional or local economic, business, competitive, market, regulatory and other factors discussed under the heading "Risk Factors" in the Company's 2019 annual report on Form 20-F filed with the Securities and Exchange Commission on April 2, 2020. 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 RelationsMaggie O'Donnellir@wix.com914-267-7390

Media Relations:pr@wix.com

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,

2019 2020 2019 2020

(unaudited) (unaudited)

Revenue

$ $ $ $ Creative Subscriptions 164,761 473,137 569,711 202,996

Business Solutions 32,030 51,184 83,363 136,515

196,791 254,180 556,500 706,226

Cost of Revenue

Creative Subscriptions 31,542 43,361 87,485 117,261

Business Solutions 21,753 36,479 52,187 95,131

53,295 79,840 139,672 212,392

Gross Profit 143,496 174,340 416,828 493,834

Operating expenses:

Research and development 64,488 84,473 184,157 230,653

Selling and marketing 75,862 113,092 232,909 328,581

General and administrative 23,751 26,515 62,320 76,482

Total operating expenses 164,101 224,080 479,386 635,716

Operating loss (20,605) (49,740) (62,558) (141,882)

Financial expenses, net 1,242 (7,298) (1,068) (9,492)

Other income (expenses) 117 25 149 84

Loss before taxes on income (19,246) (57,013) (63,477) (151,290)

Taxes on income (1,879) (171) 1,364 2,441

$ $ $ $ Net loss (17,367) (64,841) (153,731) (56,842)

Basic and diluted net loss per $ $ $ $ share (1.29) (2.85) (0.34) (1.03)

Basic and dilutedweighted-average shares used to 50,862,253 55,356,961 50,232,546 53,963,584compute net loss per share

Wix.com Ltd.

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

Period ended

December 31, September 30,

2019 2020

Assets (audited) (unaudited)

Current Assets:

Cash and cash equivalents $ 268,103 $ 158,456

Short term deposits 294,096 540,069

Restricted cash and deposit 1,149 1,135

Marketable securities 164,301 299,743

Trade receivables 16,987 23,159

Prepaid expenses and other current assets 19,211 57,481

Total current assets 763,847 1,080,043

Long Term Assets:

Property and equipment, net 31,706 35,028

Marketable securities 177,298 540,047

Prepaid expenses and other long-term 9,926 13,290assets

Intangible assets and goodwill, net 37,641 44,135

Operating lease assets 79,249 82,582

Total long-term assets 335,820 715,082

Total assets $ 1,099,667 $ 1,795,125

Liabilities and Shareholder's Equity

Current Liabilities:

Trade payables $ $ 37,687 70,346

Employees and payroll accruals 41,938 74,642

Deferred revenues 289,148 359,761

Accrued expenses and other current 56,464 68,699liabilities

Operating lease liabilities 18,949 19,111

Total current liabilities 444,186 592,559

Long term deferred revenues 21,969 40,780

Long term deferred tax liability 1,585 693

Convertible senior notes 358,715 823,029

Long term loan 1,219 1,219

Long term operating lease liabilities 64,244 69,348

Total long term liabilities 447,732 935,069

Total liabilities 891,918 1,527,628

Shareholders' Equity

Ordinary shares 94 106

Additional paid-in capital 611,083 817,006

Other comprehensive loss 1,357 8,901

Accumulated deficit (404,785) (558,516)

Total shareholders' equity 207,749 267,497

Total liabilities and shareholders' equity $ 1,099,667 $ 1,795,125

Wix.com Ltd.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

OPERATING ACTIVITIES:

Net loss $ $ $ $ (17,367) (56,842) (64,841) (153,731)

Adjustments to reconcile net loss tonet cash used in operatingactivities:

Depreciation 3,194 3,712 8,779 10,821

Amortization 733 826 2,203 1,958

Share based compensation expenses 28,392 38,922 80,864 104,607

Amortization of debt discount and 5,274 7,594 15,585 18,543debt issuance costs

Decrease in accrued interest andexchange rate on short term and long 137 (36) 731 26term deposits

Amortization of premium and discountand accrued interest on marketable (140) 1,222 (99) 1,939securities, net

Deferred income taxes, net (346) (1,696) 187 (3,417)

Changes in operating lease - 3,907 - 13,353right-of-use assets

Changes in operating lease - (3,377) - (13,194)liabilities

Decrease (increase) in trade 2,029 (4,329) (2,503) (5,946)receivables

Increase in prepaid expenses and (1,683) (7,183) (12,824) (28,788)other current and long-term assets

