UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 |
☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Exact name of Registrant as Specified in Its Charter)
(Jurisdiction of Incorporation or Organization)
Tel Aviv, 6350671 Israel
(Address of Principal Executive Offices)
Chief Legal Officer
Telephone: +972 (3) 545-4900
Wix.com Ltd.
40 Namal Tel Aviv St.
Tel Aviv, 6350671 Israel
(Name, telephone, e-mail and/or facsimile number and address of company contact person)
Title of each class | Trading Symbol | Name of each exchange on which registered |
Ordinary shares, par value NIS 0.01 per share | WIX | The NASDAQ Stock Market LLC |
Large accelerated filer ☒ | Accelerated filer ☐ | |
Non-accelerated filer ☐ | Emerging growth company ☐ |
U.S. GAAP ☒ | International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ | Other ☐ |
2 | |
3 | |
5 | |
5 | |
5 | |
5 | |
66 | |
90 | |
90 | |
112 | |
140 | |
144 | |
144 | |
145 | |
160 | |
162 | |
162 | |
162 | |
162 | |
163 | |
164 | |
164 | |
165 | |
165 | |
165 | |
167 | |
167 | |
167 | |
168 | |
168 | |
168 | |
168 | |
168 |
• | “business solutions” means additional products and services other than Premium Subscriptions that are offered to our users to help them manage and grow their business online, such as communication tools, payment services and marketing products. |
• | “Business Solutions Revenue” or “Business Solutions Bookings” refer to all revenue or bookings, as applicable, generated from business solutions and exclude any revenue or bookings, as applicable, included under Creative Subscriptions Revenue or Bookings, as applicable. |
• | “Bookings” or “bookings” is a non-GAAP financial measure calculated by adding the change in deferred revenues and the change in unbilled contractual obligations for a particular period to revenues for the same period. Bookings include cash receipts for premium subscriptions purchased by users as well as cash we collect from Business Solutions, as well as payments due to us under the terms of contractual agreements for which we may not yet have received payment. |
• | “Creative Subscriptions Revenue” or “Creative Subscriptions Bookings” refer to revenue or bookings, as applicable, generated from premium subscriptions, including premium subscriptions bundled with vertical solutions and domain name subscriptions and exclude any revenue or bookings, as applicable, included under Business Solutions Revenue or Bookings, as applicable. Our total revenue is comprised of Business Solutions Revenue and Creative Subscriptions Revenue. Our total bookings is comprised of Business Solutions Bookings and Creative Subscriptions Bookings. |
• | “Partners” or “partners” means agencies, independent design professionals, web design, development professionals, and other third parties, who either act as resellers of our solutions to their customers or use our platform to provide website building and maintenance services to their customers, while further customizing our solutions to suit the needs of their customers. |
• | “Premium Subscribers” or “premium subscribers” means users who have purchased a Premium Subscription. |
• | “Premium Subscriptions” or “premium subscriptions” means our main monthly, yearly and multi-year paid subscription plans for online presence solutions purchased by a Registered User. |
• | “Users,” “users,” “Registered Users,” or “registered users” means all individuals or entities that have registered with Wix, as identified by a unique email address provided by such individual or entity. |
• | our expectation that we will be able to attract and retain registered users and generate new premium subscriptions; |
• | our expectation that we will be able to increase the revenue we derive from the sale of premium subscriptions and business solutions, through our partners; |
• | our expectation that new products and developments, as well as third-party products we will offer in the future within our platform, will receive customer acceptance and satisfaction, including the growth in market adoption of our online commerce solutions; |
• | our assumption that historical user behavior can be extrapolated to predict future user behavior; |
• | our prediction of the future revenues generated by our user cohorts and our ability to maintain and increase such revenue growth; |
• | our expectation to maintain and enhance our brand and reputation; |
• | our expectation that we will effectively execute our initiatives to scale and improve our user support function through our Customer Care team, and thereby increase user retention, user engagement and sales; |
• | our expectation that our products created for markets outside of North America will continue to generate growth in those markets; |
• | our plans to successfully localize our products, including by making our product, support and communication channels available in additional languages and to expand our payment infrastructure to transact in additional local currencies and accept additional payment methods; |
• | our expectations regarding the extent of the impact on our business and operations of the COVID-19 pandemic, including uncertainty relating to expected consumer dynamics after the COVID-19 pandemic subsides, the effectiveness of government policies, vaccine administration rates and other factors; |
• | our expectation regarding the impact of fluctuations in foreign currency exchange rates on our business; |
• | our expectations relating to the repurchase of our ordinary shares and/or Convertible Notes pursuant to our expected repurchase program; |
• | our expectation that we will effectively manage the growth of our infrastructure; |
• | changes we expect may occur to technologies used in our solutions; |
• | our expectations regarding the outcome of any regulatory investigation or litigation, including class actions; |
• | our expectations regarding future changes in our cost of revenues and our operating expenses on an absolute basis and as a percentage of our revenues; |
• | our expectations regarding changes in the global, national, regional or local economic, business, competitive, market, and regulatory landscape, including as a result of COVID-19 and as a result of the military invasion of Ukraine by Russia; |
• | our planned level of capital expenditures and our belief that our existing cash and cash from operations will be sufficient to fund our operations for at least the next 12 months and for the foreseeable future; |
• | our expectations with respect to the integration and performance of acquisitions; |
• | our ability to attract and retain qualified employees and key personnel; and |
• | our expectations about entering into new markets and attracting new customer demographics, including our ability to successfully attract new partners and grow our partner activities as anticipated. |
• | We may be unable to generate new premium subscriptions, retain existing premium subscriptions or increase the adoption of our business solutions. |
• | Our selling and marketing activities may fail to generate new registered users or fail to increase the revenue we generate from premium subscriptions to the levels we anticipate. |
• | We may be unable to maintain and enhance our brand or maintain a consistently high level of customer care. |
• | We may be unable to generate significant revenues from sources other than our premium subscriptions. |
• | We are subject to risks associated with international operations, risks related to the impact of the military invasion of Ukraine by Russia, and may be unable to localize our platform on an international scale. |
• | We are exposed to risks associated with payment processing and the provision of financial services. |
• | We are uncertain as to the impact of the COVID-19 pandemic on our users. |
• | We may be subject to adverse impacts of exchange rate fluctuations. |
• | We may be susceptible to failures of our third-party hardware, software and infrastructure, including third-party data center hosting facilities, and any failure to protect against cyber-attacks. |
• | We may fail to manage the growth of our infrastructure and headcount effectively or fail to expand our infrastructure into additional geographic locations. |
• | We may be unable to achieve profitability in the future. |
• | Our ability to attract users may be limited if search engines and social networking sites change their listings or policies regarding advertising or data sharing. |
• | The small business market for our solutions may be less lucrative than projected or we may fail to effectively acquire and service small business users. |
• | Our relatively short operating history in a developing market and our increasing efforts to sell to new customer demographics, might make it difficult to evaluate our business. |
• | Trends in sales are not immediately reflected in full in our operating results because we recognize revenues from premium subscriptions over the term of an agreement. |
• | Our cash balances and investment portfolio have been, and may continue to be, adversely affected by market conditions, including inflation and interest rates. |
• | Our Convertible Notes may impact our financial results and dilute existing shareholders, and we may fail to raise the funds to settle conversions of the Convertible Notes. |
• | We may be unable to raise capital to pursue our growth strategy. |
• | Our acquisitions and investments may not perform as expected. |
• | We may fail to develop and introduce new products and services, or keep up with rapid changes in design and technology. |
• | We may be unable to hire, integrate and retain highly skilled personnel. |
• | We may be unable to attract a more diverse customer base such as partners, mid-size, large and enterprise level companies, design professionals and tech savvy users, for which we have developed more customized solutions. |
• | We may face increased competition in a highly competitive market. |
• | We may be unable to maintain market share for mobile sites and applications. |
• | The demand for our solutions and platform could decline if we do not maintain compatibility with third-party applications. |
• | Changes to technologies used in our solutions or upgrades of operating systems and Internet browsers may impact integration and the process by which users interface with our platform. |
• | The security of the data we store in our systems, including personal information or business data of our users and their users, may be breached or otherwise subjected to unauthorized access. |
• | We may fail to comply with data privacy and protection laws and regulations, as well as our contractual data privacy and security obligations, and the use and adoption of our services may be limited due to growing awareness of data privacy and protection laws. |
• | The use of our products may be impacted by consumer protection laws and standards of conduct implemented by private organizations. |
• | We may be unable to obtain, maintain and protect our intellectual property rights, and may be subject to claims (i) by third parties of intellectual property infringement, (ii) claims by our contractors or employees for remuneration or royalties for assigned service invention rights and (iii) claims challenging the use of open source software and/or compliance with open source license terms. |
• | We may be affected by the enactment of new governmental regulations regarding the Internet, which could hinder growth in the use of the Internet and increase our costs of doing business. |
• | We may be liable, as a provider of online services, for the activities of our registered users or the content of their websites. |
• | We could face liability from disputes over registration and transfer of domain names. |
• | Trade and economic sanctions and export laws may restrict our business. |
• | Changes in tax laws could adversely affect our tax position and financial results, and U.S. states and/or other jurisdictions in which we conduct our business may seek to impose taxes on Internet sales. |
• | We would be adversely affected if we were deemed to be an investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). |
• | We could be adversely affected by violations of anti-bribery laws. |
• | Our share price may be volatile and may fluctuate substantially, including due to (i) any failure to meet financial guidance or repurchase our ordinary shares pursuant to our anticipated repurchase program, (ii) sales of our ordinary shares by directors, officers or large shareholders, (iii) actions of activist shareholders, (iv) our ability to maintain our foreign private issuer status, (v) risks of being treated as a controlled foreign corporation or passive foreign investment company for US federal income tax purposes and (vi) provisions of Israeli law and our articles of association that may delay, prevent or make undesirable an acquisition of all or a significant portion of our shares or assets. |
• | Conditions in Israel could materially and adversely affect our business, including (i) the obligations of personnel to perform military service, (ii) differences in Israeli law compared to laws of other jurisdictions, (iii) the continued availability of local tax benefits and (iv) difficulties enforcing a U.S. judgment against us or assert U.S. securities laws claims in Israel. |
• | the quality and design of our platform compared to other similar solutions and services; |
• | our ability to develop the required new technologies or offer new and relevant products and service offerings to our users; |
• | a reduction in our users’ spending levels or desire to create a web presence, including due to macro-economic forces including rising levels of inflation or other global circumstances beyond our control, such as the effects of the COVID-19 pandemic; |
• | a shift away from online commerce as restrictions imposed in connection with the COVID-19 pandemic are lifted; |
