Wix.com Ltd. reports 29.9% revenue growth in FY2020 and 9.9 pp EBITDA Margin decline from -8.3% to -18.2%
02/17/2021 • About Wix.com Ltd. (
$WIX) • By InTwits
Wix.com Ltd. reported FY2020 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: FY2020 revenue growth was 29.9%, 5 year revenue CAGR was 37.2% at FY2020 ROIC -21.5%
- The company operates at negative EBITDA Margin: -18.2%
- Wix.com Ltd. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 was 8.4% while average EBITDA Margin was -11.2% for the sames years
- Wix.com Ltd. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's in pair with industry average of 5.5%
- CAPEX is quite volatile: $18m in FY2020, $21m in FY2019, $14m in FY2018, $12m in FY2017, $4m in FY2016
- The company has unprofitable business model: ROIC is -21.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Wix.com Ltd.'s Revenue surged on 29.9%. Revenue growth showed acceleration in FY20Q4 - it increased 37.8% YoY. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 9.9 pp from -8.3% to -18.2% in FY2020. During FY2016-FY2020 EBITDA Margin topped in FY2018 at -3.2% and was declining since that time.
Gross Margin decreased on 6.1 pp from 74.1% to 68.1% in FY2020. Gross Margin declined at -4.2 pp per annum in the last 5 years. SG&A as a % of Revenue increased on 3.9 pp from 51.7% to 55.6% in FY2020. During the last 5 years SG&A as a % of Revenue bottomed in FY2018 at 51.1% and was growing since that time.
Net Income margin dropped on 10.5 pp from -11.4% to -21.9% in FY2020. During the last 5 years Net Income margin topped in FY2018 at -6.1% and was declining since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.9% in FY2020. The company's CAPEX/Revenue decreased slightly on 0.88 pp from 2.7% in FY2017 to 1.9% in FY2020. It's average level of CAPEX/Revenue for the last three years was 2.3%.
Return on investment
The company operates at negative ROIC (-21.5%) and ROE (-94.5%). ROIC decreased on 7.5 pp from -14.1% to -21.5% in FY2020. ROE dropped on 46.5 pp from -48.0% to -94.5% in FY2020.
Leverage (Debt)
Debt level is 0.4x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2020. Debt surged on 110% while cash dropped on 37.0%.
Wix.com Ltd. has no short term refinancing risk: cash is higher than short term debt (756.0%).
Management team
The company's CEO Avishai Abrahami has spent 13 years with the company. Wix.com Ltd.'s CFO Lior Shemesh has spent 8 years with the company.
Financial and operational results
Wix.com Ltd. ($WIX) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 290.1 | 425.6 | 603.7 | 761.1 | 988.8 | 29.9% |
| Gross Profit | 244.8 | 356.2 | 476.8 | 564.2 | 673.1 | 19.3% |
| SG&A | 183.5 | 252.6 | 308.5 | 393.6 | 550.1 | 39.8% |
| EBITDA | -38.7 | -41.6 | -19.1 | -63.5 | -180.2 | |
