#1WIX.com Shareholder Update Third Quarter 2017 38 ITG trikk deiz IT Consulting & Services FIE!!!! ARAY b Pixw.ut#2Third Quarter Highlights Our third quarter results reflect our continued ability to drive growth through attracting new users to Wix and improving the conversion of registered users to premium subscriptions. Revenue and Collections both exceeded the top end of our guidance range this quarter. We continue to capitalize on a very large and global market opportunity with a data driven marketing strategy that produced nearly 5.2 million new registered users in the quarter. Conversion reached all time high levels in the third quarter. Improvements can be attributed to new products we have released and the ongoing improvements to existing products throughout the year. We added 188,000 net premium subscriptions in the third quarter. Most notably, the combination of the Wix Editor and Wix ADI drove meaningful conversion improvements throughout the third quarter. Wix Artificial Design Intelligence, or Wix ADI, was released roughly one year ago and was the first product to market that uses the power of Al in website design. Users of ADI can create a complete, stunning website, customized to their business and needs, within minutes. Since its release, we have made several improvements to the technology and overall product experience, and these efforts are now showing meaningful results. With the progress we have made with ADI, we are now actively working on localizing it for non-English geographies. We continue to improve this product and believe that it will continue to be a growth driver going forward. The Wix Code beta has also been a huge success as nearly 7,000 users participated and provided us with valuable feedback. This product, which mainly targets designers and developers, will significantly expand our addressable market and improve conversion as we bring efficiency to the workflow and deliver - 1- Third Quarter Financial Highlights GAAP Revenue $111.0 Million (+47% y/y) Collections $120.1 Million (+38% y/y) Net Cash Provided by Operating Activities $22.1 Million (+111% y/y) Free Cash Flow $18.9 Million (+101% y/y) Registered Users 114 Million (+23% y/y) Premium Subscriptions 3.1 Million (+33% y/y) Results vs. Guidance Actual Results GAAP Revenue $111.0 million Collections $120.1 million Prior Guidance $109-110 million $117-118 million WIX.com#3a richer front-end development environment for these types of users. With the success of the beta, we intend to begin rolling out Wix Code globally in the coming weeks. We continue to increase our rate of return on investments in marketing and R&D as free cash flow increased 101% y/y to $18.9 million in the third quarter. We continue to demonstrate an ability to generate free cash flow while maintaining investment in the business to drive growth. Our total cash balance increased to $209.7 million at the end of Q3. We are increasing our annual guidance for revenue, collections and free cash flow, reflecting our continued confidence in the execution of product innovation and world class marketing. Looking ahead, we expect that the same drivers of growth in 2017 - new products, continued improvements to existing products and a data driven marketing strategy - will fuel our growth in 2018. - 2- Wix.com#4Financial Performance Revenue of $111.0 million increased 47% year over year from $75.6 million in the third quarter last year and exceeded the high end of our guidance range of $109- $110 million. Collections were $120.1 million in Q3, above the high end of our guidance range of $117-$118 million, and 38% higher than Q3 last year. The strong growth in collections was primarily the result of continued improvements in conversion of registered users to premium subscriptions. Collections growth was also bolstered by strong renewal activity. In Q3, the ratio of renewed subscriptions to subscriptions eligible for renewal was the highest in our history. Our updated guidance for 2017 represents 40% year over year growth, which would be the third consecutive year of 40% annual growth with much larger numbers. Our growth on a quarterly basis is positively impacted throughout a year by new product and technology launches, enhancements we make to existing products and changes to marketing activities, which is common to product and technology companies such as ours. This growth may not happen linearly throughout a year or repeat itself in the same manner across multiple years. For example, in the last three years, our year over year growth on a quarterly basis has come in different patterns. However, on a full year basis for all three years, we have seen similar annual growth overall. Annual collections per new subscription grew to $158 in Q3, a 5% increase over Q3 2016. We continue to see strong growth in purchases of higher-priced subscriptions with vertical applications attached, as well as third party applications. We monitor this metric as it is an indicator of the