• | our ability to attract and retain partners to sell our premium subscriptions and/or create websites for their customers on our platform, including through our efforts to develop additional product functionality and administrative back-office capabilities to allow our partners to adequately sell our products to their customers and properly manage their operations; |
• | pricing decisions we implement for our solutions, and the pricing of our solutions and services compared to our competitors; |
• | our ability to bundle certain solutions into an attractive subscription package and the variety of the subscription packages and business solutions we offer; |
• | the reliability and availability of our Customer Care and account management services to provide the proper support required by our registered users and partners; |
• | the ability of our Customer Care team to increase sales of premium subscriptions and business solutions to our users; |
• | the perceived or actual security, integrity, reliability, quality or compatibility problems with our solutions, including those related to system outages, unscheduled downtime, diminished website performance and loading times and the impact of cyber-attacks on our users’ data; |
• | competitive factors affecting the software as a service, or SaaS, business market, including the competitive landscape and the strategies that may be implemented by our competitors and the ease with which a user can switch to a competitor; |
• | unexpected increases in the cost of acquiring new registered users, beyond the year over year increase that we experience due to competition in certain geographies; |
• | our dependence on establishing and maintaining strong brand perception; |
• | our ability to expand into new geographic markets and localize our services, including our ability to make our product, support and communication channels available in additional languages and make our solution compliant with local laws and regulations; and |
• | limitations or restrictions on our ability to bill our registered users on a recurring basis or the manner in which the rebilling is performed. |
• | Any local or global unfavorable media coverage or negative publicity about our industry or our company, including as a result of us taking political positions which may not be seen as favorable to all audiences; |
• | Our ability to continue to provide high-quality, well-designed, useful, reliable, secure, data privacy protective, innovative and relevant solutions and services, which we may not do successfully or may not do as successfully as our competitors; |
• | Introduction of new solutions or terms of use that users do not like; |
• | The ability of our Customer Care team to provide customer support to our users at a highly professional level; |
• | Our international branding efforts may prove unsuccessful due to language barriers, an unfamiliar regulatory landscape, and cultural differences, and we may therefore be unsuccessful in establishing strong brand adoption in new markets and geographic locations; |
• | Negative experiences our users have with using third-party applications and websites integrated with Wix, including through our App Market, including if they do not meet users’ expectations of quality, data privacy or security; |
• | A portion of our partners customarily builds websites for their customers using our platform and may fail to do so successfully or to the satisfaction of their customers, which may harm our brand and reputation; |
• | Certain third-party providers that our users rely on, may discontinue their engagement with us, which could have an adverse effect on our reliability and reputation; |
• | Errors, defects, disruptions, security vulnerabilities, abuse of our system, or other performance problems with our products and platform, including the products and solutions we license from third parties, may harm our reputation and brand and adversely affect our ability to attract new users and premium subscribers, especially if these errors occur when we introduce new services or features, all of which may reduce our revenues; |
• | If our social media advertisements are unappealing to certain audiences or are showcased within content that is unappealing to users, or if we remove or fail to remove content that may or may not be perceived as offensive or controversial to certain audiences, our brand and reputation may be harmed; |
• | If we are unable to block fraudulent users from conducting their business on our platform or if we fail in blocking illegal activity, such as money laundering or drug trafficking, from taking place on our platform, our reputation and our results of operations, in particular in our online commerce offering may be harmed; and |
• | If users, partners, or third parties with whom we work violate applicable laws or our policies, those violations could result in other liabilities for us and could harm our business. Such violations may also negatively impact our reputation and brand in ways that could cause additional harm to our business, for example creating a negative consumer or regulatory perception around the use of our products. |
• | difficulties related to contract enforcement, including our terms of use; |
• | compliance with foreign laws and regulations applicable to cross-border operations including export controls; |
• | customization of our services and business solutions to be compliant with local laws and regulations applicable to our users and their customers; |
• | monitoring changes and addressing conflicting laws in areas such as consumer protection, anti-money laundering and copyright; |
• | lower levels of internet use in certain geographical locations; |
• | data privacy and data localization laws that may require, for example, that user data and data of our users’ consumers be stored and processed in a designated territory; |
• | tax consequences, including the complexities of foreign value-added tax (or other tax) systems and restrictions on the repatriation of earnings; |
• | personnel culture differences and varying economic and political climates such as the military invasion of Ukraine by Russia; |
• | currency exchange rates and restrictions related to foreign exchange controls; |
• | different sources of competition; |
• | uncertainties and instability in European and global markets and increased regulatory costs and challenges and other adverse effects caused by the United Kingdom’s withdrawal from the European Union; |
• | different customer spending levels, in particular in light of the ongoing COVID-19 pandemic, rising inflation and other global economic trends; and |
• | lower levels of credit card use, access to online payment methods, and increased payment risks. |
• | if our users are unable to collect payments from their users, we could lose revenues or cause our users to lose revenues which could harm our business and reputation; |
• | if we are unable to maintain our chargeback rate at acceptable levels, in particular during turbulent economic times, our credit card fees for chargeback transactions or our fees for other credit and debit card transactions or issuers may increase, issuers may terminate their relationship with us, or we may face fines from the issuers; |
• | increased costs and diversion of management time and effort and other resources to deal with user onboarding and fraudulent transactions or chargeback disputes, which may increase in an economic downturn if users become insolvent, bankrupt or otherwise unable to fulfill their commitments; |
• | potential fraudulent or otherwise illegal activity by our users, their users, developers, employees or third parties, which could lead to increased liability, in particular with respect to our Wix Payments operations; |
• | our reliance on third parties such as gateways, payment service providers and acquiring banks, which may face down time and thus affect our cash flow; |
• | restrictions on funds or required reserves related to payments; and |
• | additional disclosure requirements, including new reporting regulations and new credit card associated rules. |
• | diversion of management’s time and focus from operating our business; |
• | an inability to achieve synergies as planned; |
• | potential incompatibility of corporate cultures; |
• | implementation or remediation of controls, procedures and policies of the acquired company; |
• | coordination of product, engineering and selling and marketing functions; |
• | retention of employees from the acquired company; |
• | liabilities that are larger than we currently anticipate and unforeseen increased expenses or delays associated with acquisitions, including transition costs to integrate acquired businesses that may exceed the costs that we currently anticipate; |
• | difficulties and additional expenses associated with supporting legacy services and products; |
• | litigation or other claims arising in connection with the acquired company; |
• | the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries; |
• | the use of resources that are needed in other parts of our business; |
• | the use of substantial portions of our available cash to consummate the acquisition; |
• | share-based dilution as a result of equity grants to new hires of our acquired companies; |
• | incurrence of acquisition-related costs; and |
• | unrealistic goals or projections for the acquisition. |
• | the liability of online service providers for actions by customers, including fraud, illegal content, spam, phishing, libel and defamation, hate speech, infringement of third-party intellectual property and other abusive conduct; |
• | other claims based on the nature and content of Internet materials; |
• | user data privacy and security issues; |
• | consumer protection risks; |
• | competition laws; |
• | digital marketing aspects; |
• | taxation laws; |
• | our ability to automatically renew the premium subscriptions of our users; |
• | cross-border e-commerce issues; and |
• | ease of access by our users to our platform. |
• | the terms of the Registrar Accreditation Agreement, or RAA, under which we are accredited as a registrar, could change in ways that are disadvantageous to us or under certain circumstances could be terminated by ICANN, thereby preventing us from operating our registrar service, or ICANN could adopt unilateral changes to the RAA that are unfavorable to us and inconsistent with our current or future plans, or that affect our competitive position; |
• | international regulatory or governing bodies, such as the International Telecommunications Union, a specialized agency of the United Nations, or the EU, may gain increased influence over the management and regulation of the domain name registration system, leading to increased regulation and oversight; and |
• | ICANN or any third-party registries may implement policy changes impacting our ability to operate as a domain name registrar. |
• | actual or anticipated fluctuations in our and our competitors’ results of operations; |
• | variance in our and our competitors’ financial performance from the expectations of market analysts; |
• | announcements by us or our competitors or other global corporations of significant business developments, changes in service provider relationships, acquisitions or expansion plans; |
• | announcements of technological innovations by us or our competitors; |
• | changes in the prices of our solutions; |
• | developments concerning our involvement in litigation, including regarding intellectual property rights; |
• | breaches of security or privacy incidents, and the costs associated with any such incidents and remediation; |
• | our sale or purchase of ordinary shares or other securities in the future, or such sales by our significant shareholders; |
• | market conditions in our industry; |
• | changes in key personnel; |
• | the trading volume of our ordinary shares; |
• | short selling activities; |
• | changes in the estimation of the future size and growth rate of our markets; and |
• | general economic and market conditions or other global circumstances beyond our control, such as the effects of COVID-19 or the current military invasion of Ukraine by Russian armed forces. |
• | the composition of our board of directors which has the authority to direct our business and to appoint and remove our officers; |
• | approving or rejecting a merger, consolidation or other business combination; |
• | raising future capital; and |
• | amending our articles of association which govern the rights attached to our ordinary shares. |
• | Israeli corporate law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares in a company are purchased; |
• | Israeli corporate law does not allow public companies to adopt shareholder resolutions by written consent, thereby requiring all shareholder actions to be taken at a general meeting of shareholders; |
• | our articles of association divide our directors into three classes each of which is elected once every three years; |
• | our articles of association generally require a vote of the holders of a majority of our outstanding ordinary shares entitled to vote at a general meeting of shareholders and voting in person or by proxy at the meeting, and the amendment of a limited number of provisions, such as the provision dividing our directors into three classes or the removal of a director, requires a vote of the holders of 662/3% of our outstanding ordinary shares entitled to vote at a general meeting and voting in person or by proxy at the meeting; |
• | our articles of association require that director vacancies may only be filled by our board of directors; and |
• | our articles of association prevent “business combinations” with “interested shareholders” for a period of three years after the date of the transaction in which the person became an interested shareholder, unless the business combination is approved in accordance with our articles of association by a general meeting of our shareholders or satisfies other requirements specified in our articles of association. |
B. | Business Overview |
A marketing tool that allows businesses to run dynamic online ad campaigns that reach customers they want to target on online ad platforms such as Facebook.
