Wix.com Ltd. (WIX) Q4 2014 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Wix.com 2014 fourth quarter and full year financial results conference call. [Operator Instructions] I'll now introduce your host for today's conference, Joe Pollaro, VP Strategic Partnership and Investor Relation. Please go ahead, sir.

Good morning. Welcome to Wix's fourth quarter 2014 earnings call. Joining from management are Avishai Abrahami, Co-Founder and CEO; Nir Zohar, President and COO; and Lior Shemesh, CFO. Before we begin, a quick reminder that during this conference call management may make forward looking statements which are subject to various risks and uncertainties that could cause actual results to differ materially from our current expectations. A detailed discussion of such risks and uncertainties is contained in our Annual Report on Form 20-F for the year ended December 31, 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. Also, during this conference call we will discuss some non-GAAP measures. Reconciliations to the most comparable GAAP financial measures are provided in the tables in our press release. This conference call is also being webcast and is available through the Investor Relations section our 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 results. Management's prepared comments on today's call have also been posted to IR site. I'll now turn the call over to our Co-Founder and CEO, Avishai Abrahami.

Thanks Joe, and thanks to everyone for joining us. We concluded 2014 with another strong quarter for Wix, and we exceeded our prior outlook once again. Today, I am going to spend a few minutes summarizing 2014 and discussing our priorities for 2015. Nir will take you through some operational highlights and performance metrics for the fourth quarter and the year. And Lior will wrap up with a review of our financials as well as guidance for Q1 and full year 2015. So let's get started. In the fourth quarter collections were $49.3 million, which is 61% year-over-year growth and 66% growth excluding the impact of year-over-year changes in foreign exchange rates. Our full year collections in 2014 were $171.3 million, a 74% increase over 2014. Revenue was $41.6 million, which is 67% year-over-year growth. For the full year 2014, revenue was $141.8 million, which is 76% higher than in 2013. We ended the fourth quarter with over 1.23 million premium subscriptions, and as of today we have over 59 million registered users. We also exceeded our prior outlook for profitability on an adjusted EBITDA basis. We are very happy with our strong performance in Q4, and it provides us with great momentum going into 2015. Q4 is the conclusion of a year, in which we made significant investment in the business. We invested heavily in R&D by hiring over 160 developers and engineers, increasing our R&D team by 50% from the beginning of the year. This investment enabled us to maintain our technology leadership by continuously innovating our platform, which is a critical part of our growth strategy. We grew our marketing budget over 80% for the year. We invested in user acquisition, launched campaigns in new channels and began marketing in new geographies. We also began aggressively promoting the Wix brand, which I will discuss further shortly. Additionally, we invested in growing our user support function, both with additional headcount and with an updated technology platform that we built in-house. And we strengthened our internal system to support the operation required for growing public company. These investments have positioned us well to become the platform for small businesses to move online, and not only to create great website, but also to manage and grow online. We have great momentum going into 2015. And I'd now like to spend a few minutes to share with you my priorities for the coming year and longer-term. First, we will continue to execute on our product roadmap and plan to launch several new products this year. Our users are able to easily build customized website and incorporate functionality to manage and grow their businesses online, the likelihood that they will convert to purchase a premium subscription increases. In 2015, we will further illustrate our leadership in website development. We plan to improve the core editor experience at Wix and increase capabilities for businesses, both through enhancements to our App Market and additional vertical and horizontal applications. Second, we will continue to spend efficiently on marketing to grow our user base globally. We will also increase our focus on building the Wix brand on a global basis. We had great success to begin the year with our Super Bowl campaign, which was a fantastic way to expose our brand to hundreds of millions of people. Our goal is to make the Wix brand recognized as a platform for businesses to operate online, and this will become a focus for us in the coming years. We will continue to improve our payment technologies and build partnerships around the world to enable users to more easily and convert to paid subscriptions. We plan to partner with other providers of online small business products, where we can add value and increase our distribution, as we have done with Google, Microsoft and others. Finally, our priority is to continue to drive the topline growth through efficient marketing and product development. As we scale, we plan to close the gap on profitability and achieve positive adjusted EBITDA for the full year. To wrap up, 2014 was an important year for Wix. We made significant investments across the entire company and we grew our business over by 75% on the topline. We are now ready to reap the benefits from these investments, and I'm excited by how we are positioned for 2015 and beyond. And I now hand it over to Nir, who will provide some additional details on our performance.

