Wix.com Reports Fourth Quarter and Full Year 2014 Results

-- Fourth quarter Collections increased to $49.3 million, representing 61% year-over-year growth on a reported basis and 66% year-over-year growth on a constant currency basis --

-- Revenues in the fourth quarter increased to $41.6 million, representing 67% year-over-year growth --

-- Premium Subscriptions grew 56% year-over-year to 1,233,000 at year end --

TEL AVIV, Israel, Feb. 11, 2015 (GLOBE NEWSWIRE) -- Wix.com Ltd. (Nasdaq:WIX), a leading global web development platform, today reported financial results for the fourth quarter and full year ended December 31, 2014. The Company also introduced its financial outlook for 2015.

"We concluded 2014 with a strong quarter and tremendous growth that once again surpassed our guidance," said Avishai Abrahami, CEO and Co-founder of Wix. "The year was highlighted by the introduction of dynamic new products, important new technologies and new partnerships that deepen our offering and expand our reach. 2015 is going to be an exciting year for Wix. We started it with a record breaking Super Bowl campaign, and we will continue to roll out what we believe will be significant and game changing developments, features and capabilities in the months to come. Our plans feed directly into our mission to provide an easy and affordable platform to create, manage and grow a business online."

CFO Lior Shemesh added, "We made significant investments in 2014 in R&D and marketing, growing our technical and engineering teams, extending our leadership position through technology innovation and growing our subscription base. We continue to realize operating leverage in our financial results, and we are excited about our prospects for 2015 as reflected in our financial outlook."

Fourth Quarter Results and Highlights

• Collections increased 61% to $49.3 million compared to $30.6 million for the fourth quarter of 2013. Excluding the impact of year-over-year changes in foreign exchange rates, collections would have been $50.6 million, an increase of 66% versus the prior year
• Revenues increased 67% to $41.6 million compared to $24.9 million for the fourth quarter of 2013
• Net loss was $15.1 million, or $0.39 per share, compared to a net loss of $10.9 million, or $0.45 per share, for the fourth quarter of 2013. Non-GAAP net loss was $9.6 million, or $0.25 per share, compared to a non-GAAP net loss of $7.0 million, or $0.29 per share, for the fourth quarter of 2013
• New adjusted EBITDA, which includes changes in deferred revenue and changes in prepaid domain registration costs, was $(1.3) million compared to $(0.7) million for the fourth quarter of 2013
• Prior adjusted EBITDA was $(9.0) million compared to $(5.8) million for the fourth quarter of 2013. Moving forward and as previously discussed, the company will only report and provide its financial outlook for new adjusted EBITDA
• Free cash flow was $0.1 million compared to $1.0 million for the fourth quarter of 2013
• Added approximately 108,000 net premium subscriptions in the period to reach approximately 1,233,000 as of December 31, 2014, a 56% increase from approximately 790,000 premium subscriptions as of December 31, 2013 and a 10% increase from approximately 1,125,000 as of September 30, 2014
• Added over 3.8 million new registered users to reach approximately 57.9 million as of December 31, 2014, a 38% increase compared to approximately 42.1 million registered users as of December 31, 2013 and a 7% increase from approximately 54.1 million as of September 30, 2014

Full Year 2014 Results and Highlights

• Collections increased 74% to $171.3 million compared to $98.7 million for the full year 2013
• Revenues increased 76% to $141.8 million compared to $80.5 million for the full year 2013
• Net loss was $56.6 million, or $1.49 per share, compared to a net loss of $28.7 million, or $3.33 per share, for the full year 2013. Non-GAAP net loss was $40.2 million, or $1.06 per share, compared to non-GAAP net loss of $21.0 million, or $2.64 per share, for the full year 2013
• New adjusted EBITDA, which includes changes in deferred revenue and changes in prepaid domain registration costs, was $(11.3) million compared to $(1.9) million for 2013
• Prior adjusted EBITDA was $(38.5) million compared to $(18.2) million for 2013. Moving forward and as previously discussed, the company will only report and provide its financial outlook for new adjusted EBITDA
• Free cash flow was $(6.4) million compared to $1.2 million for the full year 2013