| EBIT | -44.0 | -50.0 | -30.6 | -80.3 | | |
| Interest expence | | 7.4 | 1.7 | | | |
| Tax | 3.1 | 1.3 | 3.2 | | | |
| Net Income | -46.9 | -56.3 | -37.1 | -86.4 | -216.5 | |
| Stock Based Compensation | 28.8 | 47.7 | 72.3 | 109.3 | | |
Balance Sheet
|
|---|
| Cash | 93.1 | 85.2 | 331.1 | 268.1 | 168.9 | -37.0% |
| Accounts Receivable | 8.3 | 11.4 | 13.5 | 17.0 | | |
| Accounts Payable | 20.7 | 34.2 | 45.6 | 37.7 | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 18.9 | 22.3 | 17.9% |
| Long Term Debt | 0.0 | 1.2 | 339.0 | 424.2 | 908.6 | 114.2% |
Cash flow
|
|---|
| Capex | 4.4 | 11.6 | 13.7 | 21.4 | 18.4 | -14.1% |
| Acquisitions | | 33.1 | | | | |
Ratios
|
|---|
| Revenue growth | 42.5% | 46.7% | 41.8% | 26.1% | 29.9% | |
| EBITDA growth | -9.9% | 7.4% | -54.0% | 232.3% | 183.5% | |
|
|---|
| Gross Margin | 84.4% | 83.7% | 79.0% | 74.1% | 68.1% | -6.1% |
| EBITDA Margin | -13.4% | -9.8% | -3.2% | -8.3% | -18.2% | -9.9% |
| EBIT Margin | -15.2% | -11.7% | -5.1% | -10.5% | |
| SG&A, % of revenue | 63.2% | 59.4% | 51.1% | 51.7% | 55.6% | 3.9% |
| SBC, % of revenue | 9.9% | 11.2% | 12.0% | 14.4% | |
| Net Income Margin | -16.2% | -13.2% | -6.1% | -11.4% | -21.9% | -10.5% |
| CAPEX, % of revenue | 1.5% | 2.7% | 2.3% | 2.8% | 1.9% | -1.0% |
|
|---|
| ROIC | | -994.1% | -12.2% | -14.1% | -21.5% | -7.5% |
| ROE | | | -45.4% | -48.0% | -94.5% | -46.5% |
| Interest expence / Average debt | | 1,215.9% | 1.0% | | | |
People
|
|---|
| Insider ownership | 2.9% | 2.9% | 2.9% | 2.3% | | |
| Employees | 1,248 | 1,728 | 2,133 | 2,562 | | |
| Revenue/Employee, th. $ | 232 | 246 | 283 | 297 | | |
Wix.com Ltd. ($WIX) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 216 | 236 | 254 | 283 | | 24.1% | 27.6% | 29.0% | 37.8% |
| EBITDA | -34 | -50 | -45 | -51 | | - | - | - | - |
| Net Income | -39 | -58 | -57 | -63 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 191 | 174 | 158 | 169 | | -45.0% | -50.4% | -44.0% | -37.0% |
| Short Term Debt | 16 | 17 | 19 | 22 | | 6.3% | 15.8% | 36.5% | 17.6% |
| Long Term Debt | 432 | 439 | 894 | 909 | | 11.3% | 12.1% | 126.2% | 114.3% |
Ratios
|
|---|
| Gross Margin | 71.3% | 70.1% | 68.6% | 63.4% | | -5.7% | -4.9% | -4.4% | -8.6% |
| EBITDA Margin | -15.9% | -21.0% | -17.8% | -18.1% | | -2.1% | -15.6% | -9.2% | -12.2% |
| Net Income Margin | -18.1% | -24.5% | -22.4% | -22.2% | | -0.3% | -15.3% | -13.7% | -11.5% |
Peers in Internet Services & Infrastructure
Below you can find Wix.com Ltd. benchmarking vs. other companies in Internet Services & Infrastructure industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MongoDB, Inc. ($MDB) | - | 55.3% | 63.8% | 60.8% | 57.9% |
| Twilio Inc. ($TWLO) | - | 43.9% | 62.9% | 74.5% | 55.3% |
| Okta, Inc. ($OKTA) | - | 86.6% | 60.0% | 55.6% | 46.8% |