amount we collect from new subscription purchases in a quarter, which is important for our calculation of time to return on investment (TROI). Non-GAAP gross margin was 84% of revenue compared to 86% in Q3 2016 and 84% in Q2 2017. We maintain strong gross margins as we leverage our - 3- $68.7 $81.5 $75.6 $145 $87.3 Revenue (in $ Mn) Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 $84.2 $150 $92.5 $97.6 Collections (in $ Mn) $103.5 $153 47% Y/Y Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 $111.0 38% Y/Y $114.5 $117.1 $120.1 $156 Q3'17 Average Collections per New Annual Subscription $156 $158 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Based on full-priced (excluding sales), new annual subscriptions purchased in the US for each quarter. WIX.com#5relationships with third parties to provide hosting services and focus on driving efficiency in scaling our capacity against the bandwidth and storage demands of our growing user base. The decline in gross margin year over year was partly attributed to changes in hosting arrangements that will benefit us longer term but that created some one- time costs. The decline was also due to higher support costs as we scale our customer support infrastructure to meet the growth in registered users and premium subscriptions, as we stated in our Q1 2017 earnings report. Since the beginning of the year, we have developed and introduced several new technologies and have added over 170 agents to provide support to our users. Finally, increased hosting costs associated with DeviantArt impacted our gross margin on a year over year basis. Over time, we anticipate hosting costs associated with DeviantArt will decline as its infrastructure is consolidated with ours and it gains the benefit of our scale. Non-GAAP R&D expense in the quarter increased to $32.0 million compared to $22.2 million in Q3 last year. Non-GAAP R&D expense rose to 27% of collections in Q3 compared to 25% of collections in Q3 2016 and 25% in Q2 2017. The increase this quarter was due to continued investments in headcount as we were successful in hiring R&D talent faster than expected. We view R&D headcount as being dependent on our ability to grow our top line from product and technology development. We have demonstrated over recent years of 40% annual collections growth that our investment in R&D talent generates positive returns and is key to driving sustainable growth in our business. In Q3, we increased headcount to over 1,000 people to execute our vision and strategy. Despite this increase in headcount in Q3, we still expect to gain leverage in R&D expense relative to collections for the full year 2017 compared to 2016. Our large and talented R&D team and our track record of delivering positive returns on our investment is a powerful and unique combination that we believe will continue to drive organic growth. - 4- 82% 2014 30% 2014 Non-GAAP Gross Margin 83% 2015 28% 85% 2015 Non-GAAP R&D as a % Collections 86% 2016 Q3'16 Q3'17 26% 25% 84% 2016 Q3'16 27% Q3'17 WIX.com#6Non-GAAP S&M expense during the quarter was $49.3 million, or 41% of collections, compared to $38.7 million, or 44% of collections, in Q3 2016. We remained within our TROI range of 7-9 months while continuing to invest larger amounts in direct acquisition and branding campaigns. The decline in marketing expenses as a percent of collections demonstrates our ability to execute our marketing strategy of optimizing activities across channels and geographies. For the full year 2017, we still expect S&M expense to be within 40-41% of collections, in line with our prior guidance, and a reduction of 3-4% from 2016. We expect to continue to gain leverage next year as well. Non-GAAP G&A expense was $9.0 million, or 7% of collections, in Q3, compared to $5.3 million, or 6% of collections, in Q3 last year. The year over year increase was due to increased headcount to support our growth, higher overhead expenses and additional costs associated with DeviantArt. Non-GAAP operating income was $3.4 million compared to a loss of $(1.2) million last year as our business continues to grow, and we continue to benefit from the flexibility and scalability of our low, fixed cost model. This quarter is the second consecutive quarter and third of the last four in which we had positive operating income on a non-GAAP basis. We still expect to generate positive non-GAAP operating income for the full year 2017, consistent with our prior guidance. Free cash flow, which is calculated as net cash flow provided by operating activities less capital expenditures, grew to $18.9 million in Q3, a 101% increase over Q3 last year. Year to date, we have generated over $51 million in free cash flow, and our cash balance at the end of Q3 was $209.7 million. We continue to increase the rate of return on our investments in marketing and R&D, even while sustaining strong top line growth. Total long term debt at the end of Q3 was $1.2 million. We had 1,879 employees at the