Maya Hagoel - Director of IR Avishai Abrahami - Co-Founder, CEO and Chairman Nir Zohar - President and COO Lior Shemesh - CFO

Sterling Auty - JP Morgan Nat Schindler - Bank of America Mark Mahaney - RBC Capital Markets Kerry Rice - Needham & Company Jason Helfstein - Oppenheimer

Greetings and welcome to the Wix.com Limited Fourth Quarter and Full Year Financial Results Conference Call. A copy of management's prepared remarks has been posted to the company's Investor Relations website. [Operator Instructions] As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Ms. Maya Hagoel, Director of Investor Relations for Wix.com. Thank you miss, you may now begin.

Good Morning. I’d like to welcome everyone to today’s call to discuss Wix’s fourth quarter and full year financial results. Joining us from management are Avishai Abrahami, Co-Founder, CEO and Chairman; Nir Zohar, President and COO; and Lior Shemesh, CFO. After management’s prepared remarks, we’ll open the call up to questions. Before we begin, I would like to remind everyone that during the course of this conference call management may make forward looking statements which are subject to various risks and uncertainties that could cause the actual results to differ materially from our current expectations. A detailed discussion of such risks and uncertainties is contained in our final prospectus related to our initial public offering filed with the Securities and Exchange Commission on November 7, 2013. Forward-looking statements made during this conference call speak only as of today’s date and the company undertakes no obligation to update them to reflect subsequent events or circumstances. I would like to remind you that during the course of this conference call we will discuss some non-GAAP measures in talking about the company’s performance. Reconciliations to the most comparable GAAP financial measures are provided in the tables in our press release. Unless noted otherwise, all comparisons are versus the prior year period. This conference call is also being broadcast on the Internet and is available through the Investor Relations section of Wix’s website. Additionally, we have posted to our investor relations site a supplemental data sheet containing additional financial information for comparison purposes to prior periods along with a slide presentation reviewing fourth quarter and full year results. So with these formalities out of the way, I’d now like to turn the call over to our Co-Founder, CEO and Chairman Avishai Abrahami.

Good Morning. I’d like to welcome everyone to today’s call to discuss Wix’s fourth quarter and full year financial results. Joining us from management are Avishai Abrahami, Co-Founder, CEO and Chairman; Nir Zohar, President and COO; and Lior Shemesh, CFO. After management’s prepared remarks, we’ll open the call up to questions. Before we begin, I would like to remind everyone that during the course of this conference call management may make forward looking statements which are subject to various risks and uncertainties that could cause the actual results to differ materially from our current expectations. A detailed discussion of such risks and uncertainties is contained in our final prospectus related to our initial public offering filed with the Securities and Exchange Commission on November 7, 2013. Forward-looking statements made during this conference call speak only as of today’s date and the company undertakes no obligation to update them to reflect subsequent events or circumstances. I would like to remind you that during the course of this conference call we will discuss some non-GAAP measures in talking about the company’s performance. Reconciliations to the most comparable GAAP financial measures are provided in the tables in our press release. Unless noted otherwise, all comparisons are versus the prior year period. This conference call is also being broadcast on the Internet and is available through the Investor Relations section of Wix’s website. Additionally, we have posted to our investor relations site a supplemental data sheet containing additional financial information for comparison purposes to prior periods along with a slide presentation reviewing fourth quarter and full year results. So with these formalities out of the way, I’d now like to turn the call over to our Co-Founder, CEO and Chairman Avishai Abrahami.

Thanks Maya, and thanks to everyone for joining us today to discuss our 2013 fourth quarter and full year results. 2013 was a tremendous year for Wix as our investments in leading-edge technology and products continued to generate growth in collections, revenues, subscriptions and users. We also continued our investment in marketing to build a greater awareness of Wix and accelerated our R&D hiring plans to position Wix for sustainable long-term growth. We capped off 2013 with a fourth quarter performance that was our strongest quarter to date. Collections in the fourth quarter grew 82% to $30.6 million from the same period last year, and increased 17% over the third quarter of 2013. Revenues in the fourth quarter grew 88% to $24.9 million from the same period last year, and increased 16% from the third quarter of 2013. The number of premium subscriptions increased 68% from the previous year to 790,000 and rose approximately 12% from the third quarter of 2013. Overall registered users increased 49% to 42 million, up from 28 million at the end of 2012, and grew 9% from the third quarter of 2013 as we continue to build a strong pipeline of future subscriptions. This outstanding growth demonstrates the strength of our technology and products as more and more users choose Wix to build and maintain their online presence. I would also like to highlight two positive changes as we enter 2014. First, following our successful IPO, we were able to accelerate the hiring of engineers and developers faster than we had projected. Hiring high caliber R&D talent is a major challenge faced by all software companies, and we are now a quarter ahead of our plans. Second, because of increased brand exposure following our IPO and improvements to our product, we see significant opportunity to…

