PR Newswire | Nov 11, 2021 01:00AM EST

11/11 00:00 CST

Wix Reports Third Quarter 2021 Results- Collections and revenue growth exceeded expectations as key growth drivers outperformed amidst an improving business environment-- Q3'21 Revenue of $321 million, up 26% y/y-- Q3'21 Collections of $373 million, up 33% y/y- Increasing number of businesses are relying on Wix as their full operating system-- Business Solutions Revenue and Collections up 55% y/y and 53% y/y, respectively- B2B partnerships emerging as an incremental sustainable go-to-market strategy and growth driver as companies turn to Wix to deliver technology solutions and add value to their users- Increasing full year outlook for revenue and collections due to confidence in recent improvements NEW YORK, Nov. 11, 2021

NEW YORK, Nov. 11, 2021 /PRNewswire/ -- Wix.com Ltd. (Nasdaq: WIX) today reported financial results for the third quarter ended September 30, 2021, highlighted by revenue and collections results ahead of expectations. In addition, the Company provided its initial outlook for the fourth quarter and raised its revenue and collections outlook for the full year. Please visit the Wix investor relations website at https://investors.wix.com/ to view the Q3'21 Shareholder Update.

"Our business outperformed our expectations this quarter as we saw improvements in the business environment. Our users are still navigating a great deal of uncertainty, but we believe the impacts have lessened. Despite this volatility, we delivered outstanding results." said Avishai Abrahami, Co-founder and CEO of Wix. "We continue to layer on new monetization opportunities, and I have never been more excited about what we have coming down the pipeline."

Nir Zohar, President and COO of Wix, also added, "This quarter we recorded collections from several new B2B partnerships, most notably the technology alliance with Vistaprint that we announced in August. Companies like Vistaprint are approaching us because they know that our brand and technology platform can bring massive value to their users. We believe these B2B partnerships will deliver sustainable growth over many years to come due to the ongoing financial benefits of renewals, additional new subscriptions above and beyond the agreement, and business solutions such as Ascend or Wix Payments."

Lior Shemesh, CFO of Wix, added, "Outperformance this quarter was driven by better than expected new user additions, conversion of new users to subscriptions and average collections per subscription. We are increasing our revenue and collections guidance for FY 2021 to reflect the improvements we are experiencing."

Q3'21 Financial Results

* Total revenue in the third quarter of 2021 was $320.8 million, up 26% y/y * Creative Subscriptions revenue in the third quarter of 2021 was $241.3 million, up 19% y/y * Business Solutions revenue in the third quarter of 2021 was $79.5 million, up 55% y/y

* Creative Subscriptions ARR as of the end of the third quarter of 2021 was $992.3 million, up 18% y/y * Total collections in the third quarter of 2021 were $373.3 million, up 33% y/y * Creative Subscriptions collections in the third quarter of 2021 were $292.7 million, up 28% y/y * Business Solutions collections in the third quarter of 2021 were $80.6 million, up 53% y/y

* Total gross margin on a GAAP basis in the third quarter of 2021 was 62% * Creative Subscriptions gross margin on a GAAP basis was 76% * Business Solutions gross margin on a GAAP basis was 19%

* Total non-GAAP gross margin in the third quarter of 2021 was 63% * Creative Subscriptions gross margin on a non-GAAP basis was 77% * Business Solutions gross margin on a non-GAAP basis was 21%

* GAAP net income in the third quarter of 2021 was $16.7 million, or $0.28 per fully diluted share outstanding * Includes $112.2 million from realized and unrealized net gains in equity holdings, primarily attributable to our holdings in monday.com

* Non-GAAP net loss in the third quarter of 2021 was $(11.9) million, or $(0.21) per share * Net cash provided by operating activities for the third quarter of 2021 was $4.3 million, while capital expenditures totaled $13.0 million, leading to free cash flow of $(8.7) million * Excluding the capex investment associated with our new headquarters office build out, free cash flow would have been $1.7 million

Financial Outlook

Due to the improvements we have experienced, we are increasing our collections and revenue guidance for FY 2021.

We are also increasing our investment in marketing in Q4 due to the business improvements we have experienced. This increase in our investment in marketing is a positive sign -- we are still experiencing the same returns in accordance with our TROI thresholds, but we are able to increase our investment as the top of the funnel increases. In addition, the US dollar to Israeli Shekel exchange rate has become a more significant headwind to our operating expenses. For these reasons, we are reducing our FCF guidance for the full year.