• | DIY template-based and other website design companies that enable website creation such as Squarespace, Weebly (acquired by Block, Inc.), Jimdo and Webflow, Inc.; |
• | offerings that provide e-commerce software enabling a merchant to sell goods online such as Shopify and BigCommerce; |
• | software that enables a business to take and manage appointments and/or reservation schedules online, such as Mindbody; |
• | content management systems that help users build and manage content for a website such as WordPress.org and Drupal; and |
• | solutions that help businesses market themselves online such as search engine marketing, or SEM, and SEO providers, e-mail marketing solutions and online directory listing services. |
Year Ended December 31, | ||||||||
2020 | 2021 | |||||||
North America | 58 | % | 58 | % | ||||
Europe | 25 | 26 | ||||||
Latin America | 5 | 4 | ||||||
Asia and Others | 12 | 12 | ||||||
Total | 100 | % | 100 | % |
Year Ended December 31, | ||||||||||||||||
2020 | 2021 | |||||||||||||||
amount | % of Revenues | amount | % of Revenues | |||||||||||||
(In USD thousands) | ||||||||||||||||
Revenues | ||||||||||||||||
Creative Subscriptions | 783,456 | 79.6 | % | 950,299 | 74.8 | % | ||||||||||
Business Solutions | 200,911 | 20.4 | % | 319,358 | 25.2 | % | ||||||||||
Total | 984,367 | 100.0 | % | 1,269,657 | 100.0 | % | ||||||||||
Cost of revenues | ||||||||||||||||
Creative Subscriptions | 167,539 | 17.0 | % | 232,619 | 18.3 | % | ||||||||||
Business Solutions | 145,480 | 14.8 | % | 255,960 | 20.2 | % | ||||||||||
Total | 313,019 | 31.8 | % | 488,579 | 38.5 | % | ||||||||||
Gross profit | 671,348 | 68.2 | % | 781,078 | 61.5 | % | ||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 320,278 | 32.5 | % | 424,937 | 33.5 | % | ||||||||||
Selling and marketing | 438,210 | 44.5 | % | 512,027 | 40.3 | % | ||||||||||
General and administrative | 111,915 | 11.4 | % | 169,648 | 13.4 | % | ||||||||||
Total operating expenses | 870,403 | 88.4 | % | 1,106,612 | 87.2 | % | ||||||||||
Operating loss | (199,055 | ) | (20.2 | )% | (325,534 | ) | (25.6 | )% | ||||||||
Financial income, net | 47,059 | 4.8 | % | 271,943 | 21.4 | % | ||||||||||
Other income | 118 | — | % | 584 | — | % | ||||||||||
Loss before taxes on income | (151,878 | ) | (15.4 | )% | (53,007 | ) | (4.2 | )% | ||||||||
Taxes on income | 14,989 | 1.5 | % | 64,202 | 5.1 | % | ||||||||||
Net loss | (166,867 | ) | (17.0 | )% | (117,209 | ) | (9.2 | )% |
Year Ended December 31, | ||||||||
2020 | 2021 | |||||||
(in USD thousands) | ||||||||
Reconciliation of Creative Subscriptions Revenue to bookings: | ||||||||
Creative Subscriptions Revenue | 783,456 | 950,299 | ||||||
Change in long-term and short-term deferred revenue | 107,784 | 70,775 | ||||||
Change in unbilled contractual obligations | — | 66,805 | ||||||
Creative Subscriptions Bookings | 891,240 | 1,087,879 |
Year Ended December 31, | ||||||||
2020 | 2021 | |||||||
(in USD thousands) | ||||||||
Reconciliation of Business Solutions Revenue to Bookings: | ||||||||
Business Solutions Revenue | 200,911 | 319,358 | ||||||
Change in long-term and short-term deferred revenue | 9,880 | 11,586 | ||||||
Business Solutions Bookings | 210,791 | 330,944 |
Year Ended December 31, | ||||||||
2020 | 2021 | |||||||
(in USD thousands) | ||||||||
Reconciliation of Revenue to Bookings: | ||||||||
Revenues | 984,367 | 1,269,657 | ||||||
Change in long-term and short-term deferred revenue | 117,664 | 82,361 | ||||||
Change in unbilled contractual obligations | — | 66,805 | ||||||
Bookings | 1,102,031 | 1,418,823 |
Year Ended December 31, | ||||||||
2020 | 2021 | |||||||
(in USD thousands) | ||||||||
Reconciliation of net cash provided by operating activities to free cash flow: | ||||||||
Net cash provided by operating activities | 148,049 | 65,685 | ||||||
Capital expenditures | (18,853 | ) | (37,700 | ) | ||||
Free cash flow | 129,196 | 27,985 |
Year Ended December 31, | ||||||||
2020 | 2021 | |||||||
(in USD thousands) | ||||||||
Net cash provided by operating activities | 148,049 | 65,685 | ||||||
Net cash provided by (used in) investing activities | (800,230 | ) | 376,869 | |||||
Net cash provided by (used in) financing activities | 552,936 | (160,057 | ) |
Name | Age | Position |
Executive Officers | ||
Avishai Abrahami | 50 | Co-founder, Chief Executive Officer, Director and Honorary Chairman |
Lior Shemesh | 52 | Chief Financial Officer |
Nir Zohar | 44 | President and Chief Operating Officer |
Omer Shai | 44 | Chief Marketing Officer |
Yaniv Even-Haim | 47 | Chief Technology Officer |
Eitan Israeli | 54 | Chief Legal Officer |
Shelly Meyer | 56 | Chief People Officer |
Yaniv Vakrat | 52 | Chief Business Officer |
Directors | ||
Mark Tluszcz(4) | 55 | Chairman of the Board |
Deirdre Bigley(1)(2)(3)(4) | 57 | Director |
Allon Bloch(1) (4) | 52 | Director |
Yuval Cohen(2)(4) | 59 | Director |
Diane Greene(4) | 66 | Director |
Ron Gutler(1)(2)(3)(4)(5) | 64 | Director |
Roy Saar(4) | 51 | Director |
Ferran Soriano(4) | 54 | Director |
(1) | Member of our audit committee |
(2) | Member of our compensation committee |
(3) | Member of our nominating and governance committee |
(4) | Independent director under the rules of NASDAQ |
(5) | Lead independent director |
• | the Class I directors are Allon Bloch, Deirdre Bigley and Ferran Soriano, and their terms expire at our annual meeting of shareholders to be held in 2023; |
• | the Class II directors are Yuval Cohen, Ron Gutler and Roy Saar, and their terms expire at our annual meeting of shareholders to be held in 2024; and |
• | the Class III directors are Avishai Abrahami, Diane Greene and Mark Tluszcz, and their terms expire at our annual meeting of shareholders to be held in 2022. |
• | such majority includes at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such appointment, present and voting at such meeting; or |
• | the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such appointment voting against such appointment does not exceed 2% of the aggregate voting rights in the company. |
• | retaining and terminating our independent auditors, subject to board of directors and shareholder ratification; |
• | pre-approval of audit and non-audit services to be provided by the independent auditors; |
• | reviewing with management and our independent director our annual financial reports prior to their submission to the SEC; and |
• | approval of certain transactions with office holders and controlling shareholders, as described below, and other related-party transactions. |
• | reviewing and recommending overall compensation policies with respect to our Chief Executive Officer and other executive officers; |
• | reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers including evaluating their performance in light of such goals and objectives; |
• | reviewing and approving the granting of options and other incentive awards; and |
• | reviewing, evaluating and making recommendations regarding the compensation and benefits for our non-employee directors. |
• | overseeing and assisting our board of directors in reviewing and recommending nominees for election as directors; |
• | assessing the performance of the members of our board of directors; |
• | establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and recommending to our board of directors a set of corporate governance guidelines applicable to our company; and |
• | reviewing and overseeing our strategy, programs, and public disclosure for environmental, social and governance issues. |
• | such majority includes at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such election (other than a personal interest which is not derived from a relationship with a controlling shareholder), present and voting at such meeting; or |
• | the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such election (other than a personal interest which is not derived from a relationship with a controlling shareholder) voting against the approval of the compensation policy does not exceed 2% of the aggregate voting rights in the company. |
• | the knowledge, skills, expertise and accomplishments of the relevant director or executive; |
• | the director’s or executive’s roles and responsibilities and prior compensation agreements with him or her; |
• | the relationship between the cost of the compensation terms offered to the relevant director or executive and the average compensation cost of the other employees of the company, including those employed through manpower companies; |
• | the impact of disparities in salary upon work relationships in the company; |
• | the possibility of reducing variable compensation at the discretion of the board of directors and the possibility of setting a limit on the exercise value of non-cash variable compensation; and |
• | as to severance compensation, the period of service of the director or executive, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company. |
• | the link between variable compensation and long-term performance and measurable criteria; |
• | the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation; |
• | the conditions under which a director or executive would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements; |
• | the minimum holding or vesting period for variable, equity-based compensation while referring to appropriate long-term perspective based incentives; and |
• | maximum limits for severance compensation. |
• | recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years); |
• | recommending to the board of directors periodic updates to the compensation policies; |
• | assessing implementation of the compensation policies; and |
• | determining whether the compensation terms of a proposed new Chief Executive Officer of the company need not be brought to approval of the shareholders. |
• | a person (or a relative of a person) who holds more than 5% of the company’s outstanding shares or voting rights; |
• | a person (or a relative of a person) who has the power to appoint a director or the general manager of the company; |
• | an office holder or director of the company or a relative of such person; or |
• | a member of the company’s independent accounting firm, or anyone on its behalf. |
• | information on the appropriateness of a given action submitted for his or her approval or performed by virtue of his or her position; and |
• | all other important information pertaining to these actions. |
• | refrain from any conflict of interest between the performance of his or her duties in the company and his or her personal affairs; |
• | refrain from any activity that is competitive with the business of the company; |
• | refrain from exploiting any business opportunity of the company in order to receive a personal gain for himself or herself or others; and |
• | disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of his or her position as an office holder. |
• | an amendment to the company’s articles of association; |
• | an increase of the company’s authorized share capital; |
• | a merger; or |
• | interested party transactions that require shareholder approval. |
• | financial liability imposed on him or her in favor of another person pursuant to a judgment, settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the abovementioned events and amount or criteria; |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent. |
• | a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
