Wix.com Ltd. revenue growth decelerated from 46.7% in 2017 to 41.8% in 2018
02/20/2019 • About Wix.com Ltd. (
$WIX) • By InTwits
Wix.com Ltd. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Wix.com Ltd. is a fast growth stock: 2018 revenue growth was 41.8%, 5 year revenue CAGR was 49.6% at 2018 ROIC -12.2%
- The company operates at negative EBITDA Margin: -3.2%
- Wix.com Ltd. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 is 11.0%. Average EBITDA Margin for the same period was -11.7%. In 2018 SBC/Revenue was even higher: 12.0%
- Wix.com Ltd. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $14m in 2018, $12m in 2017, $4m in 2016, $6m in 2015, $6m in 2014
- The company has unprofitable business model: ROIC is -12.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Wix.com Ltd.'s Revenue jumped on 41.8%. Revenue growth showed small slowdown in 18Q4 - it was 38.5% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 16.3 pp from 51.6% to 35.3% in 2018. EBITDA Margin stuck to a growing trend at 8.0 pp per annum in 2014-2018.
Gross Margin decreased on 4.7 pp from 83.7% to 79.0% in 2018. During the last 5 years Gross Margin topped in 2016 at 84.4% and was declining since that time. SG&A as a % of Revenue decreased on 8.3 pp from 59.4% to 51.1% in 2018. SG&A as a % of Revenue declined at -6.7 pp per annum in the last 5 years. Stock Based Compensation (SBC) as a % of Revenue increased slightly on 0.77 pp from 11.2% to 12.0% in 2018. During 2014-2018 SBC as a % of Revenue bottomed in 2015 at 9.5% and was growing since that time.
Net Income margin increased on 7.1 pp from -13.2% to -6.1% in 2018. Net Income margin stuck to a growing trend at 7.9 pp per annum in 2014-2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 2.3%. The company showed small CAPEX/Revenue decline of 0.85 pp from 3.1% in 2015 to 2.3% in 2018. It's average CAPEX/Revenue for the last three years was 2.2%.
Accounts receivable as a % of Revenue showed almost no change in 2018. Accounts payable as a % of Revenue dropped on 13.4 pp from 49.3% to 35.9% in 2018.
Return on investment
The company operates at negative ROIC (-12.2%) and ROE (-45.4%). ROIC surged on 982 pp from -994% to -12.2% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2018. Debt surged on 27,709% while cash jumped on 288%.
The company has no short term refinancing risk: short term debt is zero.
Average interest expence charged on company's debt was 0.51% in 2018.
Management team
Wix.com Ltd.'s CEO is Avishai Abrahami. Avishai Abrahami is a founder and has 8 years tenure with the company. Lior Shemesh is a Wix.com Ltd.'s CFO. Lior Shemesh has spent 6 years at the company.
2.9% of the company is owned by insiders. Insider ownership didn't change in 2018.
The company has 2,133 employees. The number of employees surged on 23.4%. Average revenue per employee in 2018 was
$283,030 and it surged on 14.9%.