We are introducing fourth quarter 2021 guidance as follows:

Q4'21 Outlook Y/Y growth

Revenue $324 - 333 million15 - 18%

Collections$348 - 372 million14 - 21%

We are updating our full year 2021 guidance as follows:

Updated FY 2021 Y/Y growthPrior FY 2021 Outlook Outlook

Revenue $1,265 - 1,274 28 - 29% $1,255 - 1,270 million million

Collections $1,415 - 1,439 28 - 31% $1,400 - 1,435 million million

Free Cash Flow $45 - 50 million NM $60 - 65 million (excluding capex for future Wix HQ office build out)

Free Cash Flow $22 - 27 million NM $35 - 40 million

Conference Call and Webcast Information

Wix will host a conference call to discuss the results at 8:30 a.m. ET on Thursday, November 11, 2021. 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) and reference Conference ID 9696333. A telephonic replay of the call will be available through November 18, 2021 at 11:30 a.m. ET by dialing +1-855-859-2056 and providing Conference ID 9696333.

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 215 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 curated App Market, Ascend by Wix and Velo 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, Kyiv, Krakw, Los Angeles, Miami, New York, Phoenix, 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 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: collections, cumulative cohort collections, 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, 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. Collections is a non-GAAP financial measure calculated by adding the change in deferred revenues for a particular period to revenues for the same period. Collections include cash receipts for premium subscriptions purchased by registered users as well as cash we collect for payments and additional products and services, 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 a majority of the additional products and services are recognised as revenues upon receipt. Committed payments are recognised as revenue as we fulfil 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) and unrealized gain on equity investments and provisions for income tax effects related to non-GAAP adjustments. 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. 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 ameans 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.

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; (ii) the average revenue per month from domain registrations; (iii) monthly revenue from partnership agreements. Finally, Wix discusses GPV. GPV includes the total value, in US dollars, of transactions facilitated by our platform.

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 annual and quarterly 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 attract and retain registered users and generate new premium subscriptions; our ability 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, including third-party products offered within our platform, will receive customer acceptance and satisfaction, including the growth in market adoption of our online commerce solutions; our assumption that long-term agreements with partners will become a more significant part of our business in the future and that the expected accounts receivable from such long term partners agreement will ultimately be received; our assumption that historical user behavior can be extrapolated to predict future user behavior; our prediction of the future revenues generated by our user cohorts and our ability to maintain and increase such revenue growth; our ability to maintain and enhance our brand and reputation; our ability to attract and retain qualified employees and key personnel; our ability to enter into new markets and attract new customer demographics, including new partners; our expectation that our products created for markets outside of North America will continue to generate growth in those markets; the impact of fluctuations in foreign currency exchange rates on our business; our ability to 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; the integration and performance of acquisitions; risks relating to the repurchase of our ordinary shares and/or Convertible Notes pursuant to our repurchase plan; our ability 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 ability to effectively manage the growth of our infrastructure; 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 and the anticipated GPV on our platform, the effectiveness of government policies, vaccine administration rates and other factors; changes to technologies used in our solutions; any regulatory investigations or litigation; our expectations regarding changes in our cost of revenues and our operating expenses on an absolute basis and as a percentage of our revenues; changes in the global, national, regional or local economic, business, competitive, market, and regulatory landscape, including as a result of COVID-19; 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 other factors discussed under the heading "Risk Factors" in the Company's 2020 annual report on Form 20-F filed with the Securities and Exchange Commission on March 25, 2021. 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.com

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,

2020 2021 2020 2021

(unaudited) (unaudited)

Revenue

Creative Subscriptions $ 202,996 $ 241,303 $ 569,711 $ 703,630

Business Solutions 51,184 79,494 136,515 237,685

254,180 320,797 706,226 941,315

Cost of Revenue

Creative Subscriptions 43,361 57,813 117,261 171,830

Business Solutions 36,479 64,716 95,131 187,950

79,840 122,529 212,392 359,780

Gross Profit 174,340 198,268 493,834 581,535

Operating expenses:

Research and development 84,473 109,323 230,653 308,608

Selling and marketing 113,092 119,991 328,581 387,467

General and administrative 26,515 38,917 76,482 112,722

Total operating expenses 224,080 268,231 635,716 808,797

Operating loss (49,740) (69,963) (141,882) (227,262)