end of the quarter. - 5- 56% 2014 ($3.0) Q2'16 Non-GAAP S&M as a % Collections 48% $10.2 2015 44% Non-GAAP Operating Income (Loss) (in $ Mn) ($1.2) 44% 2016 Q3'16 Q3'17 $3.9 ($7.5) 41% $3.5 $3.4 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Free Cash Flow (in $ Mn) $18.7 $14.8 will $9.4 $17.4 $18.9 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 WIX.com#7Our basic share count at the end of Q3 was approximately 46.1 million shares, and our fully diluted share count was approximately 56.4 million shares. Registered Users and Premium Subscriptions One of the most unique traits of our business model is the ongoing monetization of user cohorts over a long period of time. As of the end of Q3 2017, we expect our existing user cohorts to generate over $2.5 billion in collections over the next six years without any further investment in marketing. The number of active subscriptions from our Q1 2017 user cohort reached 4% of users in the cohort, the highest ever, and all of our Q1 user cohorts other than one generated positive net subscription additions in Q3. This outstanding performance was driven by record conversion and the highest ever percentage of renewed subscriptions in a quarter. New registered users totaled 5.2 million in Q3 2017, compared to 5.0 million in Q3 last year and 5.5 million in Q2 2017. We continue to attract increasingly higher value users as we consistently improve execution of our direct marketing activities and grow the awareness of our brand while remaining within our TROI goals. We added 188,000 net premium subscriptions in Q3, compared to 174,000 in Q3 last year and 192,000 in Q2 2017. We ended the quarter with a total of 3.1 million premium subscriptions, up 33% year over year. Conversion of registered users to premium subscriptions climbed to its highest level for our new user cohorts due to enhancements made to our product platform, including the Wix Editor and Wix ADI. In Q3, 60% of our subscriptions came from users who joined in prior quarters and did not require additional marketing dollars to purchase a premium subscription. Our ability to convert a large cohort of existing users into - 6- 87.4 Registered Users (in Mn) 2.1 92.4 97.4 2.3 103.2 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Premium Subscriptions (in Mn) 2.5 108.7 2.7 113.9 2.9 3.1 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 WIX.com#8premium subscriptions is unique to our freemium business model. The new cohort created in Q3 2017 generated 40% of our new gross subscriptions in the quarter, consistent with prior year levels. During Q3, 64% of new subscriptions purchased were for periods of one year or longer with the remaining 36% being monthly subscriptions. Over the last five quarters, changes we made to our marketing efforts in mid-Q2 of 2016 caused the incremental year over year growth in new monthly subscriptions to exceed the year over year growth in new annual subscriptions. We are happy with this shift as it has been accretive to our marketing returns and our ability to achieve our TROI while continuing to increase marketing spend. Despite this shift, as of the end of Q3, 82% of our subscriptions are for a duration of one year or longer. -7- % Gross New Subscriptions By Cohort 62% 63% 63% 60% 38% Q2'16 75% 25% 40% Q2'16 Q3'16 Q4'16 Prior User Cohorts 37% 65% 35% % Gross New Subscriptions By Package Duration Q3'16 70% 59% 30% 41% 60% 37% 40% Q1'17 Q2'17 Q3'17 35% Current User Cohort 65% 67% 64% 33% 36% Q4'16 Q1'17 Q2'17 Q3'17 1 Year or Longer Monthly Wix.com#9Product Updates Our vision remains to make content creation on the internet accessible to anyone. We execute this vision by developing innovative technology and products that are easy to use and produce stunning results. Wix ADI A year since the release of Wix ADI, results show that adding ADI to our suite of products has significantly increased conversion and user satisfaction. ADI simplifies website creation for less computer savvy users and accelerates website development for more professional users. Wix ADI was the first product to pair advanced Al technology with the fields of design and content optimization to create a personalized website, tailored specifically to a user's specific needs, in just minutes for free. Since its launch, millions of websites have been created by users with Wix ADI, generating user cohorts with over $120 million in future collections. Because of the improvement in conversion and the magnitude of millions of websites, we view Wix ADI as a tremendous success. We are even more excited about our ability to continue the development of future versions of Wix ADI that will continue to drive growth. Some highlights of recent improvements include: -8- ● Content-users can now select from over 10,000 different categories and sub-categories, providing a more tailor-made experience Brand matching - Wix users can now automatically extract colors from their business' logo for use throughout their website, allowing