Thanks Maya, and thanks to everyone for joining us today to discuss our 2013 fourth quarter and full year results. 2013 was a tremendous year for Wix as our investments in leading-edge technology and products continued to generate growth in collections, revenues, subscriptions and users. We also continued our investment in marketing to build a greater awareness of Wix and accelerated our R&D hiring plans to position Wix for sustainable long-term growth. We capped off 2013 with a fourth quarter performance that was our strongest quarter to date. Collections in the fourth quarter grew 82% to $30.6 million from the same period last year, and increased 17% over the third quarter of 2013. Revenues in the fourth quarter grew 88% to $24.9 million from the same period last year, and increased 16% from the third quarter of 2013. The number of premium subscriptions increased 68% from the previous year to 790,000 and rose approximately 12% from the third quarter of 2013. Overall registered users increased 49% to 42 million, up from 28 million at the end of 2012, and grew 9% from the third quarter of 2013 as we continue to build a strong pipeline of future subscriptions. This outstanding growth demonstrates the strength of our technology and products as more and more users choose Wix to build and maintain their online presence. I would also like to highlight two positive changes as we enter 2014. First, following our successful IPO, we were able to accelerate the hiring of engineers and developers faster than we had projected. Hiring high caliber R&D talent is a major challenge faced by all software companies, and we are now a quarter ahead of our plans. Second, because of increased brand exposure following our IPO and improvements to our product, we see significant opportunity to…

Thanks Avishai, and let me add my welcome to all of you on today’s call. I will briefly walk you through our business model, discuss our market opportunity and then close with discussing how we will execute our strategies to capture this opportunity. Our business is based on a freemium model, allowing users to create and maintain a digital presence for as long as they want for free. Whenever they’re ready, users can upgrade to one of our annual or monthly premium subscription packages and benefit from additional features, such as the use of their own domain, the removal of Wix branding, access to e-commerce solutions and premium support and more. While many users upgrade to premium subscriptions in the weeks and months following their initial registration, others stay with our free product for some time while building their business or brand and later upgrade to a premium subscription as their needs evolve. This means we benefit from a large and growing pipeline of free users that eventually convert to paid subscriptions over time. The tail of this pipeline is very long. In fact, we’re still seeing users that initially registered with us as far back as 2008 convert to premium subscriptions today. Further, even though new cohorts are larger today than in the past, we see that cohort behavior is consistent. The number of users that convert to a paid subscription in each cohort has also been consistent over time. This predictable behavior provides us with a great deal of visibility into our performance, which is a significant benefit of our model. Now I would like to spend a few minutes discussing our market opportunity and how we plan to execute on our growth strategies moving forward. As Avishai noted, we appeal to a broad range of users including…

Thank you, Nir. Hello everyone and thank you for joining us on our first earnings call as a public company. Today I will cover three topics: an overview of our key metrics, a review of our fourth quarter and full year results and guidance for the first quarter and full year 2014. We focus on three primary metrics to measure our top line growth: registered users, premium subscriptions and collections. Registered users create a pipeline of premium subscriptions, which generate collections and then revenues. As Avishai mentioned, registered users as of year-end 2013 increased 49% to 42.1 million from 28.2 million at the end of 2012; this was an increase of 8% sequentially from 38.8 million at the end of the third quarter of 2013. In the fourth quarter, premium subscriptions increased 68% to approximately 790,000 from approximately 470,000 in the prior year period and were up 12% from approximately 707,000 in the third quarter of 2013. These subscriptions drove record collections, which is the true measure of cash coming into the business. Fourth quarter collections grew 82% to $30.6 million from $16.8 million in the prior year period. On a quarter-over-quarter basis, collections increased 17% versus the third quarter of 2013. Full year 2013 collections grew 88% to $98.7 million from $52.5 million in the prior year. This growth was driven not only by an increase in premium subscriptions, but also by the increasing shift in annual packages vs. monthly packages and a slight increase in average collection per subscription. We experienced this outstanding growth in these key metrics in the quarter, which led to record revenue, while maintaining the efficiency of our marketing spend. We measure the efficiency of our marketing by observing the number of months it takes us to return marketing dollars through collections. We call…