Thank you, Avishai. As Avishai mentioned, we had a very successful year of product launches and partnership announcements. We made an impressive number of enhancements, more than 350 to our HTML5 desktop editor, Mobile Editor and App Market, further increasing their capabilities and ease of use. We continue to increase our technology lead and our focus on making website development easy and customizable. Most recently, we announced a partnership with Shutterstock, which gives our users the ability to purchase digital imagery from Bigstock directly through our editor and add that content to their Wix site. We have already seen a great deal of engagement from our users with this added feature. We introduced Wix ShoutOut, which is a very easy way for a small business owner to create and send newsletters to his customers. ShoutOut is now a freemium offering, and we have already seen strong initial uptake of premium subscriptions. To date, over 350,000 ShoutOuts have been sent and have generated more than 34 million impressions. These are great figures, especially considering this product launched in July. I'm also excited to announce that we recently launched a new Wix native mobile app. Users can now create and send ShoutOuts from their mobile phone with this app. The app is super easy to use, and it's a great way for business owners to send notices and announcements on the go. It's currently available for download in the Apple App Store and will soon be available on Google Play. In Q2, we launched our first vertical product. Packaging our products specifically for verticals is a key strategy for us, as it provides an easy and affordable way for these businesses to bring mission critical workflow online. We launched WixHotels and WixStores, and we plan to offer solutions for restaurants as well as several other verticals moving forward. We established two distribution partnerships last year. The first with REG.RU, which increases our reach in Russia; and the second with Google Domains, which continues our strong relationship with Google. Last week, we announced that we are now part of the Microsoft's Office 365 platform, allowing subscribers of Office 365 to use Wix to build their online presence. Each of these partnerships validates our technology leadership in website development. They also position Wix at a place where SMBs begin building their online presence. Finally, we have significantly expanded our capabilities that allow small business owners to manage and grow their business through our platform. Already, our users have saved over 71 million contacts to our customer management system. That's an increase from 55 million at the end of the year, just two months ago. This level of engagement illustrates the value our users get from our platform, and we expect this engagement to continue as we add more functionality. Empowering small business owners with the right products to not only create an online presence, but also to manage and grow their business in the cloud is our focus. This product strategy also differentiates Wix as we offer a complete platform that starts with website creation and expands to enabling critical business workflow online. Many of these products or technologies will not drive meaningful revenue in the near future, but they will improve the value of our platform for our users, driving conversion and retention up. I'd now like to discuss some of our performance metrics on user and premium subscription. We had a great fourth quarter as we added over 108,000 net premium subscriptions. For the year, we added over 440,000 net premium subscriptions to bring our total to 1.23 million, an increase of 56% from where we ended in 2013. We continue to see positive trends in our user cohorts. In the slides we have posted on our IR website, we have updated our cohort data for our last five Q1s. As can be seen on our Q1 2014 cohort, the green line, we continue to convert users into premium subscriptions at a better rate than prior years. Our retention of users also continues to be consistent, and even slightly improved, as can be seen by our Q1 2013 cohort, the yellow line. For the second quarter in a row, the number of live subscriptions in this cohort increased, even though it is now two years old. The performance of these cohorts continues to support the benefit of our freemium business model. Once we spend marketing dollars to bring in a cohort of registered users, we continue to harvest collections from this cohort for several years without having to reinvest in marketing to those users. This behavior is a result of a strong product offering, and as Avishai said, it is why we will continue to focus on enhancing our existing products and introducing new ones. Now, turning to marketing. Our key measure of our marketing efficiency is TROI, or time to return on investment. TROI is simply the ratio of dollars collected from new subscriptions acquired in a period to dollars spent on direct marketing costs in the same period. Our TROI in Q4 will be roughly seven to eight months, which is within our target range. We continue to see a high amount of annual subscriptions versus monthly, which allows us to reinvest marketing dollars faster. During the fourth quarter, 75% of our new subscriptions were annual. This is a significant increase from Q3, when we saw 65% of new subscriptions come in as annual. The increase is attributed to some yearend promotions we typically run in Q4 in addition to the overall trend we've seen towards annual subscriptions over the last several quarters. We are very pleased with this trend, which is a further reflection of the value our users' see in our platform. Looking ahead to 2015, our marketing strategy will be focused on positioning Wix to maintain strong growth and also a high rate of efficiency. As part of this strategy, as Avishai mentioned, we plan to increase our spending on branding activities this year. We feel the timing is right to market our brand on a global basis. While the return on branding is slower than direct marketing, longer-term we believe branding will increase our overall efficiency as we make more people aware of our platform and technology. I'd now like to spend a few minutes on our Super Bowl campaign. The Super Bowl campaign is part of a wide-scale cross-platform branding initiative, which went well beyond the TV airtime during the broadcast of the game. We chose a creative direction that ties directly into Wix's mission to simplify website creation and provide the ability to easily bring your business online. We amplified that message by creating a multi-layered social media and online marketing campaign through a gradual release of video teasers, photos, contests and more, that began weeks before the game. The evolving narrative and gradual rollout enabled us to secure consistent and large scale media coverage from diverse sources. Ranging from national broadcast to local online and offline publications, the coverage highlighted our success in creating a compelling and captivating story. While a campaign of this magnitude takes time to completely manifest its results, preliminary data is nothing short of outstanding. With over 120 million viewers, given the high ratings of this Super Bowl, along with the fortunate timing of our spot airing during critical part of the game, it is estimated that our 30-second spot was one of the most viewed TV commercials of all time. Combining those viewers with our online content, we estimate that our campaign has received nearly 300 million total engagements. In summary, we are very happy with our execution of this campaign and believe it is a great way to kick-off an exciting year for Wix. I will now hand it over to Lior to walk you through our financials.