Business Highlights

• Bigstock Partnership: The Company announced that it is partnering with Bigstock, a division of Shutterstock, to provide Wix users with seamless access though the Wix Editor to Bigstock's marketplace of over 21 million photos, videos, vectors and illustrations. This partnership enables Wix users to add affordable, accessible and high-quality images to enrich their websites
• Microsoft: Wix announced a partnership with Microsoft in which subscribers to Office 365 will have the ability to select Wix.com to create and launch their online presence directly from within the Office 365 platform
• Shoutout App: Wix launched a mobile application for Wix ShoutOut. Already a popular service with Wix users, the Wix ShoutOut app now enables them to create and send beautiful newsletters, notes or announcements on the go. The Wix ShoutOut app is currently available in the Apple App store and will also be offered in Google Play
• Super Bowl campaign: Wix launched in early January its #ItsThatEasy campaign built around the Company's first ever Super Bowl commercial. The 30-second spot was the catalyst for a cross-platform branding campaign which included the gradual release of tailored content online and through social platforms. The TV spot is estimated to have been viewed by over 120 million people, with the web content providing tens of millions in additional views
• Wix App Market: Users continue to add tools and functionality to their site from among the 250 apps available in the Wix App Market. In the fourth quarter, an average of over 37,500 apps were installed per day
• Wix Mobile: Wix continues to be among the global leaders in mobile web development with over 6.2 million mobile sites created on the Wix platform to date

Financial Outlook

The company is introducing its outlook for full year 2015 and first quarter 2015 as follows:

• For the full year 2015:
  • Collections are expected to be in the range of $235 million to $242 million, representing year-over-year growth of 37% to 41% in reported terms and $245 million to $252 million, or 42% to 47% year-over-year growth excluding the impact of year-over-year changes in foreign exchange rates
  • Revenues are expected to be in the range of $198 million to $202 million, representing year-over-year growth of 40% to 42%
  • Adjusted EBITDA is expected to be in the range of $2 million to $5 million
• For the first quarter of 2015:
  • Collections are expected to be in the range of $52 million to $53 million, representing year-over-year growth of 39% to 41% in reported terms and $54 million to $55 million or 44% to 47% excluding the impact of year-over-year changes in foreign exchange rates
  • Revenues are expected to be in the range of $43 million to $44 million, representing year-over-year growth of 49% to 53%
  • Adjusted EBITDA is expected to be in the range of $(3) million to $(4) million

Conference Call and Webcast Information

Wix.com's fourth quarter and full year 2014 teleconference and webcast is scheduled to begin at 8:30 a.m. ET on Wednesday, February 11, 2015. To participate on the live call, analysts and investors should dial 855-420-0618 (US/Canada) or 484-365-2934 (International) at least ten minutes prior to the start time of the call. A telephonic replay of the call will be available through February 18, 2015 by dialing 855-859-2056 (US/Canada) or 404-537-3406 (International) and providing Conference ID: 72030767. 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 http://investors.wix.com/.

About Wix.com Ltd.

Wix.com is a leading cloud-based web development platform with over 59 million registered users worldwide, as of December 31, 2014. Wix 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, professionals and individuals to take their businesses, brands and workflow online. The Wix Editor and highly curated App Market enable users to build and manage a fully integrated and dynamic digital presence. Wix's headquarters are in Tel Aviv with offices in San Francisco, New York, Vilnius and Dnepropetrovsk.

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, adjusted EBITDA, free cash flow, non-GAAP net loss and non-GAAP net loss per share (collectively the "non-GAAP financial measures"). Collections represents 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. New Adjusted EBITDA represents earnings before interest, bank charges and other financial income and expenses, net; unrealized gains or losses on certain hedging transactions; income tax; depreciation and amortization and further eliminates the effect of share-based compensation expense, changes in deferred revenue and prepaid domain registration costs and other unusual or non-recurring expenses. Prior Adjusted EBITDA, which is presented for comparison, is the same except that it does not adjust for changes in deferred revenue, prepaid domain registration costs and realized gains and losses on certain hedging transactions. Free cash flow represents cash flow from operating activities minus capital expenditures. Non-GAAP net loss represents net loss calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense and other non-GAAP adjustments. Non-GAAP net loss per share represents non-GAAP net loss divided by the weighted average number of shares used in computing GAAP loss per share.

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 they 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 of GAAP to Non-GAAP Financial Measures" table in this press release. This accompanying table has 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 adjusted EBITDA guidance to net profit because it does not provide guidance for net profit. As items that impact net profit are out of the company's control and/or cannot be reasonably predicted, the company is unable to provide such guidance. Accordingly, a reconciliation to net profit is not available without unreasonable effort.

Forward-Looking Statements

This press release 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 and may be identified by words like "anticipate," "assume," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "future," "will," "seek" and similar terms or phrases. The forward-looking statements contained in this press release 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; our ability to maintain and enhance our brand and reputation; our ability to manage the growth of our infrastructure effectively; changes to technologies used in our solutions or in global, national, regional or local economic, business, competitive, market, regulatory and other factors discussed under the heading "Risk Factors" in the company's annual report on Form 20-F filed with the Securities and Exchange Commission on March 30, 2014. 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.