them to create a complete, cohesive online brand Color palette generation - based on colors selected by the user, ADI provides more color palette options, taking into account harmony (hue, saturation, lightness) and variety Wix ADI Novice The Wix Platform Wix Editor Wix Code Expert Wix.com#10● ● Readability - at any stage of the website design process, Wix ADI ensures that text is always optimized for readability, no matter which website colors are used Custom cropping any images uploaded to an ADI website are automatically cropped for optimal visual impact using object recognition technology - 9- Overall performance improvements - reduces the time it takes a user to create the initial site and make modifications Improved rules and behaviors - makes changes easier and more intelligent within the ADI environment With this success, we are now actively developing ADI to be deployed into non-English speaking countries. Wix Code In July, we introduced Wix Code, a groundbreaking technology and product platform that enables designers and developers to create highly functional and robust websites and web applications. We believe Wix Code can change the way advanced websites and web applications are built. Wix Code offers enhanced front-end capabilities using the Wix Editor and JavaScript editing for easy development within the browser for custom interactivity. Wix Code also allows users to build and incorporate database collections and input forms to collect, store and present data. Its serverless functionality removes the hassles of setting up and maintaining back- end web environments, completely streamlining the workflow and reducing the time it takes to build. We also launched an open beta of Wix Code in July, which was a huge success as nearly 7,000 users participated. The most exciting aspect of Wix Code is the variety of websites and applications that have been created using its technology. Some examples of what has been created with Wix Code already include: Wix.com#11● ● Online commerce marketplaces - with the use of online input forms, a database and dynamic pages, users have created online marketplaces where customers can search, discover and transact Real estate vertical application - through the integration of a database and APIs, buyers and sellers can search home listings Content directories and online publishing - by using a dynamic pages and a database to manage thousands of pieces of content, users can create robust online magazines and directories We believe Wix Code greatly expands our TAM to include designers and developers who only partially use or do not use Wix at all today. We estimate that roughly 90% of the approximately 450 million websites live today were created by designers and developers using an open source platform or by coding the entire site. Wix Code addresses these experts' needs and gives them more powerful tools to create advanced websites. The success of the beta will allow us to open Wix Code to the public in the coming weeks. - 10- Throughout 2018, we expect to increase our marketing and positioning efforts to focus more on the designer and developer market, on top of our current target market. We believe the expert design and developer market is a huge opportunity and that we have a best-in-class product to offer these users. This does not mean we are reducing our activity in our current market - we will continue to invest in our product and marketing activities in this market as we always have. The combination of the Wix Editor, Wix ADI and Wix Code create a platform that any user can use, regardless of skill set, to create any type of content online. DeviantArt Wix.com#12The integration of DeviantArt is on schedule, and we have been pleased with our progress to date. We have built a full R&D team to lead our efforts in product, UX, design and billing, and we have migrated all DeviantArt data into the Wix intelligence systems. We have also focused on building customer service and have begun integrating it with our existing support infrastructure. We have also begun integrating DeviantArt's back-end infrastructure with ours. Finally, we have begun development of the first wave of new DeviantArt products and have a full deployment plan in place. As previously stated, the cash impact of incremental investments into DeviantArt will be approximately $20 million over 2-3 years. In 2017, the total impact will be approximately $8 million and we expect the impact to be approximately $8-$9 million in 2018. Much of this impact in 2018 will be in R&D as we invest in additional development talent. Marketing As we look ahead at our marketing plans for 2018, we intend to increase our overall marketing investment - including direct acquisition and branding - toward our current target market, just as we have for the last several years. We will be investing a portion of our increased brand investment budget towards designers and developers in 2018, in light of the launch of Wix Code. As