Wix.com Ltd. — Form 20-F summary
Reporting period: The filing is the annual report for the fiscal year ended December 31, 2022, filed March 30, 2023. Although the request specifies 2021 Q4, this filing does not provide a distinct 2021 Q4 results summary; the comparisons below are for full-year 2022 versus full-year 2021. Amounts are U.S. dollars unless noted.
Business context and key financial metrics
Wix operates a global cloud-based website creation and business-solutions platform under a freemium SaaS model. At year-end 2022, it reported approximately 243.4 million registered users and 6.068 million premium subscriptions. The company reports as one operating segment.
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | $1,387.7 million | $1,269.7 million |
| Creative Subscriptions revenue | $1,039.5 million | $950.3 million |
| Business Solutions revenue | $348.2 million | $319.4 million |
| Gross profit / margin | $861.4 million / 62.1% | $781.1 million / 61.5% |
| Operating loss / margin | ($285.4 million) / (20.6%) | ($325.5 million) / (25.6%) |
| Net loss / margin | ($424.9 million) / (30.6%) | ($117.2 million) / (9.2%) |
| Cash from operating activities | $37.2 million | $65.7 million |
| Capital expenditures | $70.7 million | $37.7 million |
| Free cash flow (non-GAAP) | ($33.5 million) | $28.0 million |
| Bookings (non-GAAP) | $1,472.1 million | $1,418.8 million |
| Creative Subscriptions ARR | $1,081 million | $1,010 million |
At December 31, 2022, cash and cash equivalents were $244.7 million, short-term deposits $526.3 million, and short- and long-term marketable securities $487.4 million. The filing cites total liquid assets of approximately $1.26 billion. Working capital was negative $43.3 million, including $529.2 million of current deferred revenue and $361.6 million of current convertible notes, net. Convertible Notes had aggregate principal of $937.7 million: $362.7 million due in June/July 2023 and $575 million due in 2025. Management expected to repay the 2023 notes in cash.
Changes versus the prior comparable period
- Revenue rose 9% year over year. Creative Subscriptions and Business Solutions revenue each increased 9%.
- Premium subscriptions increased 2%, from 5.972 million to 6.068 million; registered users increased 10%, from 221.8 million to 243.4 million. ARR rose 7% and bookings rose about 4%.
- Gross margin improved 0.6 percentage points. Operating loss narrowed by $40.2 million, with selling and marketing expense down 4%; research and development expense rose 14%.
- Net loss widened substantially, chiefly because financial results swung from $271.9 million of net financial income in 2021 to $183.5 million of net financial expense in 2022. The 2022 expense included a $200.3 million decline in the value of a publicly held investment; 2021 included material gains on equity securities.
- Operating cash flow declined 43%, and free cash flow moved from positive $28.0 million to negative $33.5 million, as capital expenditures increased.
Outlook, management commentary, risks and unusual items
- Cost efficiency: Wix described an August 2022 plan for approximately $150 million in annualized savings and additional February 2023 measures. The MD&A describes the incremental savings as $65 million and total expected annualized savings as $215 million; a subsequent-events note describes the February initiative as $50 million. The filing therefore presents differing figures for the incremental plan. It estimated $20–$30 million of related charges in Q1 2023.
- Operating outlook: Management said acquisition-marketing investment would be lower than in prior years, with more emphasis on brand marketing, while continuing investment in research and development. Expected 2023 capital expenditures were $58–$64 million, primarily for the new headquarters.
- Liquidity and debt: Management said available cash, deposits, marketable securities and operating cash flows should fund operations for at least 12 months and the foreseeable future. The near-term $362.7 million 2023 note maturity is an important cash commitment; the filing also cites a $250 million commitment related to the second phase of the headquarters lease.
- Principal risks: Macro-economic weakness, inflation and interest rates may affect users’ spending and small businesses; foreign-exchange exposure is material; and Wix disclosed operational exposure to the war in Ukraine, including 774 Ukraine-based contractors and the suspension of commercial operations in Russia in March 2022. Other material risks include competition, customer retention and acquisition costs, payment processing, cybersecurity, data privacy and regulation, and the ability to execute workforce reductions without impairing service or growth.
- Unusual items and controls: Wix repurchased 2.77 million shares for $231.9 million in 2022. It reported no legal proceedings requiring an accrual at year-end. The auditor issued an unqualified opinion on the financial statements and internal controls; revenue recognition was identified as a critical audit matter because of the high transaction volume and reliance on interconnected systems.
Most important facts for investors to verify
- Confirm the filing period: it covers full-year 2022, not 2021 Q4, and does not give a separate Q4 financial table in the supplied text.
- Review the $200.3 million investment valuation decline and its effect on reported net loss, alongside the non-GAAP operating and cash-flow measures.
- Reconcile the February 2023 cost-savings disclosure: $65 million in the MD&A versus $50 million in the subsequent-events note, and assess execution and severance/lease charges.
- Assess liquidity after the 2023 notes’ $362.7 million cash maturity, planned headquarters spending and lease commitments.
- Track subscription growth, ARR, bookings, renewal trends and the returns from the shift away from paid acquisition marketing.