Wix.com Reports Third Quarter 2015 Results

Exceeds Outlook on Collections on a Constant Currency Basis, Revenue and Adjusted EBITDA; Sequential Growth in Net Premium Subscription Additions, Gross Margin and Free Cash Flow

• Collections Increase of 47% Year-Over-Year on a Constant Currency Basis, Exceeding Prior Outlook; Non-GAAP Gross Margin Increases over Prior Quarter to 84%—

• Adjusted EBITDA of $4.7 million, a Quarter-Over-Quarter Increase of 34%, Exceeds Prior Outlook; Increasing Full Year Outlook —

• Added 140,000 Net Premium Subscriptions, the Largest Quarterly Net Increase in the Company’s History, for a Total of Over 1.6 million

 — Investment in R&D Paying Off: New Wix Editor Successfully Launched and Improving Conversion of New Users —

TEL AVIV, Israel, Nov. 4, 2015  — Wix.com Ltd. (Nasdaq:WIX), a leading global web development platform, today reported financial results for the third quarter ended September 30, 2015.

“The third quarter was our strongest ever highlighted by record additions in net premium subscriptions of 140,000. This growth represents our largest quarterly increase ever, greatly increasing the value of our cohorts,” said Avishai Abrahami, CEO and Co-founder of Wix.

“We also extended our position as the leading innovator in the market with the launch of a completely re-imagined and redesigned Wix Editor. The new Wix Editor delivers industry first features, interfaces and capabilities to our users to seamlessly create, manage and grow their business online. Since launch, initial results show an increase of 15% to 20% in the conversion of new users to premium subscriptions, proving that the investments we have made in R&D are paying off.”

Lior Shemesh, CFO of Wix, commented, “Our third quarter results reflect strong collections and revenue growth, improved gross margin and increased profitability as highlighted by gains in adjusted EBITDA and free cash flow. A decline in exchange rates between the US Dollar and the Brazilian Real and Russian Ruble in the third quarter, while partially offset by financial gains through hedging activity, impacted our reported top line results. Excluding this impact, we exceeded our outlook for collections and revenue this quarter. We also continue to expand our profitability beyond our prior outlook on the strength of and inherent leverage in our freemium business model.”

Third Quarter 2015 Results and Highlights

Collections on a reported basis increased 38% to $61.6 million compared to $44.6 million for the third quarter of 2014

Excluding the impact of year-over-year changes in foreign exchange rates, collections would have been $65.7 million, an increase of 47% versus the prior year

GAAP revenues increased 43% to $53.6 million compared to $37.5 million for the third quarter of 2014

Excluding the impact of year-over-year changes in foreign exchange rates, revenue would have been $56.3 million, an increase of 50% versus the prior year

GAAP net loss was $(11.7) million, or $(0.30) per share, compared to a net loss of $(12.8) million, or $(0.34) per share, for the third quarter of 2014

Non-GAAP net loss was $(6.1) million, or $(0.15) per share, compared to a non-GAAP net loss of $(9.0) million, or $(0.24) per share, for the third quarter of 2014

Adjusted EBITDA was $4.7 million compared to $(2.8) million for the third quarter of 2014

Free Cash Flow increased to $5.4 million, an improvement over $(2.9) million for the third quarter of 2014

Added 140,000 net premium subscriptions in the period to reach 1.64 million as of September 30, 2015, a 46% increase over the prior year

Added over 4.8 million registered users in the third quarter to reach over 72 million as of September 30, 2015, a 34% increase compared to the prior year

Business Highlights

Launched a complete redesign of the Wix Editor: The new Wix Editor represents the first full redesign of the company’s web editing software since launching the industry’s first DIY HTML5 Editor in 2012. With a highly improved user interface, industry-first features for a code-free platform and a more personalized experience for the user, the new Wix Editor makes it even easier for anyone to create, manage and grow their online presence.

Announced the launch of Wix Music 2.0: The updated Wix Music offering eliminates the need for musicians to piece together multiple products to build an online presence. Wix Music integrates with Wix’s website builder and offers commission-free music sales, distribution to over 120 streaming services, promotion and ticketing capabilities, and fan management and communication tools in a single solution.

Operational excellence reduces passive churn: A focus on improving our payment and collection processes has improved passive churn by 10%, an example of how Wix uses operational excellence to maximize cohort value.

Continued mobile growth: Eclipsed 11 million mobile sites created on the Wix platform to date, making Wix among the largest mobile site development platforms globally.

Increasing platform engagement: Demonstrating the increasing engagement with the Wix ecosystem, users have saved over 200 million contacts onto the Wix platform. Leveraging Wix’s MyAccount CRM system, users track customer activity data, manage relationships and communicate using WixShoutOut.

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