Thanks, Nir, and thanks everyone for joining today. I will walk through our KPIs and results for Q4 and the full year and will also discuss the impact of foreign exchange rates on our financials. I will wrap up by introducing our outlook for Q1 and the full year of 2015. Please note that figures are non-GAAP and exclude stock-based compensation expenses and one-time items, unless I note otherwise. I'll begin with our KPIs for the quarter. Registered users as of the end of the fourth quarter totaled 57.9 million, a sequential increase of 3.8 million. We ended the fourth quarter with more than 1.2 million premium subscriptions, adding over 108,000 on a net basis during the period. Q4 collections were $49.3 million, a 61% increase over the prior-year period. Had foreign exchange rates remained constant from Q4 2013 through Q4 2014, our collections in the fourth quarter of 2014 would have been $1.4 million higher and a 66% increase over the prior year. For the full year of 2014, collections were $171.3 million, a 74% increase over 2013. Growth in collections was driven primarily by an increase in premium subscriptions. As we expected, in Q4, we saw an increase in the percentage of annual packages, which further drives collections growth. During Q4, 75% of new packages were annual compared to 65% last quarter. This percentage was higher than usual during Q4, because of some holiday promotions we typically run. Before going through the financials for the quarter and year, I'll spend a few minutes discussing the impact of recent changes in foreign exchange rates has had on our business. In 2014, approximately 72% of our collections were paid in U.S. dollars and roughly 20% was comprised of euros and British pounds. Other currencies we collect comprise less than 10% of our total collections. As we stated on our Q3 call, we hedge portions of both our collections and expenses through forward and option contracts. Currently, most of our collections in euro and British pounds are hedged through 2015 at favorable rates. Roughly 40% of our expenses are paid in Israeli shekels, which provide us a natural hedge as the dollar has strengthened globally. However, we took advantage of the strength of the dollar and hedged Israeli shekels for a portion of our expenses through 2015 as well. We have provided slides in our earnings presentation that outline how FX impacts our financial performance and shows the reconciliation of our financials, excluding the impact of currency fluctuations. I would like to highlight a couple of items. First, we are showing an adjustment to our collections for the amount that was impacted negatively by currency fluctuation in Q4. Second, we incurred below the line unrealized gains on our hedges for approximately $2.4 million, of which approximately $556,000 were realized in Q4. Because our hedges are not designated for hedge accounting, the benefits are recorded below the line instead of in collections and revenue. Since realized hedging gains and losses impact our cash flow, moving forward, we will include these in our adjusted EBITDA calculation. Moving onto our financial results, we have also included a slide that details each line item of our P&L for Q4 and the full year 2014 as well as comparisons to prior periods. I will now mention each line item and the changes here. So please refer to this slide for the detail. I will highlight a few things however. GAAP revenue was $41.6 million, which is 67% year-over-year growth. For the full year of 2014, GAAP revenue was $141.8 million, which is 76% higher than 2013. We ended 2014 with a gross margin of 82%, which was consistent throughout the year. R&D expense in Q4 was $14.4 million or 35% of revenue, which was a slight improvement of about 200 basis points over Q3. As Avishai mentioned, we invested heavily in R&D throughout 2014, but we are beginning to realize some operating leverage here as evidenced by Q4. While we will continue to invest in R&D in 2015, it will not