• | a breach of the duty of care to the company or to a third party, including a breach arising out of the negligent conduct of the office holder; |
• | a financial liability imposed on the office holder in favor of a third party; |
• | a financial liability imposed on the office holder in favor of a third party harmed by a breach in an administrative proceeding; and |
• | reasonable litigation expenses, including attorneys’ fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her. |
• | a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company; |
• | a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder; |
• | an act or omission committed with intent to derive illegal personal benefit; or |
• | a fine or forfeit levied against the office holder. |
As of December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
Department | ||||||||||||
General and administration | 311 | 430 | 538 | |||||||||
Marketing | 608 | 907 | 1,310 | |||||||||
Research and development | 1,552 | 1,923 | 2,349 | |||||||||
Support and call center | 600 | 1,368 | 1,732 | |||||||||
Total | 3,071 | 4,628 | 5,929 |
• | each person or entity known by us to own beneficially more than 5% of our outstanding shares; |
• | each of our directors and executive officers individually; and |
• | all of our executive officers and directors as a group. |
Name of Beneficial Owner | Number of Shares Beneficially Held | Percentage of Class |
Directors and Executive Officers | ||
Avishai Abrahami(1) | 1,935,114 | 3.3% |
Lior Shemesh(2) | 201,899 | * |
Nir Zohar (3) | 746,900 | 1.3% |
Omer Shai(4) | 438,541 | * |
Yaniv Even-Haim(5) | 43,057 | * |
Eitan Israeli (6) | 31,750 | * |
Shelly Meyer (7) | 92,008 | * |
Yaniv Vakrat (8) | 14,000 | * |
Deirdre Bigley (9) | 14,216 | * |
Allon Bloch(9) | 14,679 | * |
Mark Tluszcz (9) | 37,743 | * |
Yuval Cohen(9) | 31,656 | * |
Ron Gutler(9) | 40,053 | * |
Roy Saar(9) | 41,579 | * |
Diane Greene (9) | 7,731 | * |
Ferran Soriano (9) | 4,469 | * |
All executive officers and directors as a group (16 persons) | 3,695,395 | 6.2% |
Principal Shareholders | ||
FMR LLC (10) | 4,504,284 | 7.8% |
BlackRock, Inc. (11) | 4,290,479 | 7.5% |
Flossbach von Storch AG (12) | 4,068,532 | 7.1% |
Baillie Gifford & Co (13) | 3,264,938 | 5.7% |
Material Contract | Location in This Annual Report |
2013 Incentive Compensation Plan | “ITEM 6.B. Directors, Senior Management and Employees – Compensation – 2013 Incentive Compensation Plan.” |
2007 Share Option Plan | “ITEM 6.B. Directors, Senior Management and Employees – Compensation – 2007 Share Option Plan.” |
Compensation Policies | “ITEM 6.C. Directors, Senior Management and Employees – Board Practices – Compensation Policies under the Companies Law.” |
Wix.com Ltd. 2013 Employee Stock Purchase Plan | “ITEM 6.B. Directors, Senior Management and Employees – Compensation – Employee Stock Purchase Plan.” |
Form of Indemnification Agreement | “ITEM 6.C. – Directors, Senior Management and Employees – Board Practices – Exculpation, Insurance and Indemnification of Office Holders.” |
Indenture, dated as of June 26, 2018, by and between Wix.com Ltd. and U.S. Bank National Associate, as Trustee, and Form of 0% Convertible Senior Notes due 2023 | Note 10 to our audited consolidated financial statements included in Item 18 of this annual report. |
Indenture, dated as of August 13, 2020, by and between Wix.com Ltd. and U.S. Bank National Associate, as Trustee, and Form of 0% Convertible Senior Notes due 2025 | Note 10 to our audited consolidated financial statements included in Item 18 of this annual report. |
• | amortization of the cost of a purchased patent, rights to use a patent, and know-how, which are used for the development or advancement of the Industrial Enterprise, over an eight-year period, commencing on the year in which such rights were first utilized; |
• | under limited conditions, an election to file consolidated tax returns with controlled Israeli Industrial Companies; and |
• | expenses related to a public offering are deductible in equal amounts over three years commencing on the year of the offering. |
1. | Investment of at least 7% of income, or at least NIS 75 million (approximately $19 million) in R&D activities; and |
2. | One of the following: |
◦ | At least 20% of the workforce (or at least 200 employees) are employed in R&D; |
◦ | A venture capital investment approximately equivalent to at least $2 million was previously made in the company; or |
◦ | Growth in sales or workforce by an average of 25% over the three years preceding the tax year. |
● | the expenditures are approved by the relevant Israeli government ministry, determined by the field of research; |
● | the research and development must be for the promotion or development of the company; and |
● | the research and development is carried out by or on behalf of the company seeking such tax deduction. |
Change in Average Exchange Rate of the NIS Against the U.S. dollar (%) | |
Period | |
2021 | (6.0) |
2020 | (3.6) |
2019 | (0.9) |
2018 | (0.1) |
2017 | (6.3) |
• | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
2020 | 2021 | |||||||
(in USD thousands) | ||||||||
Audit Fees | 775 | 1,005 | ||||||
Audit-Related Fees | 92 | 200 | ||||||
Tax Fees | 290 | 267 | ||||||
Total | 1,157 | 1,472 |
Period | (a) Total Number of Shares (or Units) Purchased (1) | (b) Average Price per Share (or Units) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1) | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||||||||
January 1 – January 31 | — | $ | — | — | $ | 200,000 | ||||||||||
February 1 – February 28 | — | $ | — | — | $ | 200,000 | ||||||||||
March 1 – March 31 | — | $ | — | — | $ | 200,000 | ||||||||||
April 1 – April 30 | — | $ | — | — | $ | 200,000 | ||||||||||
May 1 – May 31 | — | $ | — | — | $ | 200,000 | ||||||||||
June 1 – June 30 | — | $ | — | — | $ | 200,000 | ||||||||||
July 1 – July 31 | — | $ | — | — | $ | 200,000 | ||||||||||
August 1 - August 31 | 647,465 | $ | 221.70 | 647,465 | $ | 56,460 | ||||||||||
September 1 - September 30 | 247,671 | $ | 227.96 | 247,671 | $ | — | ||||||||||
October 1 – October 31 | — | $ | — | — | $ | — | ||||||||||
November 1- November 30 | — | $ | — | — | $ | — | ||||||||||
December 1 – December 31 | — | $ | — | — | $ | — | ||||||||||
Total | 895,136 | $ | 223.43 | 895,136 | $ | — |
Item 16G. | CORPORATE GOVERNANCE |
Exhibit No. | Description |
101.INS | XBRL Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
104 | Cover Page Interactive Data File (the cover page iXBRL tags are embedded within the Inline XBRL document) |
Date: April 1, 2022 | Wix.com Ltd. By: /s/ AVISHAI ABRAHAMI Avishai Abrahami Co-Founder, Chief Executive Officer and Director |
WIX.COM LTD. AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2021
INDEX
| Page |
Report of Independent Registered Public Accounting Firm (PCAOB ID. No. 1281) | F-2 - F-4 |
F-5 - F-6 | |
F-7 | |
F-8 | |
F-9 - F-10 | |
F-11 - F-59 |
Kost Forer Gabbay & Kasierer 144 Menachem Begin Road, Tel-Aviv 6492102, Israel | Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com |
Kost Forer Gabbay & Kasierer 144 Menachem Begin Road, Tel-Aviv 6492102, Israel | Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com |
Revenue recognition | ||
Description of the Matter | As described in Note 2p to the consolidated financial statements, the Company derives its revenue mainly from subscription fees from customers for access to its platform, which it recognizes ratably over the related contractual term. The Company‘s revenue recognition process involves several applications responsible for the initiation, processing, and recording of transactions from the Company’s various sales channels, and the calculation of revenue in accordance with the Company’s accounting policy. The processing and recognition of revenue are highly automated and involve capturing and processing significant volumes of data. Auditing the Company's accounting for revenue from contracts with customers was challenging and complex due to the high volume of individually-low-monetary-value transactions and the dependency on the effective design and operation of multiple applications, some of which are custom-made for the Company’s business, and data sources associated with the revenue recognition process. | |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s accounting for revenue recognition. For example, with the assistance of IT professionals, we tested the controls over the initiation and billing of new and recurring subscriptions, the provisioning of customers, and the Company’s cash to billings reconciliation process. We also tested the controls related to the key application interfaces between the provisioning, billing, and accounting systems, which included controls related to access to the relevant applications and data, changes to the relevant systems and interfaces, as well as controls over the configuration of the relevant applications. Our audit procedures included, among others, substantive audit procedures that included testing on a sample basis the completeness and accuracy of the underlying data within the Company’s billing system, performing data analytics by extracting data from the system to evaluate the completeness and accuracy of recorded revenue and deferred revenue amounts, tracing a sample of sales transactions to third-party documentation, and testing a sample of cash to billings reconciliations. We also evaluated the Company’s disclosures included in Note 2p to the consolidated financial statements. |
/s/ Kost Forer Gabbay & Kasierer | |
Tel-Aviv, Israel | KOST FORER GABBAY & KASIERER |
April 1, 2022 | A Member of Ernst & Young Global |
Kost Forer Gabbay & Kasierer 144 Menachem Begin Road, Tel-Aviv 6492102, Israel | Tel: +972-3-6232525 Fax: +972-3-5622555 ey.com |
/s/ Kost Forer Gabbay & Kasierer | |
Tel-Aviv, Israel | KOST FORER GABBAY & KASIERER |
April 1, 2022 | A Member of Ernst & Young Global |
WIX.COM LTD. AND ITS SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS | |
U.S. dollars in thousands |
December 31, | ||||||||
2021 | 2020 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | 451,355 | 168,858 | ||||||
Short-term deposits | 411,687 | 577,138 | ||||||
Restricted deposits | 7,012 | 925 | ||||||
Marketable securities | 456,515 | 289,927 | ||||||
Trade receivables | 30,367 | 23,670 | ||||||
Prepaid expenses and other current assets | 32,877 | 40,666 | ||||||
Total current assets | 1,389,813 | 1,101,184 | ||||||
LONG-TERM ASSETS: | ||||||||
Prepaid expenses and other long-term assets | 41,554 | 87,680 | ||||||
Property and equipment, net | 50,437 | 35,863 | ||||||
Marketable securities | 387,341 | 536,877 | ||||||
Intangible assets, net | 40,247 | 19,281 | ||||||
Goodwill | 49,300 | 24,235 | ||||||
Operating lease right-of-use assets | 101,095 | 88,406 | ||||||
Total long-term assets | 669,974 | 792,342 | ||||||
TOTAL ASSETS | 2,059,787 | 1,893,526 |
F - 5
CONSOLIDATED BALANCE SHEETS | |
U.S. dollars in thousands (except share and per share data) |
December 31, | ||||||||
2021 | 2020 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables | $ | 114,584 | $ | 79,881 | ||||
Employees and payroll accruals | 83,251 | 70,814 | ||||||
Deferred revenues | 484,446 | 409,698 | ||||||
Accrued expenses and other current liabilities | 62,816 | 48,769 | ||||||
Operating lease liabilities | 29,201 | 22,336 | ||||||