Financial income (expenses), net (7,298) 111,917 (9,492) 288,811

Other income 25 87 84 193

Income (loss) before taxes on income (57,013) 42,041 (151,290) 61,742

Taxes on income (171) 25,374 2,441 67,932

Net income (loss) $ (56,842) $ 16,667 $ (153,731) $ (6,190)

Basic net income (loss) per share $ (1.03) $ 0.29 $ (2.85) $ (0.11)

Basic weighted-average shares used to compute net income (loss) per share 55,356,961 57,313,747 53,963,584 56,970,641

Diluted net income (loss) per share $ (1.03) $ 0.28 $ (2.85) $ (0.11)

Diluted weighted-average shares used to compute net income (loss) per share 55,356,961 60,549,853 53,963,584 56,970,641

Wix.com Ltd.

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

Period ended

December 31, September 30,

2020 2021

Assets (audited) (unaudited)

Current Assets:

Cash and cash equivalents $ $ 168,858 287,167

Short term deposits 577,138 541,324

Restricted cash and deposit 925 6,960

Marketable securities 289,927 417,136

Trade receivables 23,670 27,988

Prepaid expenses and other current assets 40,666 36,373

Total current assets 1,101,184 1,316,948

Long Term Assets:

Property and equipment, net 35,863 53,414

Marketable securities 536,877 470,148

Prepaid expenses and other long-term assets 87,680 23,922

Intangible assets and goodwill, net 43,516 89,975

Operating lease right-of-use assets 88,406 100,728

Total long-term assets 792,342 738,187

Total assets $ $ 1,893,526 2,055,135

Liabilities and Shareholder's Equity

Current Liabilities:

Trade payables $ $ 79,881 89,330

Employees and payroll accruals 70,814 76,379

Deferred revenues 373,521 436,306

Accrued expenses and other current liabilities 70,429 87,499

Operating lease liabilities 22,336 30,849

Total current liabilities 616,981 720,363

Long term deferred revenues 50,867 60,336

Long term deferred tax liability 15,343 79,718

Convertible notes, net 834,440 921,676

Long term operating lease liabilities 74,187 77,288

Total long term liabilities 974,837 1,139,018

Total liabilities 1,591,818 1,859,381

Shareholders' Equity

Ordinary shares 107 110

Additional paid-in capital 862,134 916,966

Treasury Stock - (199,997)

Accumulated other comprehensive income 9,406 1,277

Accumulated deficit (569,939) (522,602)

Total shareholders' equity 301,708 195,754

Total liabilities and shareholders' equity $ $ 1,893,526 2,055,135

Wix.com Ltd.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2021 2020 2021

(unaudited) (unaudited)

OPERATING ACTIVITIES:

Net loss $ (56,842) $ 16,667 $ (153,731) $ (6,190)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation 3,712 3,595 10,821 10,405

Amortization 826 3,045 1,958 4,490

Share based compensation expenses 38,922 53,070 104,607 150,097

Amortization of debt discount and debt issuance costs 7,594 1,297 18,543 4,000

Decrease (increase) in accrued interest and exchange rate on short term and (36) (57) 26 (105)long term deposits

Amortization of premium and discount and accrued interest on marketable 1,222 1,796 1,939 6,201securities, net

Gain on equity securities - (110,855) - (184,041)

Deferred income taxes, net (1,696) 21,111 (3,417) 61,214

Changes in operating lease right-of-use assets 3,907 5,907 13,353 18,967

Changes in operating lease liabilities (3,377) (6,062) (13,194) (19,675)

Decrease (increase) in trade receivables (4,329) 1,430 (5,946) (3,871)

Increase in prepaid expenses and other current and long-term assets (7,183) (652) (28,788) (101,497)

Increase (decrease) in trade payables (3,331) 6,727 31,643 5,699

Increase (decrease) in employees and payroll accruals 14,014 (628) 37,708 12,519

Increase in short term and long term deferred revenues 26,761 5,336 89,424 70,768

Increase in accrued expenses and other current liabilities 4,350 2,596 14,553 15,663

Net cash provided by operating activities 24,514 4,323 119,499 44,644

INVESTING ACTIVITIES:

Proceeds from short-term deposits and restricted deposits 175,000 269,000 201,225 447,015