be at the same growth rate as last year, so we expect to see additional operating leverage going forward. Marketing expenses were $26.3 million in Q4, which was 53% of collections. We saw a slight improvement as a percent of collections versus Q3, despite a roughly 10% increase in spend. This trend is a positive sign, as we continue to realize leverage over our marketing expenses due to our historical cohorts generating collections. We believe this trend will continue throughout 2015. A quick note on expenses related to our Super Bowl campaign. While we did recognize some of the creative expenses in Q4, most of the expenses related to this campaign, including the airtime, will be recognized in Q1 and incorporated in my outlook for the quarter and for the full year of 2015. Adjusted EBITDA, which include changes in deferred revenue and changes in prepaid domain registration costs, was negative $1.3 million, exceeding our prior guidance. For the full year, adjusted EBITDA was negative $11.3 million. For Q4, prior adjusted EBITDA was negative $9 million and negative $38.5 for the full year. CapEx in the quarter was approximately $900,000 in Q4 and $5.6 million for the full year. Free cash flow in Q4 was positive $100,000, an improvement from last quarter and negative $6.4 million for the full year of 2014. This negative $6.4 million include approximately $5.6 million in CapEx, meaning operationally we were nearly cash flow breakeven for the year. Our liquidity remains strong with over $86 million in cash on our balance sheet and no debt. Our employee count at the end of the quarter was 898. Our share count at the end of Q4 was 38.4 million. Let's now turn to our outlook for Q1 and for the full year of 2015. As Avishai mentioned, 2014 was a year of significant investments for us, as we build up a world-class engineering team, initiated several new marketing programs around the globe and put in place the necessary infrastructure to operate as a public company. Through 2015, we will continue to invest in R&D, though at a much lower pace. We will also continue to grow our marketing, especially our branding efforts, which we believe is the best way to maximize our return on our overall marketing. Finally, our product roadmap positions us very well for strong topline growth in 2015, and we now project a full year of profitability on an adjusted EBITDA basis. For Q1 we expect collections of $52 million to $53 million. Had FX rates remained constant from Q1 2014 through Q1 2015, our collection guidance would be roughly $2.3 million higher, revenue in the range of $43 million to $44 million and adjusted EBITDA of negative $3 million to $4 million. We typically increase our marketing spend significantly in Q1 each year, and 2015 will be no different. We expect marketing to be approximately 57% of collections in Q1, but fall to a range of 48% to 50% for the remainder of the year. This spending pattern is why we believe the second half of the year will be profitable at some point on an adjusted EBITDA basis. For the full year 2015, we expect collection in the range of $235 million to $242 million, which is being impacted by currency by roughly $10 million. Had FX rates remained constant from 2014 through 2015, our collections guidance will be approximately $10 million higher or $245 million to $252 million. We expect revenue in the range of $198 million to $202 million, and adjusted EBITDA for the full year is expected to be positive aiming the range of $2 million to $5 million. Some additional modeling considerations for the year, we expect CapEx in the range of $6 million to $7 million. We expect stock-based compensation expense of approximately $20 million to $21 million for the full year. Our basic share count is expected to be approximately 40.5 million shares at the end of the year. In summary, we were very pleased with our performance in the fourth quarter and are excited about 2015. With that, we will now take your questions. Operator?