Total current liabilities | 774,298 | 631,498 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Convertible notes, net | 922,974 | 834,440 | ||||||
Long-term deferred revenues | 59,966 | 50,867 | ||||||
Long-term deferred tax liabilities | 72,803 | 15,343 | ||||||
Other long-term liabilities | 2,267 | 0 | ||||||
Long-term operating lease liabilities | 81,764 | 74,187 | ||||||
Total long-term liabilities | 1,139,774 | 974,837 | ||||||
Total liabilities | 1,914,072 | 1,606,335 | ||||||
Commitments and contingencies | - | - | ||||||
SHAREHOLDERS' EQUITY: | ||||||||
Ordinary shares of NIS 0.01 par value - Authorized: 500,000,000 shares at December 31, 2020 and 2021; Issued 56,027,758 and 58,149,325 shares at December 31, 2020 and 2021, respectively; Outstanding: 56,027,758 and 57,254,189 shares at December 31, 2020 and 2021, respectively | 111 | 107 | ||||||
Additional paid-in capital | 994,795 | 862,134 | ||||||
Treasury Shares at cost, 895,136 ordinary shares | (199,997 | ) | 0 | |||||
Accumulated other comprehensive income (loss) | (1,056 | ) | 9,406 | |||||
Accumulated deficit | (648,138 | ) | (584,456 | ) | ||||
Total shareholders' equity | 145,715 | 287,191 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,059,787 | $ | 1,893,526 |
F - 6
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Revenues | ||||||||||||
Creative Subscription | 950,299 | 783,456 | 644,491 | |||||||||
Business Solutions | 319,358 | 200,911 | 113,176 | |||||||||
1,269,657 | 984,367 | 757,667 | ||||||||||
Cost of Revenues | ||||||||||||
Creative Subscription | 232,619 | 167,539 | 120,905 | |||||||||
Business Solutions | 255,960 | 145,480 | 73,915 | |||||||||
488,579 | 313,019 | 194,820 | ||||||||||
Gross profit | 781,078 | 671,348 | 562,847 | |||||||||
Research and development, net | 424,937 | 320,278 | 250,791 | |||||||||
Selling and marketing | 512,027 | 438,210 | 307,718 | |||||||||
General and administrative | 169,648 | 111,915 | 85,922 | |||||||||
Total operating expenses | 1,106,612 | 870,403 | 644,431 | |||||||||
Operating loss | (325,534 | ) | (199,055 | ) | (81,584 | ) | ||||||
Financial income (expenses), net | 271,943 | 47,059 | (3,621 | ) | ||||||||
Other income | 584 | 118 | 55 | |||||||||
Loss before taxes on income | (53,007 | ) | (151,878 | ) | (85,150 | ) | ||||||
Taxes on income | 64,202 | 14,989 | 2,598 | |||||||||
Net loss | (117,209 | ) | (166,867 | ) | (87,748 | ) | ||||||
Other comprehensive loss: | ||||||||||||
Unrealized gains (loss) from marketable securities, net | (4,701 | ) | 2,916 | 1,167 | ||||||||
Unrealized gains (loss) on cash flow hedge, net | (5,761 | ) | 5,133 | 1,881 | ||||||||
Other comprehensive income (loss) for the year, net | (10,462 | ) | 8,049 | 3,048 | ||||||||
Total comprehensive loss | $ | (127,671 | ) | $ | (158,818 | ) | $ | (84,700 | ) | |||
Basic and diluted net loss per ordinary share | $ | (2.06 | ) | $ | (3.07 | ) | $ | (1.74 | ) |
The accompanying notes are an integral part of the consolidated financial statements.
F - 7
Ordinary shares | Additional paid-in | Treasury | Other comprehensive | Accumulated | Total shareholders' | |||||||||||||||||||||||
Shares | Amount | Capital | Shares | Income (loss) | deficit | Equity | ||||||||||||||||||||||
Balance as of January 1, 2019 | 49,269,626 | 88 | 472,239 | 0 | (1,691 | ) | (329,841 | ) | 140,795 | |||||||||||||||||||
Exercise of options, ESPP shares and vesting of RSUs | 2,256,293 | 6 | 29,368 | 0 | 0 | 0 | 29,374 | |||||||||||||||||||||
Share-based compensation | - | 0 | 109,476 | 0 | 0 | 0 | 109,476 | |||||||||||||||||||||
Other comprehensive loss | - | 0 | 0 | 0 | 3,048 | 0 | 3,048 | |||||||||||||||||||||
Net loss | - | 0 | 0 | 0 | 0 | (87,748 | ) | (87,748 | ) | |||||||||||||||||||
Balance as of December 31, 2019 | 51,525,919 | 94 | 611,083 | 0 | 1,357 | (417,589 | ) | 194,945 | ||||||||||||||||||||
Exercise of options, ESPP shares and vesting of RSUs | 4,501,124 | 13 | 36,096 | 0 | 0 | 0 | 36,109 | |||||||||||||||||||||
Share-based compensation | - | 0 | 147,439 | 0 | 0 | 0 | 147,439 | |||||||||||||||||||||
Equity Component of Convertible senior notes 2025, net | - | 0 | 67,337 | 0 | 0 | 0 | 67,337 | |||||||||||||||||||||
Conversion of Convertible senior notes 2023 | 715 | * | ) | 179 | 0 | 0 | 0 | 179 | ||||||||||||||||||||
Other comprehensive income | - | 0 | 0 | 0 | 8,049 | 0 | 8,049 | |||||||||||||||||||||
Net loss | - | 0 | 0 | 0 | 0 | (166,867 | ) | (166,867 | ) | |||||||||||||||||||
Balance as of December 31, 2020 | 56,027,758 | 107 | 862,134 | 0 | 9,406 | (584,456 | ) | 287,191 | ||||||||||||||||||||
Early adoption of ASU 2020-06 as of January 1, 2021 | - | 0 | (215,712 | ) | 0 | 0 | 53,527 | (162,185 | ) | |||||||||||||||||||
Exercise of options, ESPP shares and vesting of RSUs | 1,560,797 | 5 | 47,446 | 0 | 0 | 0 | 47,451 | |||||||||||||||||||||
Share-based compensation | - | 0 | 221,980 | 0 | 0 | 0 | 221,980 | |||||||||||||||||||||
Treasury Shares | (895,136 | ) | (3 | ) | 0 | (199,997 | ) | 0 | 0 | (200,000 | ) | |||||||||||||||||
Conversion of Convertible senior notes 2023 | 560,770 | 2 | 78,947 | 0 | 0 | 0 | 78,949 | |||||||||||||||||||||
Other comprehensive income | - | 0 | 0 | 0 | (10,462 | ) | 0 | (10,462 | ) | |||||||||||||||||||
Net loss | - | 0 | 0 | 0 | 0 | (117,209 | ) | (117,209 | ) | |||||||||||||||||||
Balance as of December 31, 2021 | 57,254,189 | 111 | 994,795 | (199,997 | ) | (1,056 | ) | (648,138 | ) | 145,715 |
F - 8
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (117,209 | ) | $ | (166,867 | ) | $ | (87,748 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
Depreciation | 13,929 | 14,610 | 12,126 | |||||||||
Amortization of intangible assets | 4,952 | 2,577 | 4,588 | |||||||||
Share based compensation expenses | 221,391 | 147,313 | 109,337 | |||||||||
Amortization of debt discount and debt issuance costs | 5,298 | 29,954 | 20,938 | |||||||||
Changes in accrued interest and exchange rate on short-term and long-term deposits | (20 | ) | (43 | ) | 748 | |||||||
Amortization of premium, discount and accrued interest on marketable securities, net | 7,843 | 4,471 | (346 | ) | ||||||||
Remeasurement gain on Marketable equity | (166,323 | ) | 0 | 0 | ||||||||
Deferred taxes, net | 54,454 | 12,089 | 935 | |||||||||
Changes in operating lease right-of-use assets | 28,441 | 17,867 | 18,225 | |||||||||
Changes in operating lease liabilities | (26,688 | ) | (15,807 | ) | (15,376 | ) | ||||||
Increase in trade receivables | (6,250 | ) | (6,457 | ) | (3,459 | ) | ||||||
Increase in prepaid expenses and other current and long-term assets | (98,468 | ) | (89,386 | ) | (5,168 | ) | ||||||
Increase (decrease) in trade payables | 26,595 | 41,967 | (7,560 | ) | ||||||||
Increase in employees and payroll accruals | 19,391 | 25,326 | 7,781 | |||||||||
Increase in short-term and long-term deferred revenues | 82,361 | 117,664 | 74,818 | |||||||||
Increase in accrued expenses and other current and long-term liabilities | 15,988 | 12,771 | 19,725 | |||||||||
Net cash provided by operating activities | 65,685 | 148,049 | 149,564 | |||||||||
Cash flows from investing activities: | ||||||||||||
Proceeds from short-term and restricted deposits | 732,015 | 294,225 | 348,775 | |||||||||
Investment in short-term and restricted deposits | (572,631 | ) | (577,000 | ) | (296,100 | ) | ||||||
Investment in marketable securities | (29,377 | ) | (763,581 | ) | (402,774 | ) | ||||||
Proceeds from marketable securities | 312,201 | 277,335 | 132,905 | |||||||||
Purchase of property and equipment and payment of prepaid expenses | (35,770 | ) | (18,403 | ) | (21,427 | ) | ||||||
Capitalization of internal use of software | (1,930 | ) | (450 | ) | (639 | ) | ||||||
Payments for businesses acquired, net of acquired cash | (42,729 | ) | (6,626 | ) | 0 | |||||||
Proceed from equity securities | 18,771 | 0 | 0 | |||||||||
Purchases of investments in privately held companies | (3,681 | ) | (1,185 | ) | (3,862 | ) | ||||||
Proceeds from realization of investments in privately held company | 0 | 1,098 | 0 | |||||||||
Investment in other long-term assets | 0 | (5,643 | ) | (891 | ) | |||||||
Net cash provided by (used in) investing activities | 376,869 | (800,230 | ) | (244,013 | ) |
F - 9
CONSOLIDATED STATEMENTS OF CASH FLOWS | |
U.S. dollars in thousands |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from issuance of convertible senior notes | 0 | 575,000 | 0 | |||||||||
Payments of debt issuance costs | 0 | (15,713 | ) | 0 | ||||||||
Purchase of capped call | 0 | (46,000 | ) | 0 | ||||||||
Purchase of treasury shares | (200,000 | ) | 0 | 0 | ||||||||
Proceeds from exercise of options and ESPP shares | 39,943 | 39,649 | 31,495 | |||||||||
Net cash provided by (used in) financing activities | (160,057 | ) | 552,936 | 31,495 | ||||||||
Increase (decrease) in cash and cash equivalents | 282,497 | (99,245 | ) | (62,954 | ) | |||||||
Cash and cash equivalents at the beginning of the year | 168,858 | 268,103 | 331,057 | |||||||||
Cash and cash equivalents at the end of the year | $ | 451,355 | $ | 168,858 | $ | 268,103 | ||||||
Supplemental disclosure of cash flow activities: | ||||||||||||
Cash paid during the year for taxes | $ | 6,523 | $ | 5,810 | $ | 3,109 | ||||||
Interest received during the year | $ | 20,154 | $ | 18,647 | $ | 18,996 | ||||||
Supplemental information for non-cash transactions | ||||||||||||
Right-of-use asset recognized with corresponding lease liability | $ | 41,130 | $ | 29,137 | $ | 46,121 | ||||||
Non-cash purchase of property and equipment | $ | 9,324 | $ | 1,007 | $ | 1,232 | ||||||
Conversion of Convertible Notes | $ | 78,949 | $ | 179 | $ | 0 |
WIX.COM LTD. AND ITS SUBSIDIARIES |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
U.S. dollars in thousands (except share and per share data) |
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
a. | Use of estimates: |
b. | Principles of consolidation: |
F - 11
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
c. | Foreign currency translation and transactions: |
d. | Cash and cash equivalents: |
e. | Short-term deposits: |
f. | Restricted deposits: |
F - 12
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
g. | Marketable securities: |
F - 13
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
h. | Property and equipment, net: |
% | ||
Computers, peripheral equipment and electronic equipment | 15 - 33 (mainly 33) | |
Internal use software | 33 | |
Office furniture and equipment | 6 - 14 (mainly 6) | |
Vehicles | 15 | |
Leasehold improvements | Over the shorter of the related lease period or the life of the asset |
i. | Business combinations: |
F - 14
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
j. | Goodwill and intangible assets: |
Technology | 7-8 years | |
Customer relations | 4 -15 years | |
Customer data | 15 years | |
Non-Competition agreement | 3 years | |
Domain | 7 years | |
Distribution agreement | 1.5 years |
F - 15
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
k. | Investments in privately held companies: |
F - 16
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
l. | Derivatives instruments: |
F - 17
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
m. | Severance pay: |
n. | U.S. employees defined contribution plan: |
F - 18
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
o. | Convertible Senior Notes: |
p. | Revenue recognition: |
F - 19
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Payments received in advance of the Company’s performance are recorded as deferred revenues, which represent a contract liability.