Financial and operational results
FY ended 12/31/2018
Wix.com Ltd. ($WIX) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 141.8 | 203.5 | 290.1 | 425.6 | 603.7 | 41.8% |
| Gross Profit | 115.7 | 168.5 | 244.8 | 356.2 | 476.8 | 33.8% |
| SG&A | 113.5 | 139.5 | 183.5 | 252.6 | 308.5 | 22.1% |
| EBITDA | -52.8 | -43.0 | -38.7 | -41.6 | -19.1 | |
| EBIT | -55.6 | -48.6 | -44.0 | -50.0 | -30.6 | |
| Interest expence | | | | 7.4 | 1.7 | -76.5% |
| Tax | 3.1 | 2.8 | 3.1 | 1.3 | 3.2 | 142.4% |
| Net Income | -56.6 | -51.3 | -46.9 | -56.3 | -37.1 | |
| Stock Based Compensation | 14.7 | 19.4 | 28.8 | 47.7 | 72.3 | 51.6% |
Balance Sheet
|
|---|
| Cash | 40.2 | 39.2 | 93.1 | 85.2 | 331.1 | 288.4% |
| Accounts Receivable | 1.1 | 6.5 | 8.3 | 11.4 | 13.5 | 18.7% |
| Accounts Payable | 4.6 | 12.3 | 20.7 | 34.2 | 45.6 | 33.1% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 1.2 | 339.0 | 27,709.4% |
Cash flow
|
|---|
| Capex | 5.6 | 6.3 | 4.4 | 11.6 | 13.7 | 17.5% |
| Acquisitions | 4.3 | | | 33.1 | | |
Ratios
|
|---|
| Revenue growth | 76.3% | 43.5% | 42.5% | 46.7% | 41.8% | |
| EBITDA growth | 108.8% | -18.6% | -9.9% | 7.4% | -54.0% | |
|
|---|
| Gross Margin | 81.6% | 82.8% | 84.4% | 83.7% | 79.0% | -4.7% |
| EBITDA Margin | -37.2% | -21.1% | -13.4% | -9.8% | -3.2% | 6.6% |
| EBIT Margin | -39.2% | -23.9% | -15.2% | -11.7% | -5.1% | 6.7% |
| SG&A, % of revenue | 80.1% | 68.6% | 63.2% | 59.4% | 51.1% | -8.3% |
| SBC, % of revenue | 10.3% | 9.5% | 9.9% | 11.2% | 12.0% | 0.8% |
| Net Income Margin | -39.9% | -25.2% | -16.2% | -13.2% | -6.1% | 7.1% |
| CAPEX, % of revenue | 4.0% | 3.1% | 1.5% | 2.7% | 2.3% | -0.5% |
|
|---|
| ROIC | -137.5% | -655.2% | | -994.1% | -12.2% | 981.9% |
| ROE | -139.8% | | | | -45.4% | |
| Interest expence / Average debt | | | | 1,215.9% | 0.5% | -1,215.4% |
People
|
|---|
| Insider ownership | 2.9% | 2.9% | 2.9% | 2.9% | 2.9% | 0.0% |
| Employees | 784 | 976 | 1,248 | 1,728 | 2,133 | 23.4% |
| Revenue/Employee, th. $ | 181 | 209 | 232 | 246 | 283 | 14.9% |
Wix.com Ltd. ($WIX) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 138 | 146 | 156 | 164 | | 48.9% | 41.2% | 40.1% | 38.5% |
| EBITDA | -16 | -4 | -1 | 1 | | | | | |
| Net Income | -20 | -6 | -6 | -6 | | | | | |
Balance Sheet
|
|---|
| Cash | 103 | 354 | 320 | 331 | | 13.9% | 185.4% | 158.2% | 288.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 1 | 286 | 334 | 339 | | 0.0% | 23,381.3% | 27,296.0% | 27,709.4% |
Ratios
|
|---|
| Gross Margin | 78.9% | 79.2% | 78.8% | 79.0% | | -5.0% | -3.4% | -4.2% | -6.1% |
| EBITDA Margin | -11.6% | -2.4% | -0.4% | 0.6% | | 8.8% | 5.4% | 7.8% | 5.3% |
| Net Income Margin | -14.4% | -3.9% | -3.8% | -3.5% | | 8.2% | 9.9% | 9.3% | 2.1% |
Peers in Internet Services & Infrastruc
Below we provide Wix.com Ltd. benchmarking against other companies in Internet Services & Infrastruc industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Liberated Syndication Inc ($LSYN) | | | | 20.4% | 108.0% |
| GTT Communications, Inc. ($GTT) | | 78.1% | 41.3% | 58.7% | 80.1% |