Thank you, Nir. Hello everyone and thank you for joining us on our first earnings call as a public company. Today I will cover three topics: an overview of our key metrics, a review of our fourth quarter and full year results and guidance for the first quarter and full year 2014. We focus on three primary metrics to measure our top line growth: registered users, premium subscriptions and collections. Registered users create a pipeline of premium subscriptions, which generate collections and then revenues. As Avishai mentioned, registered users as of year-end 2013 increased 49% to 42.1 million from 28.2 million at the end of 2012; this was an increase of 8% sequentially from 38.8 million at the end of the third quarter of 2013. In the fourth quarter, premium subscriptions increased 68% to approximately 790,000 from approximately 470,000 in the prior year period and were up 12% from approximately 707,000 in the third quarter of 2013. These subscriptions drove record collections, which is the true measure of cash coming into the business. Fourth quarter collections grew 82% to $30.6 million from $16.8 million in the prior year period. On a quarter-over-quarter basis, collections increased 17% versus the third quarter of 2013. Full year 2013 collections grew 88% to $98.7 million from $52.5 million in the prior year. This growth was driven not only by an increase in premium subscriptions, but also by the increasing shift in annual packages vs. monthly packages and a slight increase in average collection per subscription. We experienced this outstanding growth in these key metrics in the quarter, which led to record revenue, while maintaining the efficiency of our marketing spend. We measure the efficiency of our marketing by observing the number of months it takes us to return marketing dollars through collections. We call…

Thank you, Lior. To sum up, we made tremendous progress in 2013 as we invested in products, technology and people as well as in growing awareness of Wix across multiple touch points and in an increasing number of markets around the world. We are building on this momentum in 2014 by further investing in R&D and marketing to extend our technology lead and strengthen the Wix brand. In the coming year, we will continue to develop amazing products that both anticipate and respond to our users' needs. Our mission remains the same -- help millions of people worldwide, create and manage their business and brands online just the way they imagined it. Thank you.

Thank you, Lior. To sum up, we made tremendous progress in 2013 as we invested in products, technology and people as well as in growing awareness of Wix across multiple touch points and in an increasing number of markets around the world. We are building on this momentum in 2014 by further investing in R&D and marketing to extend our technology lead and strengthen the Wix brand. In the coming year, we will continue to develop amazing products that both anticipate and respond to our users' needs. Our mission remains the same -- help millions of people worldwide, create and manage their business and brands online just the way they imagined it. Thank you.

Thank you. At this time we will be conducting a question-and-answer session. [Operator Instruction] Our first question today is coming from Sterling Auty of JP Morgan. Please proceed with your question.

Hi, great. Avishai can you hear me okay?

Yes, we do.

Yes, we do.

Alright glad to have you back.

I was [indiscernible] than we anticipated…

I was [indiscernible] than we anticipated…

Sorry about that. Okay, the premium subscriber is teaming much better than we anticipated in the quarter. Could you give us a sense of how much the premium subscribers were first time registered users versus how much came from the tail in the quarter?

Yes, we can tell you the [indiscernible] so about 60% of those come from previous quarters totaling about 30% that kind of came from the quarter from Q4 itself.

Okay. And can you give us a sense in terms of the multichannel approach that you’ve got driving those premium subscribers wherever you’re seeing the biggest upside relative to your own expectations? I know a number of them are relatively new whether it’s satellite video et cetera so where were you seeing the biggest upside surprise picking up from your perspective in terms of the customer acquisition channel?

:

Okay. And then can you give us a sense as to the -- you give us some statistics on the paid at purchases, but any just qualitative commentary in terms of what you’re seeing on the uptake of paid applications and which ones in particular are gaining most traction with the user base?

So first of all Sterling this is Nir in term of paid apps so we actually doubled number of paid apps in the fourth quarter compared to the [indiscernible] obviously there is not much it’s nothing huge contribution in terms of the ARPU because it’s still relatively small numbers but I think that it was very encouraging looking at the current quarter and the current year so it was really a good result for us.