F - 20
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
F - 21
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
The Company’s remaining performance obligations represent revenue that has not yet been recognized and include deferred revenue and unbilled amounts that will be recognized as revenue in future periods.
As of December 31, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $611,217. As of December 31, 2021, the Company expects to recognize 79% of its remaining performance obligations as revenue over the next 12 months, and the remainder thereafter.
q. | Costs to obtain contracts: |
r. | Cost of revenues: |
s. | Research and development costs: |
F - 22
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
t. | Internal use software costs: |
u. | Selling and marketing: |
v. | Share-based compensation: |
F - 23
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
w. | Income taxes: |
F - 24
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
x. | Legal contingencies: |
y. | Basic and diluted net loss per share: |
z. | Treasury shares: |
aa. | Concentration of credit risks: |
F - 25
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
ab. | Fair value of financial instruments: |
The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), that defines fair value and establishes a framework for measuring and disclosing fair value. Fair value is based on the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures certain financial assets and liabilities at fair value based on applicable accounting guidance using a fair value hierarchy, which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value.
Level 1 - | Quoted prices in active markets for identical assets or liabilities. |
Level 2 - | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
Level 3 - | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
ac. | Government grants: |
F - 26
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
ad. | Leases: |
F - 27
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
ae. | Accounting pronouncements adopted in the year: |
1. | In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40). Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under ASC 815, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. The guidance also requires the if-converted method to be applied for all convertible instruments when calculating earnings per share. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. Adoption of the standard requires using either a modified retrospective or a full retrospective approach. |
2. | In October 2021, the FASB issued ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the (1) recognition of an acquired contract liability and (2) payment terms and their direct effect on subsequent revenue recognized by the acquirer. The updates are effective for annual periods beginning after December 15, 2022, including interim periods within those periods. Early adoption is permitted, including the adoption in an interim period. The Company early adopted this ASU prospectively, as of January 1, 2021, with no material impact on its consolidated financial statements and related disclosures. |
F - 28
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
af. | Prior-period financial statements correction of immaterial errors: |
Year Ended December 31, 2020 | ||||||||||||
As Previously Reported | Adjustment | As Revised | ||||||||||
Total Revenues | $ | 988,760 | $ | (4,393 | ) | $ | 984,367 | |||||
Total cost of revenue | 315,699 | (2,680 | ) | 313,019 | ||||||||
Gross Profit | 673,061 | (1,713 | ) | 671,348 | ||||||||
Operating loss | (197,342 | ) | (1,713 | ) | (199,055 | ) | ||||||
Loss before taxes | (150,165 | ) | (1,713 | ) | (151,878 | ) | ||||||
Net loss | (165,154 | ) | (1,713 | ) | (166,867 | ) | ||||||
Basic and diluted net loss per shares | $ | (3.03 | ) | $ | (0.04 | ) | $ | (3.07 | ) |
Year Ended December 31, 2019 | ||||||||||||
As Previously Reported | Adjustment | As Revised | ||||||||||
Total Revenues | $ | 761,088 | $ | (3,421 | ) | $ | 757,667 | |||||
Total cost of revenue | 196,907 | (2,087 | ) | 194,820 | ||||||||
Gross Profit | 564,181 | (1,334 | ) | 562,847 | ||||||||
Operating loss | (80,250 | ) | (1,334 | ) | (81,584 | ) | ||||||
Loss before taxes | (83,816 | ) | (1,334 | ) | (85,150 | ) | ||||||
Net loss | (86,414 | ) | (1,334 | ) | (87,748 | ) | ||||||
Basic and diluted net loss per shares | $ | (1.71 | ) | $ | (0.03 | ) | $ | (1.74 | ) |
F - 29
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
December 31, 2021 | ||||||||||||||||
Fair value measurements using input type | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Financial assets: | ||||||||||||||||
Money market funds | $ | 189,437 | $ | 0 | $ | 0 | $ | 189,437 | ||||||||
Marketable securities | 312,934 | 530,922 | 0 | 843,856 | ||||||||||||
Foreign currency derivatives presented as contracts assets | 0 | 3,546 | 0 | 3,546 | ||||||||||||
Financial liabilities: | ||||||||||||||||
Foreign currency derivatives presented as contracts liabilities | 0 | (2,677 | ) | 0 | (2,677 | ) | ||||||||||
$ | 502,371 | $ | 531,791 | $ | 0 | $ | 1,034,162 |
F - 30
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
December 31, 2020 | ||||||||||||||||
Fair value measurements using input type | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Financial assets: | ||||||||||||||||
Money market funds | $ | 20,656 | $ | 0 | $ | 0 | $ | 20,656 | ||||||||
Marketable securities | 0 | 826,804 | 0 | 826,804 | ||||||||||||
Foreign currency derivatives presented as contracts assets | 0 | 7,083 | 0 | 7,083 | ||||||||||||
Financial liabilities: | ||||||||||||||||
Foreign currency derivatives presented as contracts liabilities | 0 | (1,961 | ) | 0 | (1,961 | ) | ||||||||||
$ | 20,656 | $ | 831,926 | $ | 0 | $ | 852,582 |
December 31, | ||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||||||||||||||
LESS THAN A YEAR | ||||||||||||||||||||||||||||||||
Government and corporate debentures - fixed interest rate | $ | 196,408 | $ | 583 | $ | (49 | ) | $ | 196,942 | $ | 244,434 | $ | 526 | $ | (48 | ) | $ | 244,912 | ||||||||||||||
Government-sponsored enterprises | 2,501 | 1 | 0 | 2,502 | 10,006 | 32 | 0 | 10,038 | ||||||||||||||||||||||||
Government and corporate debentures - floating interest rate | 10,008 | 10 | 0 | 10,018 | 34,967 | 10 | 0 | 34,977 | ||||||||||||||||||||||||
$ | 208,917 | $ | 594 | $ | (49 | ) | $ | 209,462 | $ | 289,407 | $ | 568 | $ | (48 | ) | $ | 289,927 |
F - 31
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
December 31, | ||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||
MORE THAN 1 YEAR THROUGH FIVE YEARS | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||||||||||||||
Government and corporate debentures - fixed interest rate | $ | 303,429 | $ | 239 | $ | (1,636 | ) | $ | 302,032 | $ | 494,520 | $ | 3,821 | $ | (143 | ) | $ | 498,198 | ||||||||||||||
Government-sponsored enterprises | 16,460 | 0 | (79 | ) | 16,381 | 21,264 | 67 | 0 | 21,331 | |||||||||||||||||||||||
Government and corporate debentures - floating interest rate | 3,049 | 1 | (3 | ) | 3,047 | 17,331 | 24 | (7 | ) | 17,348 | ||||||||||||||||||||||
$ | 322,938 | $ | 240 | $ | (1,718 | ) | $ | 321,460 | $ | 533,115 | $ | 3,912 | $ | (150 | ) | $ | 536,877 |
NOTE 5:- PREPAID EXPENSES AND OTHER CURRENT ASSETS
December 31, | ||||||||
2021 | 2020 | |||||||
Government authorities | $ | 4,634 | $ | 7,381 | ||||
Hedging transaction asset | 3,546 | 7,083 | ||||||
Prepaid expenses | 16,678 | 13,984 | ||||||
Other current assets | 8,019 | 12,218 | ||||||
$ | 32,877 | $ | 40,666 |
F - 32
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
December 31, | ||||||||
2021 | 2020 | |||||||
Cost: | ||||||||
Leasehold improvements | $ | 53,011 | $ | 41,101 | ||||
Computers, peripheral equipment and electronic equipment | 35,204 | 27,449 | ||||||
Internal use software | 4,983 | 2,467 | ||||||
Office furniture and equipment | 7,010 | 6,464 | ||||||
Vehicles | 254 | 130 | ||||||
100,462 | 77,611 | |||||||
Less - accumulated depreciation | 50,025 | 41,748 | ||||||
Depreciated cost | $ | 50,437 | $ | 35,863 |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cost of revenues | $ | 3,186 | $ | 2,654 | $ | 1,946 | ||||||
Research and development, net | 6,427 | 7,703 | 6,401 | |||||||||
Selling and marketing | 2,939 | 2,993 | 2,244 | |||||||||
General and administrative | 1,377 | 1,260 | 1,535 | |||||||||
$ | 13,929 | $ | 14,610 | $ | 12,126 |
F - 33
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 7:- BUSINESS COMBINATION
(in thousands) | ||||
Cash | $ | 2,853 | ||
Trade receivables | 378 | |||
Prepaid expenses and other current assets | 124 | |||
Intangible assets | 25,918 | |||
Goodwill | 25,065 | |||
Total Assets | $ | 54,338 | ||
Current liabilities | 3,698 | |||
Deferred tax liability | 4,011 | |||
Total Liabilities | $ | 7,709 | ||
Cash consideration paid | 45,582 | |||
Fair value of previous investment | 1,047 | |||
Total purchase consideration | $ | 46,629 |
F - 34
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 8:- INTANGIBLE ASSETS, NET
December 31, | ||||||||
2021 | 2020 | |||||||
Cost: | ||||||||
Technology | $ | 28,795 | $ | 9,614 | ||||
Customer relations | 17,663 | 11,054 | ||||||
Non-Competition agreement | 128 | 0 | ||||||
Customer data | 12,043 | 12,043 | ||||||
