Wix.com Ltd. revenue jumped on 26.1% while EBITDA Margin decreased on 5.2 pp from -3.2% to -8.3%
02/20/2020 • About Wix.com Ltd. (
$WIX) • By InTwits
Wix.com Ltd. reported 2019 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: 2019 revenue growth was 26.1%, 5 year revenue CAGR was 39.9% at 2019 ROIC -14.1%
- The company operates at negative EBITDA Margin: -8.3%
- Wix.com Ltd. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2015-2019 was 12.1% while average EBITDA Margin was -9.0% for the sames years. In 2019 SBC/Revenue was even higher: 14.4%
- Wix.com Ltd. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's in pair with industry average of 3.5%
- CAPEX is quite volatile: $21m in 2019, $14m in 2018, $12m in 2017, $4m in 2016, $6m in 2015
- The company has unprofitable business model: ROIC is -14.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 26.1%. Revenue growth showed small slowdown in 19Q4 - it was 24.9% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 5.2 pp from -3.2% to -8.3% in 2019. During 2015-2019 EBITDA Margin topped in 2018 at -3.2%.
Gross Margin decreased on 4.8 pp from 79.0% to 74.1% in 2019. 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 increased slightly on 0.62 pp from 51.1% to 51.7% in 2019. SG&A as a % of Revenue followed a declining trend at -4.6 pp per annum in the last 5 years. Stock Based Compensation (SBC) as a % of Revenue increased on 2.4 pp from 12.0% to 14.4% in 2019. SBC as a % of Revenue grew at 1.2 pp per annum in the last 5 years.
Net Income margin decreased on 5.2 pp from -6.1% to -11.4% in 2019. During 2015-2019 Net Income margin topped in 2018 at -6.1%.
Investments (CAPEX, working capital and M&A)
Wix.com Ltd.'s CAPEX/Revenue was 2.8% in 2019. CAPEX/Revenue increased slightly on 1.3 pp from 1.5% in 2016 to 2.8% in 2019. For the last three years the average CAPEX/Revenue was 2.6%.
Accounts receivable as a % of Revenue showed almost no change in 2019. Accounts payable as a % of Revenue dropped on 16.8 pp from 35.9% to 19.1% in 2019.
Return on investment
The company operates at negative ROIC (-14.1%) and ROE (-48.0%). ROIC decreased slightly on 1.9 pp from -12.2% to -14.1% in 2019. ROE decreased on 2.6 pp from -45.4% to -48.0% in 2019.
Leverage (Debt)
Company's Net Debt / EBITDA is -5.4x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2019. Debt jumped on 30.7% while cash dropped on 19.0%.
Wix.com Ltd. has no short term refinancing risk: cash is higher than short term debt (1,414.9%).
Management team
Avishai Abrahami is a Wix.com Ltd.'s CEO. Avishai Abrahami is a founder and has spent 12 years with the company. CEO total compensation was
$443,000 in 2019 which included
$359,000 salary. Wix.com Ltd.'s CFO Lior Shemesh has spent 7 years with the company.
Insider ownership is 2.3%. Insider ownership dropped on 19.5%.
The company has 2,562 employees. The number of employees surged on 20.1%. Average revenue per employee in 2019 was
$297,068 and it increased on 5.0%.