And last question and I’ll turn it over. As you look where at you’ve kind of graphically in terms of building out your payment gateways internationally where do you think you have got the biggest penetration opportunity over the next -- basically 2014? Is it Latin America, is it parts of Europe, is it Russia, where do you think the biggest new growth opportunities and where you built out your payment gate?

So this is Nir again, I think it’s a great opportunity in Latin America or whether it’s Central South America we actually we’ve doubled the collections there in Q4 and we’re definitely going to see a lot of differentials in Russia in further potential in Europe and in Turkey where we just started.

Great, thank you guys.

Thank you.

Thank you.

Thank you. Our next question is coming from Nat Schindler of Bank of America. Please proceed with your question.

Yes. Hi guys. Thank you very much for taking my call and congratulations on a great first quarter. Wanted to go a little bit more deeply into one of the questions I think Sterling touched on. You’ve seen increasing penetration of your free base premium subscribers as a percentage of free that has been ticking up for the last 18 months or so every quarter and this quarter made a substantial move up. Are there any new strategies you’re taking to get people to convert to paying subscribers faster or is this just general trends in the industry? Bank of America: Yes. Hi guys. Thank you very much for taking my call and congratulations on a great first quarter. Wanted to go a little bit more deeply into one of the questions I think Sterling touched on. You’ve seen increasing penetration of your free base premium subscribers as a percentage of free that has been ticking up for the last 18 months or so every quarter and this quarter made a substantial move up. Are there any new strategies you’re taking to get people to convert to paying subscribers faster or is this just general trends in the industry?

I think that this is adjusting and mostly driven from product improvements and that we -- and so we could relatively change anything that is material to that and announcing the flow or in the -- so I think this is main number one key driver for revenues and product improvements and I think that in the last quarter the and last quarter what happened is that the gap between as to compared to has just grown much farther and the reflection you have gotten is immediately improving to conventions and the retention so that’s why I think the key driver. In fact that if you think about we actually penetrated to other places where conversion the other fees for conversion where we’ve been -- should have been lower and we don’t see that. So we have seen product improvement.

Great, and also on the product improvements can you give us a little bit more detail on your app store results? I know it’s still early in the roll out. But specifically can you talk a little bit about the attachment rates of amps on your premium subscribers and/or new and OB as well as ARPU that you’re generating from the system?

So in term of the ARPU we have experienced in the fourth quarter increase in the ARPU, some which came from the app market as I mentioned before because we kind of double the revenue from the app but net it’s still not significant revenue that is coming from the app markets while we do expect it to increase overtime obviously.

And any particular apps other than Google Docs and Google Apps which I know have been one of your major products but any new apps that are gaining significant attraction?

Well, there is a bunch of them -- the one that’s the most surprising and think I would prefer not to mention by name but we can see that the lot of the surfer stuff is doing fantastically well and so a lot of things that mostly aggregate social things and they allow people to propagate information back into the social universe and we could see them as growing really well.

Great. Thank you.

Thank you. Our next question is coming from Mark Mahaney of RBC Capital Markets. Please proceed with your question.

Thank you. You mentioned some statistics on the mobile launch and the number of websites. Can you talk about the overall level of adoption by your users and your premium subscribers off the mobile solution? And then any thoughts on what that does through the financial model, I think our assumption would be that that would increase the attractiveness of the offerings and therefore that would probably lead a -- you know slightly marginally higher conversion of users in the subscriptions but is that case is there anything to backup that assumption? Thank you very much.

Mark, let me say first of all -- and you are asking about of couple of things. I want to start with the last one. And you asked about [indiscernible] converting improvements because of the mobile and the answer to that is yes absolutely yes because actually we measure that when we uploaded the product by testing, related testing and could see a difference. And this is just another example. You know that every time we pull we get set of results. The other question you asked is about adoption of the mobile. So, you see really large numbers I don’t want to be slow that to-date the rate. Okay. The 30,000 new mobile sites built everyday which is we think about it is a fantastic results and we see that happening mostly in premium users but costly and talented free users so for us it’s really encouragement that when you use your mobile do the right thing and it’s a right approach and intend to consider relatively on that during this year.

Thank you, Avishai.