Domain | 552 | 552 | ||||||
Distribution agreement | 291 | 291 | ||||||
59,472 | 33,554 | |||||||
Less - accumulated amortization | 19,225 | 14,273 | ||||||
Intangible assets, net | $ | 40,247 | $ | 19,281 |
2022 | $ | 6,259 | ||
2023 | 5,963 | |||
2024 | 5,877 | |||
2025 | 4,829 | |||
Thereafter | 17,319 | |||
$ | 40,247 |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cost of revenues | $ | 2,030 | $ | 316 | $ | 1,951 | ||||||
Selling and marketing | 2,918 | 2,257 | 2,629 | |||||||||
General and administrative | 4 | 4 | 8 | |||||||||
$ | 4,952 | $ | 2,577 | $ | 4,588 |
F - 35
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 9:- ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
December 31, | ||||||||
2021 | 2020 | |||||||
Accrued expenses | $ | 32,812 | $ | 18,989 | ||||
Government authorities | 26,911 | 26,008 | ||||||
Hedging transaction liability | 2,677 | 1,961 | ||||||
Uncertain tax positions | 416 | 1,811 | ||||||
$ | 62,816 | $ | 48,769 |
a. | During any calendar quarter commencing after December 31, 2020 (and only during such calendar quarter), if the last reported sale price of Company’s Ordinary Shares, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding quarter is greater than or equal to 130% of the conversion price on each applicable trading day. |
F - 36
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
b. | During the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per USD 1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the ordinary shares and the conversion rate on each such trading day. |
c. | If the Company calls the Convertible Notes for a tax redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the tax redemption date; or |
d. | Upon the occurrence of specified corporate events. |
F - 37
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
December 31, | ||||||||
2021 | 2020 | |||||||
Principal outstanding | $ | 575,000 | $ | 575,000 | ||||
Unamortized debt discount (1) | 0 | (109,655 | ) | |||||
Unamortized debt issuance costs (1) | (11,565 | ) | (11,766 | ) | ||||
Net carrying amount | $ | 563,435 | $ | 453,579 |
Year ended December 31, | ||||||||
2021 | 2020 | |||||||
Amortization of debt discount and issuance costs (1) | $ | 3,114 | $ | 7,629 |
F - 38
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
a. | During any calendar quarter commencing after September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company’s Ordinary Shares, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding quarter is greater than or equal to 130% of the conversion price on each applicable trading day.
|
F - 39
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
b. | During the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per USD 1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the ordinary shares and the conversion rate on each such trading day. |
c. | If the Company calls the notes for a tax redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the tax redemption date; or |
d. | Upon the occurrence of specified corporate events. |
On or after January 1, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, Ordinary Shares or a combination of cash and Ordinary Shares, at the Company’s election. | |
For at least 20 trading days during the period of 30 consecutive trading days ended June 30, 2020, the last reported sale price of the Company’s ordinary share was equal to or exceeded 130% of the conversion price of the 2023 Notes on each applicable trading day. As a result, the 2023 Convertible Notes first became eligible for optional conversion as of the third quarter of 2020 through the end of 2021. During the first quarter of 2021, the 2023 Convertible Notes were partially converted into 560,770 ordinary shares of the Company. During 2020, the 2023 Convertible Notes were partially converted into 715 ordinary shares. |
December 31, | ||||||||
2021 | 2020 | |||||||
Principal outstanding | $ | 442,750 | $ | 442,750 | ||||
Unamortized debt discount (1) | 0 | (57,435 | ) | |||||
Unamortized debt issuance costs (1) | (3,128 | ) | (4,275 | ) | ||||
Converted to shares | (80,083 | ) | (179 | ) | ||||
Net carrying amount | $ | 359,539 | $ | 380,861 |
F - 40
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Amortization of debt discount and issuance costs (1) | $ | 2,184 | $ | 22,325 | $ | 20,938 |
F - 41
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 11:- LEASES |
December 31, | ||||||||
2021 | 2020 | |||||||
Lease cost: | ||||||||
Fixed cost and variable payments | $ | 27,124 | $ | 21,104 | ||||
Short-term lease cost | 1,619 | 1,854 | ||||||
Total operating lease cost | $ | 28,743 | $ | 22,958 |
December 31, | ||||||||
2021 | 2020 | |||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows from operating leases | $ | (26,688 | ) | $ | (19,061 | ) | ||
Weighted average remaining operating lease term | 6.12 | 6.57 | ||||||
Weighted average discount rate operating lease | 2.4 | % | 4.1 | % |
F - 42
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 11:- LEASES (Cont.) |
Fiscal Years Ending December 31, | Operating Leases | |||
2022 | $ | 29,202 | ||
2023 | 22,418 | |||
2024 | 16,321 | |||
2025 | 14,954 | |||
2026 | 12,929 | |||
After 2026 | 41,646 | |||
Total undiscounted lease payments | $ | 137,470 | ||
Less: | ||||
Imputed interest | 26,505 | |||
Present value of lease liabilities | $ | 110,965 |
NOTE 12:- | COMMITMENTS AND CONTINGENT LIABILITIES
|
a. | Pledges: |
b. | Legal contingencies: |
F - 43
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
a. | Ordinary shares: |
b. | Treasury shares: |
c. | Share-based payment: |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cost of revenues | $ | 15,462 | $ | 9,127 | $ | 5,854 | ||||||
Research and development | 70,020 | 76,883 | 56,161 | |||||||||
Selling and marketing | 33,853 | 22,845 | 18,458 | |||||||||
General and administrative | 102,056 | 38,458 | 28,864 | |||||||||
Total share-based compensation expense | $ | 221,391 | $ | 147,313 | $ | 109,337 |
F - 44
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.)
d. | Options granted to employees: |
Number of options | Weighted average exercise price | Weighted Average remaining contractual term (in years) | Aggregate intrinsic value | |||||||||||||
Balance at December 31, 2020 | 4,618,380 | $ | 74.31 | 6.74 | $ | 812,500 | ||||||||||
Granted | 712,485 | 250.71 | ||||||||||||||
Exercised | (531,788 | ) | 62.87 | |||||||||||||
Forfeited | (81,877 | ) | 107.62 | |||||||||||||
Balance at December 31, 2021 | 4,717,200 | 101.66 | 6.32 | 339,012 | ||||||||||||
Exercisable at December 31, 2021 | 3,213,149 | 65.72 | 5.39 | 305,280 | ||||||||||||
Vested and expected to vest at December 31, 2021 | 4,647,663 | $ | 100.60 | 6.29 | $ | 337,290 |
Year ended December 31, | ||||||
2021 | 2020 | 2019 | ||||
Expected volatility | 48.91%-52.22% | 42.26%-49.24% | 42.60%-45.24% | |||
Expected dividends | 0% | 0% | 0% | |||
Expected term (in years) | 4.85-4.91 | 4.84-4.99 | 4.94-4.99 | |||
Risk free rate | 0.44%-1.22% | 0.25%-1.40% | 1.51%-2.47% |
F - 45
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.) |
The following table set forth the parameters used in computation of the ESPP for the years ended December 31, 2021, 2020 and 2019:
Year ended December 31, | ||||||
2021 | 2020 | 2019 | ||||
Expected volatility | 56.94%-59.23% | 34.52%-83.3% | 31.88%-54.49% | |||
Expected dividends | 0% | 0% | 0% | |||
Expected term (in years) | 0.5 | 0.5 | 0.5 | |||
Risk free rate | 0.06%-0.07% | 0.13%-0.95% | 1.89%-2.52% |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Weighted-average grant date fair value of options granted, per optionz | $ | 127.36 | $ | 68.91 | $ | 53.67 | ||||||
Total intrinsic value of the options exercised | $ | 114,113 | $ | 436,187 | $ | 128,003 | ||||||
Total fair value of shares vested | $ | 49,045 | $ | 40,367 | $ | 33,316 |
F - 46
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.)
The following tables summarize information about the Company's outstanding and exercisable options granted to employees as of December 31, 2021:
Exercise price (range) | Options outstanding as of December 31, 2021 | Weighted average remaining contractual term | Options exercisable as of December 31, 2021 | Weighted average remaining contractual term | |||||||||||||
(years) | (years) | ||||||||||||||||
0-19.79 | 364,941 | 2.19 | 357,975 | 2.07 | |||||||||||||
19.8-21.13 | 563,467 | 3.71 | 563,467 | 3.71 | |||||||||||||
21.14-51.32 | 243,431 | 4.08 | 238,431 | 4.06 | |||||||||||||
51.33-56.61 | 398,038 | 5.12 | 398,038 | 5.12 | |||||||||||||
56.62-61.75 | 648,082 | 6.12 | 579,583 | 6.12 | |||||||||||||
61.76-101.67 | 332,623 | 6.57 | 242,169 | 6.43 | |||||||||||||
101.68-102.67 | 603,279 | 7.12 | 380,074 | 7.12 | |||||||||||||
102.68-142.09 | 237,781 | 7.59 | 137,373 | 7.48 | |||||||||||||
142.1-143.13 | 520,670 | 8.14 | 214,450 | 8.14 | |||||||||||||
143.14-353.09 | 804,888 | 9.18 | 101,589 | 8.83 | |||||||||||||
4,717,200 | 6.32 | 3,213,149 | 5.39 |
e. | Options granted to non-employees consultants: |
Grant Date | Options outstanding as of December 31, 2021 | Exercise price | Exercisable as of December 31, 2021 | Exercisable through | |||||||||
January 9, 2013 | 3,400 | $ | 2.34 | 3,400 | January 9, 2023 |
F - 47
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.)
