Wix Reports First Quarter 2020 Results
NEW YORK, May 14, 2020 /PRNewswire/ -- Wix.com Ltd. (Nasdaq: WIX) today reported strong financial results for the first quarter ended March 31, 2020. In addition, the Company provided its initial outlook for the second quarter 2020.
"The current crisis has magnified the importance of having an online presence like never before, and we are very fortunate to offer a product that provides businesses, brands and individuals an opportunity to build and grow despite the increasing hardships that they are facing," said Avishai Abrahami, Co-founder and CEO of Wix. "As demand for an online presence increases, we remain focused on providing best-in-class free and paid products and delivering improvements to our offering in response to our users' needs."
Abrahami continued, "The COVID-19 crisis has forced a massive change upon our users. The need for SMBs, entrepreneurs and brands to move online quickly, to communicate with their customers and to deliver goods and services has never been clearer. Demand for our platform offerings boomed at the beginning of April, and I am extremely proud to say that our team responded quickly to make sure we can deliver the best service to our users across the globe."
Nir Zohar, President and COO of Wix added, "The changes we have seen in the market, starting at the end of Q1, have demonstrated the strength, adaptability and resilience of our business. It is easy to think of SMBs as particularly vulnerable to change and crises, but when it comes down to it, we see that entrepreneurs and business owners will do everything in their power to adapt and keep their business going. It is gratifying for us to offer them a platform on which they can expand their business, or even completely reinvent themselves online, so they can continue running their businesses and supporting their families."
Lior Shemesh, CFO of Wix said, "As data from April shows, our business has remained steadfast, even as this pandemic has shut down most of the world. The strong performance from recent cohorts, combined with the boost in demand for our platform, has convinced us to double down on what we do best - using the strength of our balance sheet to invest in marketing to grow our business even further. We believe combining this incremental investment with the increasing demand will allow us to make faster headway in capturing more market share." Shemesh continued, "This immense demand uplift, coupled with the marketing investment to support it, has already driven us to a significantly higher outlook for Q2 than we originally expected. We expect collections growth of 28-30% y/y in the second quarter."
Business Update as of April 2020
Q1 2020 Financial Results
Recent Business Highlights
Wix is introducing its outlook for the second quarter 2020. The rapid acceleration of businesses moving online causes Q2 to be well ahead of what was originally expected when full year guidance was provided in February:
COVID-19 has accelerated a huge shift of businesses that rely on an online presence as the anchor of their activity. As we look ahead, we are considering multiple aspects of this transformation:
This change in behavior is creating a vast tailwind for our business. Our second quarter guidance reflects this rapid acceleration.
In addition, we expect the second half of 2020 may be very different from what we originally anticipated when we provided full year 2020 guidance in February. We are obviously experiencing changes that are positive to our current state of growth; however, at this stage we have no way to estimate the longevity of these changes, what else may change or what will stay the same.
We do strongly believe that we have seen a paradigm shift as the speed of businesses moving online has dramatically increased - what changes may have taken many years are now happening in months. We believe these changes will continue and business will not return to the way it was before.
In light of these rapid changes and the new opportunities they present, we believe it is imprudent for us to provide a financial outlook for the second half of 2020 at this time. We plan to adapt our business quickly as the environment changes, and as of today, the range of outcomes is too great to provide an update beyond Q2. We are withdrawing our prior full year guidance and plan to provide an update in our Q2 earnings release in July 2020.
Conference Call and Webcast Information
Wix will host a conference call at 8:30 a.m. ET on Thursday, May 14, 2020 to answer questions about the financial and operational performance of the business for the first quarter ended March 31, 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 8883387. A telephonic replay of the call will be available through May 21, 2020 at 11:30 a.m. ET by dialing +1-855-859-2056 and providing Conference ID 8883387.
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.
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, Wix uses the following non-GAAP financial measures: collections, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP net income (loss) per share and free cash flow (collectively the "Non-GAAP financial measures"). 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 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 per share represents non-GAAP net income (loss) divided by the weighted average number of shares used in computing GAAP loss per share. Free cash flow represents net cash provided by (used in) operating activities less capital expenditures.
The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that these measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.
For more information on the non-GAAP financial measures, please see the reconciliation 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 has not reconciled its free cash flow guidance to net cash provided by operating activities because net cash provided by operating activities is not accessible on a forward-looking basis. Items that impact net cash provided by operating activities are out of the Company's control and/or cannot be reasonably predicted. Accordingly, a reconciliation to net cash provided by operating activities is not available without unreasonable effort.
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 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; the 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 and our ability to predict future financial results due to the global and regional impact of COVID-19, 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 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.
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SOURCE Wix.com Ltd.
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