| MongoDB, Inc. ($MDB) | | | | 55.3% | 63.8% |
| Twilio Inc. ($TWLO) | | 87.9% | 66.1% | 43.9% | 62.9% |
| Okta, Inc. ($OKTA) | | | 109.5% | 86.6% | 60.0% |
| |
|---|
| Median (15 companies) | 25.5% | 11.7% | 13.3% | 10.6% | 16.9% |
|---|
| Wix.com Ltd. ($WIX) | | 43.5% | 42.5% | 46.7% | 41.8% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Liberated Syndication Inc ($LSYN) | | | 68.1% | 77.5% | 84.9% |
| VeriSign, Inc. ($VRSN) | 81.3% | 81.8% | 82.6% | 83.4% | 84.2% |
| MongoDB, Inc. ($MDB) | | | 68.0% | 70.5% | 74.2% |
| Carbonite, Inc. ($CARB) | 68.5% | 71.6% | 70.6% | 70.7% | 71.2% |
| Okta, Inc. ($OKTA) | | 54.3% | 58.1% | 65.1% | 68.5% |
| |
|---|
| Median (15 companies) | 48.4% | 54.3% | 59.2% | 61.7% | 64.9% |
|---|
| Wix.com Ltd. ($WIX) | 81.6% | 82.8% | 84.4% | 83.7% | 79.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| VeriSign, Inc. ($VRSN) | 62.2% | 63.0% | 65.2% | 65.0% | 67.1% |
| Liberated Syndication Inc ($LSYN) | | | 32.0% | -29.9% | 32.2% |
| Internap Corporation ($INAP) | 20.0% | 21.0% | -5.4% | 28.4% | 30.5% |
| Akamai Technologies, Inc. ($AKAM) | 37.5% | 34.8% | 33.9% | 27.6% | 29.4% |
| Endurance International Group Holdings, Inc. ($EIGI) | 23.2% | 24.0% | 14.8% | 20.0% | 26.0% |
| |
|---|
| Median (15 companies) | 6.1% | 2.9% | -2.8% | -1.1% | 16.8% |
|---|
| Wix.com Ltd. ($WIX) | -37.2% | -21.1% | -13.4% | -9.8% | -3.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akamai Technologies, Inc. ($AKAM) | 16.2% | 20.2% | 13.5% | 16.7% | 14.9% |
| 21Vianet Group, Inc. ($VNET) | 32.6% | 29.0% | 15.8% | 11.7% | 12.8% |
| Internap Corporation ($INAP) | 24.0% | 17.5% | 14.9% | 12.7% | 12.1% |
| Limelight Networks, Inc. ($LLNW) | 11.5% | 14.5% | 5.7% | 11.2% | 8.2% |
| GTT Communications, Inc. ($GTT) | 2.8% | 3.8% | 4.6% | 5.1% | 5.2% |
| |
|---|
| Median (15 companies) | 4.4% | 3.8% | 4.0% | 4.1% | 3.3% |
|---|
| Wix.com Ltd. ($WIX) | 4.0% | 3.1% | 1.5% | 2.7% | 2.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| VeriSign, Inc. ($VRSN) | 60.6% | 68.7% | 65.2% | 54.3% | 81.9% |
| Liberated Syndication Inc ($LSYN) | | | | -13.2% | 12.1% |
| Akamai Technologies, Inc. ($AKAM) | 15.5% | 12.5% | 11.9% | 7.9% | 8.2% |
| Endurance International Group Holdings, Inc. ($EIGI) | 1.0% | 4.2% | -2.3% | 2.0% | 7.5% |
| GoDaddy Inc. ($GDDY) | -3.3% | -1.7% | 2.9% | 2.7% | 4.6% |
| |
|---|
| Median (16 companies) | -2.4% | -4.4% | -14.9% | -13.2% | 1.4% |
|---|
| Wix.com Ltd. ($WIX) | -137.5% | -655.2% | | -994.1% | -12.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| GTT Communications, Inc. ($GTT) | 3.1x | 7.4x | 6.8x | 7.2x | 12.7x |
| Internap Corporation ($INAP) | 5.1x | 5.3x | | 6.5x | 6.9x |
| Endurance International Group Holdings, Inc. ($EIGI) | 7.3x | 6.0x | 11.8x | 7.8x | 5.8x |
| GoDaddy Inc. ($GDDY) | 14.0x | 5.4x | 2.3x | 6.8x | 3.9x |
| VeriSign, Inc. ($VRSN) | 1.9x | 2.5x | 2.2x | 2.6x | 1.8x |
| |
|---|
| Median (10 companies) | 3.1x | 3.9x | 2.2x | 4.5x | 1.4x |
|---|