f. | A summary of RSU activity for the year ended December 31, 2021, is as follows: |
Number of shares | Weighted average grant date fair value per share | |||||||
Unvested as of December 31, 2020 | 2,078,427 | $ | 150.87 | |||||
Granted | 1,303,693 | 243.47 | ||||||
Vested | (935,912 | ) | 139.15 | |||||
Forfeited | (220,759 | ) | 196.20 | |||||
Unvested as of December 31, 2021 | 2,225,449 | $ | 205.31 |
g. | Comprehensive income (loss): |
Year ended December 31, 2021 | ||||||||||||
Marketable securities | Cash flow | Total | ||||||||||
Beginning balance, net | $ | 3,768 | $ | 5,638 | $ | 9,406 | ||||||
Other comprehensive income before reclassifications, net | (4,672 | ) | 119 | (4,553 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income to earnings: | ||||||||||||
Cost of revenues | 0 | (279 | ) | (279 | ) | |||||||
Research and development, net | 0 | (3,644 | ) | (3,644 | ) | |||||||
Selling and marketing | 0 | (1,217 | ) | (1,217 | ) | |||||||
General and administrative | 0 | (740 | ) | (740 | ) | |||||||
Financial income (expenses), net | (29 | ) | 0 | (29 | ) | |||||||
Total accumulated other comprehensive income, net | $ | (933 | ) | $ | (123 | ) | $ | (1,056 | ) |
F - 48
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.) |
Year ended December 31, 2020 | ||||||||||||
Marketable | Cash flow | Total | ||||||||||
Beginning balance, net | $ | 852 | $ | 505 | $ | 1,357 | ||||||
Other comprehensive income before reclassifications, net | 2,962 | 11,425 | 14,387 | |||||||||
Amounts reclassified from accumulated other comprehensive income to earnings: | ||||||||||||
Cost of revenues | 0 | (269 | ) | (269 | ) | |||||||
Research and development, net | 0 | (3,995 | ) | (3,995 | ) | |||||||
Selling and marketing | 0 | (1,300 | ) | (1,300 | ) | |||||||
General and administrative | 0 | (728 | ) | (728 | ) | |||||||
Financial income (expenses), net | (46 | ) | 0 | (46 | ) | |||||||
Total accumulated other comprehensive income, net | $ | 3,768 | $ | 5,638 | $ | 9,406 |
F - 49
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 14:- INCOME TAXES
a. | Corporate tax in Israel: |
b. | Loss before taxes on income is comprised as follows: |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Domestic | $ | (72,066 | ) | $ | (153,173 | ) | $ | (86,703 | ) | |||
Foreign | 19,059 | 1,295 | 1,553 | |||||||||
Loss before taxes on income | $ | (53,007 | ) | $ | (151,878 | ) | $ | (85,150 | ) |
F - 50
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
c. | Deferred income taxes: |
December 31, | ||||||||
2021 | 2020 | |||||||
Deferred tax assets: | ||||||||
Net operating loss carryforward | $ | 11,015 | $ | 30,481 | ||||
Capital losses carry-forwards | 0 | 1 | ||||||
Operating lease liabilities | 18,806 | 16,495 | ||||||
Research and development expenses carryforward | 33,913 | 1,742 | ||||||
Share-based compensation | 28,452 | 18,242 | ||||||
Depreciation differences | 1,296 | 582 | ||||||
Accrued employees costs | 4,546 | 3,506 | ||||||
Intangible assets | 0 | 358 | ||||||
Tax advances | 1,241 | 4,032 | ||||||
Other | 1,635 | 139 | ||||||
Deferred tax assets | 100,904 | 75,578 | ||||||
Valuation allowance | (78,790 | ) | (34,157 | ) | ||||
Deferred tax liabilities: | ||||||||
Convertible notes | $ | 0 | $ | 19,415 | ||||
Unrealized gains on marketable and other equity securities | 72,626 | 15,343 | ||||||
Property and equipment | 1,900 | 1,740 | ||||||
Operating lease ROU assets | 17,136 | 14,999 | ||||||
Acquired Intangible assets (1) | 2,936 | 1,880 | ||||||
Other | 319 | 1,574 | ||||||
Deferred tax liabilities | $ | 94,917 | $ | 54,951 | ||||
Deferred taxes are included in the consolidated balance sheets, as follows: | ||||||||
Long-term receivables | $ | 0 | $ | 1,813 | ||||
Long-term liabilities | $ | 72,803 |
| $ | 15,343 |
(1) | In 2021, the Company completed an intra-entity transfer from US to Israel of certain intangible property (“IP”) rights associated with subsidiaries’ technology platform. This transfer resulted in income for US tax purposes of approximately $8,152 in 2021. As a result of the IP transfer, the Company utilized NOLs and consequently released the valuation allowance. |
F - 51
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
d. | Income taxes are comprised as follows: |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Current | $ | 10,621 | $ | (535 | ) | $ | 3,309 | |||||
Deferred | 53,581 | 15,524 | (711 | ) | ||||||||
$ | 64,202 | $ | 14,989 | $ | 2,598 | |||||||
Domestic | $ | 59,053 | $ | 16,193 | $ | (1,981 | ) | |||||
Foreign | 5,149 | (1,204 | ) | 4,579 | ||||||||
$ | 64,202 | $ | 14,989 | $ | 2,598 |
F - 52
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
e. | A reconciliation of the Company's theoretical income tax expense to actual income tax expense as follows: |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Loss before taxes on income | $ | (53,007 | ) | $ | (151,878 | ) | $ | (85,150 | ) | |||
Statutory tax rate | 23 | % | 23 | % | 23 | % | ||||||
Theoretical income tax expense | (12,192 | ) | (34,932 | ) | (19,585 | ) | ||||||
Deferred tax assets for which valuation allowance was provided | 40,520 | 29,485 | 10,390 | |||||||||
Non-deductible option expenses | (2,245 | ) | (5,529 | ) | (443 | ) | ||||||
Non-deductible expenses | (1,202 | ) | 627 | 2,280 | ||||||||
Tax adjustment in respect of different tax rate of foreign subsidiary | 4,171 | 345 | (256 | ) | ||||||||
Preferred enterprise benefits | 37,001 | 23,700 | 8,163 | |||||||||
Rate change impact | 0 | (57 | ) | (93 | ) | |||||||
Intra-entity intellectual property transfer | (3,913 | ) | 0 | 196 | ||||||||
different tax rate | 0 | 372 | 573 | |||||||||
Foreign tax | 0 | 0 | 102 | |||||||||
Uncerain tax positions | 416 | 0 | 0 | |||||||||
Other | 1,646 | 978 | 1,270 | |||||||||
Income tax expense | $ | 64,202 | $ | 14,989 | $ | 2,598 |
f. | Net operating loss carryforward: |
F - 53
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
g. | The Law for the Encouragement of Capital Investments, 1959 (the "Law"): |
F - 54
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
F - 55
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
h. | Tax benefits for research and development: |
i. | Tax reform in the U.S.: |
j. | Tax assessments: |
F - 56
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 14:- INCOME TAXES (Cont.)
k. | Uncertain tax positions: |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Opening balance | $ | 1,811 | $ | 2,030 | $ | 334 | ||||||
Increases (decrease) related to previous and current year tax positions | 3,858 | (219 | ) | 1,696 | ||||||||
Closing balance | $ | 5,669 | $ | 1,811 | $ | 2,030 |
NOTE 15:- FINANCIAL INCOME, NET
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Bank charges | $ | (761 | ) | $ | (539 | ) | $ | (533 | ) | |||
Income (expenses) related to hedging activity | 6,408 | (5,529 | ) | 963 | ||||||||
Amortization of debt discount and issuance costs | (5,298 | ) | (29,954 | ) | (20,938 | ) | ||||||
Exchange rate loss | (6,711 | ) | (2,352 | ) | (2,905 | ) | ||||||
Net gains related to equity securities | 267,831 | 69,042 | 0 | |||||||||
Total income (expenses ) | 261,469 | 30,668 | (23,413 | ) | ||||||||
Interest income | 10,474 | 16,391 | 19,792 | |||||||||
Total financial income (expenses), net | $ | 271,943 | $ | 47,059 | $ | (3,621 | ) |
F - 57
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 16:- BASIC AND DILUTED NET LOSS PER SHARE
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Numerator: | ||||||||||||
Net loss available to shareholders of ordinary shares | $ | (117,209 | ) | $ | (166,867 | ) | $ | (87,748 | ) | |||
Denominator: | ||||||||||||
Shares used in computing net loss per ordinary shares, basic and diluted | 57,004,154 | 54,425,056 | 50,504,698 |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Shares used in computing net loss per ordinary shares, basic and diluted | 57,004,154 | 54,425,056 | 50,504,698 | |||||||||
The following items have been excluded from the diluted weighted average number of shares outstanding because they are anti-dilutive: | ||||||||||||
Share options | 4,720,600 | 4,621,780 | 7,447,519 | |||||||||
Restricted share units | 2,225,516 | 2,078,427 | 2,125,440 | |||||||||
Convertible Notes | 3,969,514 | 4,530,284 | 3,104,251 | |||||||||
10,915,630 | 11,230,491 | 12,677,210 |
F - 58
WIX.COM LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 17:- SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION
a. | The Company applies ASC Topic 280, Segment Reporting (“ASC 280"). The Company operates in one reportable segment. Total revenues are attributed to geographic areas based on the location of the end customer. |
b. | The following tables present total revenues for the years ended December 31, 2021, 2020 and 2019 and long-lived assets as of December 31, 2021 and 2020: |
Year ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
North America (*) | $ | 731,251 | $ | 559,431 | $ | 411,354 | ||||||
Europe | 334,677 | 251,597 | 195,324 | |||||||||
Latin America | 55,244 | 51,053 | 51,108 | |||||||||
Asia and others | 148,485 | 122,286 | 99,881 | |||||||||
$ | 1,269,657 | $ | 984,367 | $ | 757,667 |
(*) | Includes revenue from the United States in amount of $363,431 $481,098 and $588,886 for 2019, 2020 and 2021, respectively. |
December 31, | ||||||||
2021 | 2020 | |||||||
Israel | $ | 54,440 | $ | 56,684 | ||||
Europe and Asia | 44,047 | 15,233 | ||||||
America | 53,045 | 52,352 | ||||||
$ | 151,532 | $ | 124,269 |
a. | In February 2022, Russia launched a military invasion into Ukraine. The Company maintains research and development and customer care activities in Ukraine. While as of the date of issuance of this annual report there have not been material impacts associated with the military invasion, management is continuously monitoring the developments to assess potential future impacts. |