a result, we have made the decision to not run a Super Bowl campaign in 2018. We constantly optimize our marketing investment across various channels, and we will, as always, invest in what we believe will provide the highest return, based on TROI. Business Outlook Reaching record conversion levels and with the ongoing momentum in product development and marketing activities, we are excited about the remainder of 2017. - 11 - Wix.com#13For Q4 guidance, we expect the following: Revenue in the range of $116 to $117 million, an increase of 38% to 39% year over year ● Given our strong performance in Q3, we are raising our full year guidance for 2017: ● ● Collections in the range of $126 to $127 million, representing year over year growth of 29% to 30% - 12- Increasing the range of revenue from $421 to $423 million to a range of $423 to $424 million, which is an increase of 46% year over year Increasing the collections range from $473 to $477 million to $478 to $479 million, representing annual growth of 40%. If we report collections within or above this range, it will mark the third consecutive year of 40% year over year collections growth Given the continued leverage we are realizing in our model, we are raising our expected free cash flow from a range of $67 to $68 million to $68 to $69 million, which represents 88% to 91% growth over last year We are updating our operating expense expectations for the full year 2017 as follows: We continue to expect non-GAAP S&M expense as a percent of collections to be approximately 40% to 41% for the full year, as we previously guided Non-GAAP Financial Outlook (In $ millions) Revenue % Y/Y Collections % Y/Y S&M (% collections) R&D (% collections) G&A (% collections) Capex Free Cash Flow % Collections SBC Expense Basic Shares O/S Fully Diluted Shares O/S Q4'17 2017 Updated Initial 2017 Prior $421-423 $423-424 $116-117 45-46% 46% 38-39% $473-477 $478-479 $126-127 38-39% 40% 29-30% 40-41% 40-41% ~$6-7 $67-68 14% 25% 7% ~$9 $68-69 14% ~$39-40 ~$46-47 48-49mn 46-47mn 57-58mn 56-57mn Wix.com#14● ● ● ● We expect non-GAAP R&D expense as a percent of collections to be approximately 25% for the full year. This reflects leverage we expect to gain over 2016 and includes the additional R&D talent we have brought on board to Wix and DeviantArt in recent months We expect non-GAAP G&A expense as a percent of collections to be approximately 7% for the full year, reflecting the ongoing growth of our business and additional G&A expenses we have incurred this year - 13- We now expect share-based compensation expense for the full year of approximately $46 to $47 million. As our stock price has increased and our headcount has grown, we have incurred more equity compensation expense than we originally projected We now expect capital expenditures of roughly $9 million, which accounts for the build out of additional space to accommodate our growing headcount We expect our basic share count to be approximately 46 to 47 million shares outstanding and our fully diluted share count will be roughly 56 to 57 million shares outstanding at year end, slightly lower than we originally guided Looking ahead to 2018, we expect the same drivers in 2017 will fuel growth in 2018 - improved conversion from new products and continued improvements to existing products, continued execution of our marketing strategy and increasing momentum in our brand. As has been our practice, we will provide specific guidance on revenue, collections and free cash flow for 2018 during our Q4 earnings call in February. Wix.com#15For operating expenses in 2018: ● ● ● - 14- We will continue to grow our marketing investment consistent with recent years. We expect to gain leverage on collections of approximately 3% on this investment throughout 2018 compared to 2017. This includes the investment in our brand toward the designer and developer market. We expect total operating expenses to be impacted by the recent strengthening of the Israeli Shekel relative to the US Dollar. We have been successful in hedging our exposure to the Shekel throughout 2017. However, in recent months the Shekel has continued to strengthen. If it remains at its current level into 2018, it will increase our headcount costs in Israel by approximately $12 million, which will mainly impact our R&D costs for 2018. In addition, as previously stated, we will invest an additional $8-$9 million in DeviantArt in 2018, which will mostly impact our R&D costs. For 2018, including the potential impact from the movement in the Shekel, our investment in DeviantArt, and our organic growth in R&D, we expect total R&D expenses to grow roughly 37%-38% over 2017. Wix.com#16Conference Call and Webcast Information Wix will host a conference call at 8:30 a.m. ET on Wednesday, November 8, 2017 to answer questions about the financial and operational performance of the business during the third quarter 2017. 