Wix Results Presentation Deck
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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 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 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.
WIX
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