Investment in short-term deposits and restricted deposits (309,210) (245,000) (447,210) (417,131)

Investment in marketable securities (468,473) - (698,641) -

Proceeds from marketable securities 45,104 80,909 200,015 261,568

Purchase of property and equipment (4,928) (12,604) (13,135) (22,981)

Capitalization of software development costs (206) (426) (338) (1,017)

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

Proceeds from equity securities - 18,771 - 18,771

Payment for Businesses acquired, net of acquired cash - 189 (6,626) (42,614)

Purchases of investments in privately held companies - (2,000) (785) (3,500)

Net cash used in investing activities (562,713) 108,839 (771,138) 240,111

FINANCING ACTIVITIES:

Proceeds from exercise of options and ESPP shares 9,418 11,752 28,705 33,554

Purchase of treasury stock - (200,000) - (200,000)

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

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

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

Net cash provided by financing activities 522,705 (188,248) 541,992 (166,446)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (15,494) (75,086) (109,647) 118,309

CASH AND CASH EQUIVALENTS-Beginning of period 173,950 362,253 268,103 168,858

CASH AND CASH EQUIVALENTS-End of period $ 158,456 $ 287,167 $ 158,456 $ 287,167

Wix.com Ltd.

KEY PERFORMANCE METRICS

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2021 2020 2021

(unaudited) (unaudited)

Creative Subscriptions 202,996 241,303 569,711 703,630

Business Solutions 51,184 79,494 136,515 237,685

Total Revenue $ 254,180 $ 320,797 $ 706,226 $ 941,315

Creative Subscriptions 228,327 292,737 654,820 823,841

Business Solutions 52,614 80,560 140,830 243,426

Total Collections $ 280,941 $ 373,297 $ 795,650 $ 1,067,267

Free Cash Flow $ 19,380 $ (8,707) $ 106,026 $ 20,646

Free Cash Flow, excluding capex related to future Wix HQ office build-out $ 20,159 $ 1,663 $ 107,696 $ 34,048

Creative Subscriptions ARR $ 840,512 $ 992,295 840,512 992,295

Wix.com Ltd.

RECONCILIATION OF REVENUES TO COLLECTIONS

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2021 2020 2021

(unaudited) (unaudited)

Revenues $ 254,180 $ 320,797 $ 706,226 $ 941,315

Change in deferred revenues 26,761 5,336 89,424 70,768

Change in unbilled contractual obligations - 47,164 - 55,184

Collections $ 280,941 $ 373,297 $ 795,650 $ 1,067,267

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2021 2020 2021

(unaudited) (unaudited)

Creative Subscriptions Revenue $ 202,996 $ 241,303 $ 569,711 $ 703,630

Change in deferred revenues 25,331 4,270 85,109 65,027

Change in unbilled contractual obligations - 47,164 - 55,184

Creative Subscriptions Collections $ 228,327 $ 292,737 $ 654,820 $ 823,841

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2021 2020 2021

(unaudited) (unaudited)

Business Solutions Revenue $ 51,184 $ 79,494 $ 136,515 $ 237,685

Change in deferred revenues 1,430 1,066 4,315 5,741

Business Solutions Collections $ 52,614 $ 80,560 $ 140,830 $ 243,426

Wix.com Ltd.

RECONCILIATION OF COHORT COLLECTIONS

(In millions)

Nine Months Ended

September 30,

2020 2021

Q1 Cohort revenues 31 39

Q1 Change in deferred revenues 19 21

Q1 Cohort collections $ 50 $ 60

Wix.com Ltd.

TOTAL ADJUSTMENTS GAAP TO NON-GAAP

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2021 2020 2021

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

Cost of revenues $ 2,455 $ 4,057 $ 5,955 $ 11,367

Research and development 20,312 26,250 54,713 74,028

Selling and marketing 6,108 8,715 16,071 24,370

General and administrative 10,047 14,048 27,868 40,332

Total share based compensation expenses 38,922 53,070 104,607 150,097

(2) Amortization 826 3,045 1,958 4,490

(3) Acquisition related expenses 1,489 2,579 4,125 6,635

(4) Amortization of debt discount and debt issuance costs 7,594 1,297 18,543 4,000

(5) Sales tax accrual and other G&A expenses (income) - 341 1,489 1,372

(6) Unrealized gain on equity and other investments - (112,165) - (284,026)

(7) Non-operating foreign exchange expenses (income) (5) 1,745 427 4,698

(8) Provision for income tax effects related to non-GAAP adjustments - 21,480 - 61,008

Total adjustments of GAAP to Non GAAP $ 48,826 $ (28,608) $ 131,149 $ (51,726)

Wix.com Ltd.

RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2021 2020 2021

(unaudited) (unaudited)

Gross Profit $ 174,340 $ 198,268 $ 493,834 $ 581,535

Share based compensation expenses 2,455 4,057 5,955 11,367

Acquisition related expenses 200 108 505 387

Amortization 226 930 226 1,385

Non GAAP Gross Profit 177,221 203,363 500,520 594,674

Non GAAP Gross margin 70% 63% 71% 63%

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2021 2020 2021

(unaudited) (unaudited)

Gross Profit - Creative Subscriptions $ 159,635 $ 183,490 $ 452,450 $ 531,800

Share based compensation expenses 1,947 2,947 4,754 8,420

Non GAAP Gross Profit - Creative Subscriptions 161,582 186,437 457,204 540,220

Non GAAP Gross margin - Creative Subscriptions 80% 77% 80% 77%

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2021 2020 2021

(unaudited) (unaudited)

Gross Profit - Business Solutions $ 14,705 $ 14,778 $ 41,384 $ 49,735

Share based compensation expenses 508 1,110 1,201 2,947

Acquisition related expenses 200 108 505 387

Amortization 226 930 226 1,385

Non GAAP Gross Profit - Business Solutions 15,639 16,926 43,316 54,454

Non GAAP Gross margin - Business Solutions 31% 21% 32% 23%

Wix.com Ltd.

RECONCILIATION OF OPERATING LOSS TO NON-GAAP OPERATING LOSS

(In thousands)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2021 2020 2021

(unaudited) (unaudited)

Operating loss $ (49,740) $ (69,963) $ (141,882) $ (227,262)

Adjustments:

Share based compensation expenses 38,922 53,070 104,607 150,097

Amortization 826 3,045 1,958 4,490

Sales tax accrual and other G&A expenses (income) - 341 1,489 1,372

Acquisition related expenses 1,489 2,579 4,125 6,635

Total adjustments $ 41,237 $ 59,035 $ 112,179 $ 162,594

Non GAAP operating income (loss) $ (8,503) $ (10,928) $ (29,703) $ (64,668)

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,

2020 2021 2020 2021

(unaudited) (unaudited)

Net loss $ (56,842) $ 16,667 $ (153,731) $ (6,190)

Share based compensation expense and other Non GAAP adjustments 48,826 (28,608) 131,149 (51,726)

Non-GAAP net income (loss) $ (8,016) $ (11,941) $ (22,582) $ (57,916)

Basic Non GAAP net income (loss) per share $ (0.14) $ (0.21) $ (0.42) $ (1.02)

Weighted average shares used in computing basic Non GAAP net income (loss) per 55,356,961 57,313,747 53,963,584 56,970,641share

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,

2020 2021 2020 2021

(unaudited) (unaudited)

Net cash provided by operating activities $ 24,514 $ 4,323 $ 119,499 $ 44,644

Capital expenditures, net (5,134) (13,030) (13,473) (23,998)

Free Cash Flow $ 19,380 $ (8,707) $ 106,026 $ 20,646

Capex related to future Wix HQ office build-out 779 10,370 1,670 13,402

Free Cash Flow, excluding capex related to future Wix HQ office build-out $ 20,159 $ 1,663 $ 107,696 $ 34,048

Wix.com Ltd.

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

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2021 2020 2021

(unaudited) (unaudited)

Basic weighted-average shares used to compute net income (loss) per share 55,356,961 57,313,747 53,963,584 56,970,641

Effect of dilutive securities (included in the effect of dilutive securities isthe assumed - 3,236,106 - -conversion of employee stock options, employee RSUs and the Notes)

Diluted weighted-average shares used to compute net income (loss) per share 55,356,961 60,549,853 53,963,584 56,970,641

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

Stock options 4,741,271 672,240 4,741,271 4,699,390

Restricted share units 2,109,920 675,134 2,109,920 1,921,287

Convertible Notes (if-converted) 4,530,284 3,969,514 4,530,284 3,969,514

66,738,436 65,866,741 65,345,059 67,560,832

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SOURCE Wix.com Ltd.