Financial and operational results
FY ended 12/31/2019
Wix.com Ltd. ($WIX) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 203.5 | 290.1 | 425.6 | 603.7 | 761.1 | 26.1% |
| Gross Profit | 168.5 | 244.8 | 356.2 | 476.8 | 564.2 | 18.3% |
| SG&A | 139.5 | 183.5 | 252.6 | 308.5 | 393.6 | 27.6% |
| EBITDA | -43.0 | -38.7 | -41.6 | -19.1 | -63.5 | |
| EBIT | -48.6 | -44.0 | -50.0 | -30.6 | -80.3 | |
| Interest expence | | | 7.4 | 1.7 | | |
| Tax | 2.8 | 3.1 | 1.3 | 3.2 | | |
| Net Income | -51.3 | -46.9 | -56.3 | -37.1 | -86.4 | |
| Stock Based Compensation | 19.4 | 28.8 | 47.7 | 72.3 | 109.3 | 51.2% |
Balance Sheet
|
|---|
| Cash | 39.2 | 93.1 | 85.2 | 331.1 | 268.1 | -19.0% |
| Accounts Receivable | 6.5 | 8.3 | 11.4 | 13.5 | 17.0 | 25.6% |
| Accounts Payable | 12.3 | 20.7 | 34.2 | 45.6 | 37.7 | -17.3% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 18.9 | |
| Long Term Debt | 0.0 | 0.0 | 1.2 | 339.0 | 424.2 | 25.1% |
Cash flow
|
|---|
| Capex | 6.3 | 4.4 | 11.6 | 13.7 | 21.4 | 56.6% |
| Acquisitions | | | 33.1 | | | |
Ratios
|
|---|
| Revenue growth | 43.5% | 42.5% | 46.7% | 41.8% | 26.1% | |
| EBITDA growth | -18.6% | -9.9% | 7.4% | -54.0% | 232.3% | |
|
|---|
| Gross Margin | 82.8% | 84.4% | 83.7% | 79.0% | 74.1% | -4.8% |
| EBITDA Margin | -21.1% | -13.4% | -9.8% | -3.2% | -8.3% | -5.2% |
| EBIT Margin | -23.9% | -15.2% | -11.7% | -5.1% | -10.5% | -5.5% |
| SG&A, % of revenue | 68.6% | 63.2% | 59.4% | 51.1% | 51.7% | 0.6% |
| SBC, % of revenue | 9.5% | 9.9% | 11.2% | 12.0% | 14.4% | 2.4% |
| Net Income Margin | -25.2% | -16.2% | -13.2% | -6.1% | -11.4% | -5.2% |
| CAPEX, % of revenue | 3.1% | 1.5% | 2.7% | 2.3% | 2.8% | 0.5% |
|
|---|
| ROIC | -655.2% | | -994.1% | -12.2% | -14.1% | -1.9% |
| ROE | | | | -45.4% | -48.0% | -2.6% |
| Interest expence / Average debt | | | 1,215.9% | 1.0% | | |
People
|
|---|
| Insider ownership | 2.9% | 2.9% | 2.9% | 2.9% | 2.3% | -0.6% |
| Employees | 976 | 1,248 | 1,728 | 2,133 | 2,562 | 20.1% |
| Revenue/Employee, th. $ | 209 | 232 | 246 | 283 | 297 | 5.0% |
Wix.com Ltd. ($WIX) key quoterly financial indicators
| mln. $ | 19Q1 | 19Q2 | 19Q3 | 19Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 174 | 185 | 197 | 205 | | 26.3% | 26.6% | 26.6% | 24.9% |
| EBITDA | -24 | -10 | -17 | -12 | | | | | -1,328.2% |
| Net Income | -31 | -17 | -17 | -22 | | | | | |
Balance Sheet
|
|---|
| Cash | 348 | 351 | 283 | 268 | | 236.3% | -0.9% | -11.6% | -19.0% |
| Short Term Debt | 15 | 15 | 14 | 19 | | | | | |
| Long Term Debt | 388 | 392 | 395 | 424 | | 31,729.4% | 36.9% | 18.3% | 25.1% |
Ratios
|
|---|
| Gross Margin | 77.0% | 75.0% | 73.0% | 72.0% | | -1.9% | -4.2% | -5.8% | -7.0% |
| EBITDA Margin | -13.8% | -5.4% | -8.6% | -5.9% | | -2.2% | -3.0% | -8.3% | -6.4% |
| Net Income Margin | -17.8% | -9.2% | -8.6% | -10.7% | | -3.4% | -5.3% | -4.8% | -7.2% |
Peers in Internet Services & Infrastructure