Increase (decrease) in trade 2,278 (3,331) 3,606 31,643payables

Increase in employees and payroll 109 14,014 12,344 37,708accruals

Increase in short term and long term 9,069 26,761 49,302 89,424deferred revenues

Increase in accrued expenses and 4,394 4,350 14,993 14,553other current liabilities

Net cash provided by operating 36,073 24,514 108,327 119,499activities

INVESTING ACTIVITIES:

Proceeds from short-term deposits 164,000 175,000 245,775 201,225and restricted deposits

Investment in short-term deposits (175,000) (309,210) (203,100) (447,210)and restricted deposits

Investment in marketable (127,967) (468,473) (264,583) (698,641)securities

Proceeds from marketable 32,246 45,104 61,302 200,015securities

Purchase of property and (6,712) (4,928) (17,777) (13,135)equipment

Capitalization of software (134) (206) (523) (338)development costs

Investment in other short and - - (700) (5,643)long-term assets

Payment for Businesses acquired - - - (6,626)

Purchases of investments in (262) - (262) (785)privately-held companies

Net cash used in investing (113,829) (562,713) (179,868) (771,138)activities

FINANCING ACTIVITIES:

Proceeds from exercise of options 9,452 9,418 23,642 28,705and ESPP shares

Proceeds from issuance of - 575,000 - 575,000convertible senior notes

Payments of debt issuance costs - (15,713) - (15,713)

Purchase of capped call - (46,000) - (46,000)

Net cash provided by financing 9,452 522,705 23,642 541,992activities

INCREASE (DECREASE) IN CASH AND CASH (68,304) (15,494) (47,899) (109,647)EQUIVALENTS

CASH AND CASH EQUIVALENTS-Beginning 351,462 173,950 331,057 268,103of period

CASH AND CASH EQUIVALENTS-End of $ $ $ $ period 283,158 158,456 283,158 158,456

Wix.com Ltd.

KEY PERFORMANCE METRICS

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

Creative Subscriptions 164,761 202,996 473,137 569,711

Business Solutions 32,030 51,184 83,363 136,515

Total Revenue $ $ $ $ 196,791 254,180 556,500 706,226

Creative Subscriptions 173,571 228,327 520,958 654,820

Business Solutions 32,289 52,614 84,844 140,830

Total Collections $ $ $ $ 205,860 280,941 605,802 795,650

Free Cash Flow $ $ $ $ 29,227 19,380 90,027 106,026

Creative Subscriptions ARR $ $ $ $ 680,377 840,512 680,377 840,512

Number of registered users at 159,543 189,390 159,543 189,390period end (*)

Number of premium subscriptions 4,410 5,309 4,410 5,309at period end (*)

(*) Excludes users andsubscriptions of DeviantArt

Wix.com Ltd.

RECONCILIATION OF REVENUES TO COLLECTIONS

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

Revenues $ $ $ $ 196,791 254,180 556,500 706,226

Change in deferred 9,069 26,761 49,302 89,424revenues

Collections $ $ $ $ 205,860 280,941 605,802 795,650

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

Creative Subscriptions $ $ $ $ Revenue 164,761 202,996 473,137 569,711

Change in deferred 8,810 25,331 47,821 85,109revenues

Creative Subscriptions $ $ $ $ Collections 173,571 228,327 520,958 654,820

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

Business Solutions $ $ $ $ Revenue 32,030 51,184 83,363 136,515

Change in deferred 259 1,430 1,481 4,315revenues

Business Solutions $ $ $ $ Collections 32,289 52,614 84,844 140,830

Wix.com Ltd.

TOTAL ADJUSTMENTS GAAP TO NON-GAAP

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(1) Share based compensation (unaudited) (unaudited)expenses:

Cost of revenues $ $ $ $ 1,525 2,455 4,272 5,955

Research and development 14,886 20,312 41,261 54,713

Selling and marketing 4,590 6,108 13,844 16,071

General and administrative 7,391 10,047 21,487 27,868

Total share based compensation 28,392 38,922 80,864 104,607expenses

(2) Amortization 733 826 2,203 1,958

(3) Acquisition related expenses 564 1,489 617 4,125

(4) Amortization of debt 5,274 7,594 15,585 18,543discount and debt issuance costs

(5) Sales tax accrual and other 3,174 - 3,174 1,489G&A expenses (income)

(6) Non-operating foreign 56 (5) 1,648 427exchange expenses (income)

Total adjustments of GAAP to Non $ $ $ $ GAAP 38,193 48,826 104,091 131,149

Wix.com Ltd.

RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

Gross Profit $ $ $ $ 143,496 174,340 416,828 493,834

Share based compensation 1,525 2,455 4,272 5,955expenses

Acquisition related expenses - 200 - 505

Amortization 142 226 425 226

Non GAAP Gross Profit 145,163 177,221 421,525 500,520

Non GAAP Gross margin 74% 70% 76% 71%

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

Gross Profit - Creative $ $ $ $ Subscriptions 133,219 159,635 385,652 452,450

Share based compensation 1,285 1,947 3,660 4,754expenses

Non GAAP Gross Profit - 134,504 161,582 389,312 457,204Creative Subscriptions

Non GAAP Gross margin - 82% 80% 82% 80%Creative Subscriptions

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

Gross Profit - Business $ $ $ $ Solutions 10,277 14,705 31,176 41,384

Share based compensation 240 508 612 1,201expenses

Acquisition related expenses - 200 - 505

Amortization 142 226 425 226

Non GAAP Gross Profit - 10,659 15,639 32,213 43,316Business Solutions

Non GAAP Gross margin - 33% 31% 39% 32%Business Solutions

Wix.com Ltd.

RECONCILIATION OF OPERATING LOSS TO NON-GAAP OPERATING LOSS

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

Operating loss $ $ $ $ (20,605) (49,740) (62,558) (141,882)

Adjustments:

Share based compensation 28,392 38,922 80,864 104,607expenses

Amortization 733 826 2,203 1,958

Sales tax accrual and other G& 3,174 - 3,174 1,489A expenses (income)

Acquisition related expenses 564 1,489 617 4,125

Total adjustments $ $ $ $ 32,863 41,237 86,858 112,179

$ $ $ $ Non GAAP operating income (loss) 12,258 24,300 (29,703) (8,503)

Wix.com Ltd.

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

(In thousands, except per share data)

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

Net loss $ $ $ $ (17,367) (56,842) (64,841) (153,731)

Share based compensation expense 38,193 48,826 104,091 131,149and other Non GAAP adjustments

$ $ $ $ Non-GAAP net income (loss) 20,826 39,250 (22,582) (8,016)

Basic Non GAAP net income $ $ $ $ (loss) per share 0.41 0.78 (0.42) (0.14)

Weighted average shares used incomputing basic Non GAAP net 50,862,253 55,356,961 50,232,546 53,963,584income (loss) per share

Wix.com Ltd.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

Net cash provided by operating $ $ $ $ activities 36,073 24,514 108,327 119,499

Capital expenditures, net (6,846) (5,134) (18,300) (13,473)

Free Cash Flow $ $ $ $ 29,227 19,380 90,027 106,026

Capex related to future Wix HQ office - 779 - 1,670build-out

Free Cash Flow, excluding capex $ $ $ $ related to future Wix HQ office 29,227 20,159 90,027 107,696build-out

Wix.com Ltd.

RECONCILIATION OF BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND THEDILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING

Three Months Ended Nine Months Ended

September 30, September 30,

2019 2020 2019 2020

(unaudited) (unaudited)

Basic and diluted weighted average number of shares outstanding 50,862,253 55,356,961 50,232,546 53,963,584

The following items have been excluded from the diluted weighted average numberof sharesoutstanding because they are anti-dilutive:

Stock options 7,571,765 4,741,271 7,571,765 4,741,271

Restricted share units 2,231,470 2,109,920 2,231,470 2,109,920

Convertible Notes (if-converted) 3,104,251 4,428,999 3,104,251 4,428,999

63,769,739 66,637,151 63,140,032 65,243,774

Wix.com Ltd.

RECONCILIATION OF PROJECTED REVENUES TO PROJECTED COLLECTIONS

(In thousands)

Three Months Ended Year Ended

December 31, 2020 December 31, 2020

Low High Low High

Projected revenues 266,000 271,000 972,000 977,000

Projected change in 29,000 34,000 118,000 123,000deferred revenues

Projected Collections $ $ $ $ 295,000 305,000 1,090,000 1,100,000

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SOURCE Wix.com Ltd.