Wix Results Presentation Deck
is consolidated to ours and it gains the benefit of our scale. Excluding hosting
costs from DeviantArt, non-GAAP gross margin would have been 85% in Q2
2017. In Q2 2017, we began amortizing intangibles related to the acquisitions of
DeviantArt and flok, which are excluded from our non-GAAP gross margin.
We maintain strong gross margins as we leverage our relationships 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.
Non-GAAP R&D expense in the quarter increased to $29.2 million compared to
$21.4 million in Q2 last year. The increase was primarily due to continued
investments in new product development and improvements to existing products.
Non-GAAP R&D expense was 25% of collections in Q2 compared to 26% of
collections in the year ago period and 23% in Q1 2017. As conversion
continues to improve, we generate incremental leverage in our
investment in R&D on a year over year basis.
Non-GAAP S&M expense during the quarter was $46.2 million, or 39% of
collections compared to $34.9 million, or 43% of collections, in the year ago
quarter. We continued to invest in branding and direct acquisition campaigns
while staying within our Time to Return on Investment (TROI) range of 7-9 months
and optimizing our investment across various channels and geographies. This
continued investment in marketing while remaining within our return
thresholds demonstrates our strong execution of our marketing strategy,
increased efficiency in our direct advertising spend and improved brand.
We reaffirm that S&M expense will be 40% - 41% of collections for the full year
2017, as previously provided in our outlook.
Non-GAAP G&A expense was $8.4 million or 7% of collections in Q2, compared
to $4.9 million or 6% of collections last year. The year over year increase was due
to increased headcount, higher overhead expenses and additional costs
associated with DeviantArt.
- 4-
30%
2014
56%
2014
Non-GAAP R&D as a
% Collections
($12.3)
28%
2015
48%
2015
26%
Non-GAAP S&M as a
% Collections
($3.0)
2016 Q2'16
44%
2016
26%
($1.2)
$3.9
43%
Non-GAAP Operating Income (Loss)
(in $ Mn)
25%
Q2'17
($7.5)
39%
Q2'16 Q2¹17
$3.5
Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17
WIX.comView entire presentation