| Limelight Networks, Inc. ($LLNW) | - | 9.6% | 6.1% | 2.5% | 14.7% |
| Crexendo Inc ($CXDO) | - | 11.7% | 16.9% | 21.2% | 13.5% |
| |
|---|
| Median (9 companies) | 20.7% | 10.6% | 16.9% | 12.3% | 13.5% |
|---|
| Wix.com Ltd. ($WIX) | - | 46.7% | 41.8% | 26.1% | 29.9% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 82.6% | 83.4% | 84.2% | 85.3% | 85.8% |
| Okta, Inc. ($OKTA) | 58.1% | 65.1% | 68.5% | 71.6% | 72.8% |
| MongoDB, Inc. ($MDB) | 68.0% | 70.5% | 74.2% | 72.4% | 70.3% |
| Crexendo Inc ($CXDO) | 60.2% | 67.9% | 67.9% | 69.9% | 69.8% |
| GoDaddy Inc. ($GDDY) | 64.4% | 65.3% | 66.4% | 65.6% | 65.1% |
| |
|---|
| Median (9 companies) | 59.2% | 61.7% | 64.9% | 65.9% | 65.1% |
|---|
| Wix.com Ltd. ($WIX) | 84.4% | 83.7% | 79.0% | 74.1% | 68.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 65.2% | 65.0% | 67.1% | 69.2% | 68.8% |
| Akamai Technologies, Inc. ($AKAM) | 33.9% | 27.6% | 29.4% | 39.5% | 41.0% |
| GoDaddy Inc. ($GDDY) | 11.4% | 12.2% | 14.4% | 15.6% | 15.8% |
| Crexendo Inc ($CXDO) | -28.7% | -6.2% | -1.0% | 10.6% | 7.8% |
| Brightcove Inc. ($BCOV) | -0.8% | -8.0% | -3.8% | -2.6% | 5.5% |
| |
|---|
| Median (9 companies) | -2.8% | -1.1% | 16.8% | 3.8% | 5.5% |
|---|
| Wix.com Ltd. ($WIX) | -13.4% | -9.8% | -3.2% | -8.3% | -18.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Akamai Technologies, Inc. ($AKAM) | 13.5% | 16.7% | 14.9% | 19.4% | 22.9% |
| Limelight Networks, Inc. ($LLNW) | 5.7% | 11.2% | 8.2% | 17.3% | 10.9% |
| Crexendo Inc ($CXDO) | 0.0% | 0.0% | 0.1% | 0.5% | 4.5% |
| VeriSign, Inc. ($VRSN) | 2.3% | 4.2% | 3.0% | 3.3% | 3.4% |
| Okta, Inc. ($OKTA) | 4.8% | 3.9% | 2.6% | 5.0% | 2.6% |
| |
|---|
| Median (9 companies) | 4.0% | 4.1% | 3.3% | 3.3% | 2.6% |
|---|
| Wix.com Ltd. ($WIX) | 1.5% | 2.7% | 2.3% | 2.8% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 65.2% | 54.3% | 81.9% | 228.3% | 221.3% |
| Akamai Technologies, Inc. ($AKAM) | 11.9% | 7.9% | 8.2% | 10.8% | 10.9% |
| GoDaddy Inc. ($GDDY) | 2.9% | 2.7% | 4.6% | 6.0% | 8.1% |
| Crexendo Inc ($CXDO) | -114.0% | -44.3% | -10.5% | 35.4% | 7.3% |
| Brightcove Inc. ($BCOV) | -11.3% | -26.9% | -19.0% | -24.8% | -5.2% |
| |
|---|
| Median (9 companies) | -14.9% | -13.2% | 1.4% | -8.6% | -5.2% |
|---|
| Wix.com Ltd. ($WIX) | - | -994.1% | -12.2% | -14.1% | -21.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Limelight Networks, Inc. ($LLNW) | - | -1.7x | -1.8x | -0.4x | 5.7x |
| GoDaddy Inc. ($GDDY) | 2.3x | 6.8x | 3.9x | 3.4x | 4.9x |
| Akamai Technologies, Inc. ($AKAM) | 0.4x | 0.5x | 0.7x | 2.0x | 1.8x |
| VeriSign, Inc. ($VRSN) | 2.2x | 2.6x | 1.8x | 1.5x | 1.6x |
| Brightcove Inc. ($BCOV) | - | - | - | - | -2.6x |
| |
|---|
| Median (6 companies) | 2.2x | 4.5x | 1.4x | 1.5x | 1.7x |
|---|
