IPO report: Wix.com (WIX)

Francis Gaskins  |

Wix.com ($WIX) is a leading global web development platform with one of the largest number of registered users in the world.

12 other IPOs scheduled for this week. The full IPO calendar can be found at IPOpremium.

WIXscheduled a $119 million IPO NASDAQ Global Market, with a market capitalization of $719 million at a price range midpoint of $15.50 for Wednesday, November 6, 2013.

The F-1 with price ranges was filed October 23, 2013.  The Manager, Joint managers are J.P. Morgan/ BofA Merrill Lynch/ RBC Capital Markets.  The Co-Managers are Needham & Co., Oppenheimer & Co.


Through September 30, 2013, WIX achieved 15 consecutive quarters of sequential growth in the accumulated number of premium subscriptions.  WIX also achieved 15 consecutive quarters of growth in revenues and collections.


  • For the nine months ended September ’13 revenue was up 83% to $55.5 million.  Gross margin was up 81%.  Registered users were up 54%, paid users were up 71%.
  • Free cash flow just barely turned positve, at +$160,000, up from a negative $-5 million for the year earlier comparative period.
  • Losses, however, were up 50% to $-18 million from -$12 million.

Valuation Ratios


Price /

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% offered

annualizing Sept 9 mos

Cap (mm)





in IPO

Wix.com Ltd. (WIX)







Accumulated deficit of -$78 million.



The rating on WIX is a buy on the IPO.  Registered & paid subscribers are on an upswing, the revenue model is recurring subscription-based and WIX just turned free cash flow positive for the nine months ended September, 2013.


WIXis a leading global web development platform with one of the largest number of registered users in the world.

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As of September 30, 2013, WIX had almost 39 million registered users and 706,780 premium subscriptions and averaged 20,595 app installations per day during the month of September.

As of September 30, 2013, 64% of WIX’s overall premium subscriptions were annual and 36% were monthly.

How WIX generates revenue

WIX derives the substantial majority of revenue from monthly and annual premium subscriptions.  Annual subscriptions provide benefits to the operating model because WIX is able to collect cash up front, increase overall retention rates and have greater visibility into revenues.

WIX has noticed, however, that promotions that further lower the effective price of an annual subscription can result in attracting users who do not renew their subscription once the promotion is no longer available.

WIX therefore seeks to strike a balance between attracting annual subscriptions and maintaining a user base that is loyal to WIX’s offering.

User Acquisition Spending

58% of the premium subscriptions generated by users that registered in September 2013 came from organic and direct sources, meaning visitors that reached WIX via unpaid search results or by typing the URL of WIX’s website in their browser.

Geographic breakdown

For the nine months ended September 30, 2013 the geographic customer breakdown was:  North America, 55%; Europe, 24%; Latin America, 11%; Asia & others, 10%.

Core Product

WIX’s core product is a drag-and-drop visual development and editing environment complete with high quality templates, graphics, image galleries and fonts. With its platform, WIX users can create and manage a professional-quality digital presence tailored to their brands’ specific look and feel, accessible across all major browsers and the most widely used desktop, tablet and mobile devices.

WIX’s cloud-based platform is accessed through a hosted environment, allowing its users to update their site and manage their business or organization at any time. WIX provides its users with flexibility and scalability, allowing them to expand their digital presence as their business, organizational, professional or individual needs change and grow.

WIX’s scale and reach makes it an attractive partner for companies interested in distributing their own solutions to WIX’s users, which are primarily small business owners, organizations and entrepreneurs. As WIX expands its platform through partnerships, WIX is able to increase its value proposition for existing users and more easily attract new users.

App Market

Through its highly curated App Market, which WIX launched in the last quarter of 2012, WIX offers users the ability to easily install more than 140 different apps that were carefully identified and selected for inclusion in the App Market by us based on user needs and demand. These apps add additional functionality and are easily integrated into users’ websites with one click and without any coding.

Revenues from WIX’s App Market have been negligible to date.


WIXbelieves that it does not compete with traditional web development firms because WIX focuses on not only web development but also technology, design and business work flow processes.

Nevertheless, WIX does compete with aspects of the services provided by web-based website design platforms and software programs, as well as some of the service offerings of a number of smaller template-based web builder companies and designers, as well as those who offer domain registration services, particularly using a freemium business model similar to WIX.

For example, Squarespace

5% stockholders pre-IPO

Entities affiliated with Mangrove Capital Partners, 27%

Entities affiliated with Bessemer Venture Partners, 26%

Benchmark Capital Partners, 13%                                              

Entities affiliated with Insight Venture Partners, 12%

Use of proceeds

WIX expects to net $76 from its IPO, from sale of 5.5 million shares.  Shareholders intend to sell 2.2 million shares.

WIX intends to use the IPO proceeds for general corporate purposes.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


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