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, supplemental data sheet and supporting slides to its Investor Relations website at https://investors.wix.com/results. 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 866-393-4306 (US/Canada), 734-385-2616 (International) or 1-809-315- 362 (Israel) at least ten minutes prior to the start time of the call and reference Conference ID 97473958. A telephonic replay of the call will be available through November 15, 2017 at 11:59 p.m. ET by dialing 855-859-2056 (US/Canada) or 404-537-3406 (International) and providing Conference ID 97473958. 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/. 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), free cash flow, non-GAAP net income (loss), non- GAAP net income (loss) per share, non-GAAP R&D expense, non-GAAP S&M expense, and non-GAAP G&A expense (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. Non-GAAP gross margin represents gross profit calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related costs 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, and acquisition-related costs. Non-GAAP R&D expense represents R&D expense calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related costs and amortization. Non-GAAP S&M expense represents S&M expense calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, acquisition-related costs and amortization. Non-GAAP G&A expense represents G&A expense calculated in accordance with GAAP as adjusted for the impact of share- based compensation expense, withdrawn secondary offering expenses and acquisition-related costs. Non-GAAP net loss represents net loss calculated in accordance with GAAP as adjusted for the impact of share-based compensation expense, amortization, and acquisition-related costs. 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 income (loss) per share. Free cash flow represents net cash provided by (used in) operating activities less capital expenditures. - 15- WIX.com#17The 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 of GAAP to Non-GAAP Financial Measures" table in this presentation. 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 its guidance as to free cash flow to cash flow from operations because it does not provide guidance for cash flow from operations. As items that impact cash flow from operations 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 cash flow from operations is not available without unreasonable effort. Forward-Looking Statements This presentation 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 the availability, merchantability or functionality of certain new products or features and their anticipated product demand and customer satisfaction, and may be identified by words like "anticipate," "assume," "believe," "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 presentation are based on management's current expectations, which are subject to uncertainty, risks and changes in circumstances that are difficult to predict, including the timing of product releases, 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; our ability to effectively execute our initiatives to scale and improve our user support function; customer acceptance of new products and other challenges inherent in new product development, 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 2016 annual report on Form 20-F filed with the Securities and Exchange Commission on March 28, 2017. Any forward-looking statement made by us in this presentation 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. - 16- WIX.com#18Reconciliation of GAAP to non-GAAP measures in 000s Revenue Change in deferred revenue Collections in 000s GAAP Operating Loss Share Based Compensation Amortization Acquisition-related Expenses & Withdrawn Secondary Expense Non-GAAP Operating Loss in 000s GAAP Gross Profit Share Based Compensation Acquisition-related expenses Amortization Non-GAAP Gross Profit - 17- Q1 $44,524 $11,345 $55,869 Q1 $36,713 $295 $0 $0 $37,008 2015 Q2 $48,581 $8,787 $57,368 Q2 $40,191 $250 $0 $0 $40,441 Q3 $53,582 $7,998 $61,580 Q1 ($17,328) $4,048 $155 Q2 Q3 ($10,774) ($10,370) $3,787 $5,322 $156 $155 $0 ($4,893) $0 $0 ($13,125) ($6,832) 2015 2015 Q3 $44,420 $428 $0 $0 $44,848 Q4 $56,831 $10,039 $66,870 Q4 ($10,163) $5,577 $170 $0 ($4,416) Q4 $47,224 $380 $0 $0 $47,605 Q1 Q2 $61,586 $68,730 $14,108 $12,723 $75,694 $81,453 2016 Q1 $51,079 $428 $0 $0 $51,507 Q1 Q2 Q3 ($19,768) ($10,490) ($9,032) $6,137 $6,927 $7,163 $187 $186 $188 $1,183 ($12,261) $514 $397 ($2,980) ($1,166) Q2 $57,712 $475 $0 $0 $58,187 Q3 Q4 $75,611 $84,176 $11,659 $13,476 $87,270 $97,652 2016 2016 Q3 $64,587 $466 $0 $0 $65,053 Q4 ($4,742) $7,821 $187 $614 $3,879 Q4 $71,438 $429 $0 $0 $71,867 2017 Q2 Q1 $92,538 $103,522 $22,008 $13,599 $114,546 $117,121 2017 Q1 Q2 ($20,471) ($10,563) $8,982 $11,979 $186 $1,240 $3,765 $860 ($7,538) $3,516 Q1 $77,675 $506 $0 $28 $78,209 2017 Q2 $85,497 $695 $1,040 $0 $87,232 Q3 $111,031 $9,088 $120,119 Q3 ($11,454) $13,035 $948 $889 $3,418 Q3 $92,204 $783 $757 $0 $93,744 Wix.com