Below we provide Wix.com Ltd. benchmarking against other companies in Internet Services & Infrastructure 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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| 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. ($OKTA) | | 109.5% | 86.6% | 60.0% | |
| |
|---|
| Median (15 companies) | 11.7% | 13.3% | 10.6% | 16.9% | |
|---|
| Wix.com Ltd. ($WIX) | | 42.5% | 46.7% | 41.8% | 26.1% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Liberated Syndication Inc ($LSYN) | | 68.1% | 77.5% | 84.9% | |
| VeriSign, Inc. ($VRSN) | 81.8% | 82.6% | 83.4% | 84.2% | |
| MongoDB, Inc. ($MDB) | | 68.0% | 70.5% | 74.2% | |
| Carbonite, Inc. ($CARB) | 71.6% | 70.6% | 70.7% | 71.2% | |
| Okta, Inc. ($OKTA) | 54.3% | 58.1% | 65.1% | 68.5% | |
| |
|---|
| Median (15 companies) | 54.3% | 59.2% | 61.7% | 64.9% | |
|---|
| Wix.com Ltd. ($WIX) | 82.8% | 84.4% | 83.7% | 79.0% | 74.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| VeriSign, Inc. ($VRSN) | 63.0% | 65.2% | 65.0% | 67.1% | |
| Liberated Syndication Inc ($LSYN) | | 32.0% | -29.9% | 32.2% | |
| Internap Corporation ($INAP) | 21.0% | -5.4% | 28.4% | 30.5% | |
| Akamai Technologies, Inc. ($AKAM) | 34.8% | 33.9% | 27.6% | 29.4% | |
| Endurance International Group Holdings, Inc. ($EIGI) | 24.0% | 14.8% | 20.0% | 26.0% | |
| |
|---|
| Median (15 companies) | 2.9% | -2.8% | -1.1% | 16.8% | |
|---|
| Wix.com Ltd. ($WIX) | -21.1% | -13.4% | -9.8% | -3.2% | -8.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Akamai Technologies, Inc. ($AKAM) | 20.2% | 13.5% | 16.7% | 14.9% | |
| 21Vianet Group, Inc. ($VNET) | 29.0% | 15.8% | 11.7% | 12.8% | |
| Internap Corporation ($INAP) | 17.5% | 14.9% | 12.7% | 12.1% | |
| Limelight Networks, Inc. ($LLNW) | 14.5% | 5.7% | 11.2% | 8.2% | |
| GTT Communications, Inc. ($GTT) | 3.8% | 4.6% | 5.1% | 5.2% | |
| |
|---|
| Median (15 companies) | 3.8% | 4.0% | 4.1% | 3.3% | |
|---|
| Wix.com Ltd. ($WIX) | 3.1% | 1.5% | 2.7% | 2.3% | 2.8% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| VeriSign, Inc. ($VRSN) | 68.7% | 65.2% | 54.3% | 81.9% | |
| Liberated Syndication Inc ($LSYN) | | | -13.2% | 12.1% | |
| Akamai Technologies, Inc. ($AKAM) | 12.5% | 11.9% | 7.9% | 8.2% | |
| Endurance International Group Holdings, Inc. ($EIGI) | 4.2% | -2.3% | 2.0% | 7.5% | |
| GoDaddy Inc. ($GDDY) | -1.7% | 2.9% | 2.7% | 4.6% | |
| |
|---|
| Median (16 companies) | -4.4% | -14.9% | -13.2% | 1.4% | |
|---|
| Wix.com Ltd. ($WIX) | -655.2% | | -994.1% | -12.2% | -14.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| GTT Communications, Inc. ($GTT) | 7.4x | 6.8x | 7.2x | 12.7x | |
| Internap Corporation ($INAP) | 5.3x | | 6.5x | 6.9x | |
| Endurance International Group Holdings, Inc. ($EIGI) | 6.0x | 11.8x | 7.8x | 5.8x | |
| GoDaddy Inc. ($GDDY) | 5.4x | 2.3x | 6.8x | 3.9x | |
| VeriSign, Inc. ($VRSN) | 2.5x | 2.2x | 2.6x | 1.8x | |
| |
|---|
| Median (10 companies) | 3.9x | 2.2x | 4.5x | 1.4x | |
|---|