Thank you. Our next question is coming from Kerry Rice of Needham & Company. Please proceed with your question. Kerry Rice - Needham & Company: Thank you. One kind of a near-term question and one maybe a larger scope question. But can you talk a little bit about the pricing power you might have, do you have the ability, do you feel the raised price and so do you think the dynamics maybe between annual and monthly subscription because I think most -- you're working hard to push people towards annual packages. And then the second question is boarder on the competitive landscape. Can you talk about maybe a little bit about your differences between maybe some of your private competitors and some of your public competitors and what makes you unique to those? Thank you.

Well hi. I’ll take the first question which is regarding the prices, as we have told you through the RPI ratio and according to the RPI ratio. We’re dealing a lot of stress from the way of compelling but its value actually to be annual packages in order to push our users to the environment we handle. We see greater growth there as other clients see more and more users go towards to the annual, in fact the overall user data, annual set in Q4 was 66% basically 64% that we declared in the IPO and that situation being main focus of our company to how we describe the product. In terms of general pricing, I wouldn’t say that the frequently testing various ways around it but as we said before the key focus of the Company is growth. So, in any test that we do even if to get better results and revenue or collections on the set where there is slightly lower conversation rate meaning that there is less we will go back to the original version than staying with the higher growth and find a different way to get the revenue that you’re trying to achieve. So growth will be the key driver.

Kerry this is Avishai and I am going to try and answer the competitive difference, the key differences that we’re seeing is again most of other products we should have [indiscernible] products and development company and when we look at our competitors and if you look at companies that Endurance [indiscernible] you’ll find that most of them are still companies many just to go to their offices you will find 1,000s of sales people you get to list even fine engineers. And there are no sales to direct we don’t want. That’s the first I think key differentiator and it means that the focus on building better products and we come to our products it’d be much higher functionality, we can really bring your vision designer your site manage your business under which platform. And then [indiscernible] and economics change a little bit of that the you can’t really control business line and you don’t have the offsets you can’t scale up your business there is no data bases behind these of course HTML5 is another key differentiator. And a fully integrated mobile solution where you can really edit the control and there have to be a side is a major advantage if we come in and deploy this last quarter. And so I think those will be the key differentiator but really the exits of that is that we’re a software Company we’re not a sales company and we’re focusing on continue to increasing the quality of our products where most of our competitors are mostly focused on increasing the number of sales people. Kerry Rice - Needham & Company: Okay, thank you very much.

[Operator Instructions] Our next question is coming from Jason Helfstein of Oppenheimer. Please proceed with your question.

Thanks. I have two questions, the first around just the app market I know you said the number of apps doubled but is there a way to think about what percent of either registered or premium subscribers are using apps and kind of how that’s changed so we can understand just the acceleration around adoption of that even though we understand it will take time to look meaningful for revenue? And then secondly can you talk a bit more about cost of customer acquisitions why you don’t give out a specific metric. Can you talk about how the quarter came in versus your expectation? And then as you’re thinking about the 2014 guidance, are you planning to spend kind of the same per addition or less? Thank you.

Hi. So Jason so let me see if -- so you’re asking about the app market and as the revenue picked up is the statistics right which is we have about 8 million installations for publications and if you find that the majority of our premiums that we’ll installed and in some kind of an app. And a lot of them are still more than one [indiscernible] installed paid up something so free up but from our perspective is the company the major, the number one topic that we have on the apps market is largest revenue that is beyond that assessment registration and that’s why we focus so much also in great free solutions so that’s why we are making them our Facebook app or things that now you can just make a better product given that you don’t necessarily charge for them. And you can see that also a big percentage of the free charge new installed app and use them most of the free app and now they paid up and this number is over growing so of the [indiscernible] first question I wanted to turn to Nir about answering the second part of your question which is cost of acquisition.

So internal cost of acquisition we don’t really see a major difference from previous quarters but the thing that is important to mention that internal COI we will refer to COI we will although we are increased the marketing in Q4 we are as efficient as we were before and I think that is driven probably because it’s also enable I think the same budgets to increase, the traffic to increase number of premiums and basically this is drove the most of the growth this quarter.

Okay, thank you.

Thank you. This does conclude today’s question-and-answer session. We’d like to thank everyone for their participation on today’s teleconference. You may disconnect your lines at this time and have a wonderful day.