Wix Results Presentation Deck

We also continue to see increased activity in our App Market with app purchases in the quarter up 51% year over year. These strong trends demonstrate the tremendous value the new products and services we introduced earlier in 2016 present to small businesses and highlight our ability to build and offer businesses increasing functionality. Our gross margin on a non-GAAP basis was 85% of revenue in Q4 compared to 84% last year and was 87% of collections, compared to 85% in Q4 last year. For the full year 2016, non-GAAP gross margin was 85% of revenue and 87% of collections, compared to 83% and 85%, respectively. We continue to deliver strong gross margins by leveraging our relationships with third- party providers to effectively manage our hosting costs and scale benefits. Our non-GAAP gross margin remains consistent with the long-term target we shared at our analyst day in Q2'16. R&D expense in the quarter on a non-GAAP basis increased to $24.0 million compared to $18.9 million in Q4 last year due to higher headcount to further enhance our platform with new products and vertical solutions. R&D expense fell to 25% of collections in Q4 compared to 28% of collections in Q4 last year as we continue to generate incremental leverage on our technology investments on a year over year basis. R&D fell to 26% of collections in 2016 from 28% in 2015, and we continue to track very well against our long- term target of 18-20%. Non-GAAP S&M expense during the quarter was $38.8 million, or 40% of collections, compared to $29.4 million, or 44% of collections, last year. By continuing to optimize our nnel and geographic mix, we are able to continue growing our marketing investment year over year and remain within our TROI (Time to Return on Investment) range of 7-9 months. Our ability to increase our global marketing efforts while remaining within our TROI target range is a significant achievement and a testament to the -5- Non-GAAP Gross Margin as a % Collections 85% 2015 30% 2014 56% 2014 28% 87% 2016 2015 Non-GAAP R&D as a % Collections 48% 26% 2015 2016 85% 44% Q4'15 Non-GAAP S&M as a % Collections 2016 28% Q4'15 44% Q4'15 87% Q4'16 25% Q4'16 40% Q4'16 WIX.com

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