[Operator Instructions] Our first question comes from Sterling Auty of JPMorgan.

I wanted to start with the Super Bowl ad that Nir you went into details. What's going to be the best way for us to monitor the impact of it? Is it going to be in registered users? And are you actually seeing some early, let's say, incremental uptake in registered users following the commercial?

So I think that when we look at the Super Bowl ad you're looking at one point in time. This is a part of longer strategy, which is the ability for us to increase the brand visibility. And I do believe that we did see some small change in free user registration on the day, but it was minor, it was not something big. But I think that the long-term effect that we hope to contribute to branding is going to be a part of increase, of course, in free users than better conversion, but more than that the exposure. I think that Wix today suffers from not having enough of brand visibility, and this is part of a long strategy to correct that and to announce our brand visibility going forward.

And then in 2014 you drove 67% growth in revenue and 56% growth in premium subscribers, suggesting that you saw a very healthy uptick in ARPU. Kind of curious if you could go into a little bit of detail as to what was driving that increased ARPU, whether it was just the monthly to annual shift or application uptick or what are the drivers of the increasing ARUP?

Actually it was like two main reasons. The first one was the fact that people are buying more expensive packages. Specifically, we are talking about the e-commerce, which was doing really great. I mean, we still see it coming and we see more and more people buying the e-commerce packages, which is obviously more expensive one. The other thing is about the App Market and everything that we've done in 2014, I mean we've seen increase in ARPU coming from the App Market. And we think that certainly with the ShoutOut that was lunched, and we are really, really satisfied with its performance, we think that it will continue in even better rate than it was in 2014.

So within the context of the outlook for 2015, how do we think about that balance of subscriber growth versus ARPU increase? Should we see maybe accelerating ARPU increase in 2015, being a bigger contributor to the growth outlook?

So I can tell you that in terms of the ARPU, and I am excluding right now the impact of the FX, which obviously none of us know exactly how it's going to be. So there are three vectors to that. The first one, yes, certainly, we should expect increase in ARPU coming mainly from the App Market. Second thing is increase in ARPU, because of the packages, well, this is harder to tell. But I do expect that there will be some increase in ARPU also coming from that. The second thing is about people that are moving to yearly packages, which obviously decrease in a way the ARPU. And the third thing is about the FX, which again, we don't know the effect of it. So I am not sure exactly, all-in-all what will be the effect of the ARPU.

And last question, just more of a administrative. The 75% of the new subscribers that shows annual in the fourth quarter, you gave us quarter-over-quarter comparison, but can you remind us what was that metric for the fourth quarter of 2013?

'13 was about 50/50. I think, definitely, what we've seen in terms of Q4 here was driven a lot by those campaigns in which we've pushed the annual more than the usual. We don't expect that to be the outgoing trend going into '15. Our assumption is that through '15, you'll probably see a rate of somewhere between 65% to 70% on an ongoing basis.

Our next questions comes form Nat Schindler of Bank of America Merrill Lynch.

Just two questions. Following-up on the Super Bowl commercial, roughly how much did you spend on that? And given that your history of being a very analytical marketing company, what gave you the confidence to invest in such a high cost branding campaign? And I have another question.

So maybe I'll answer the second part first. When we went to do that, I have to say that it was scary thing to do. It kind of like goes to a different direction than a normal direction, which is doing mostly things that we can efficiently measure and predict, and of course, that's something that we've never done before, it's on a different scale, and television doesn't tend to be too predictable, and basically you run it for a couple of times, and so it was very different than what we did. And I have to say that what we are measuring from that is mostly brand awareness. And couple of ways to do that. One is through a Google data report and how people react to different ads on YouTube and other places, and did it change something. And the other thing is that we actually do our own survey, where we ask people that are in relevant groups, to see if now they know Wix or compared to what did they know about Wix, and then we just do a big survey. And I have to say that, knowing today what I know about result in terms of brand awareness, I think that if I have to go back in time, I would definitely do the campaign again. Now, when you look at the actual cost of the campaign, right, so a lot of it is -- of course, we're not allowed to say the exact number of the Super Bowl ad, but I think that if you look at it, we actually end up paying a lot less than people would expect, I think also on the production, on the cost of the ad, the commercial itself. And big part of it was social media and regular marketing that we did before the campaign and after the campaign. So, well, we can't say the exact number, but I can definitely say that it's a lot cheaper than I think anybody would have believed that it actually costs. Especially if you add to do the sales and marketing budget as we normally do, we'll change to that and we're going to use the same idea even going forward. So I think that it was an important point in our marketing. And when I look backward, I have to say that a lot more successful than I would have expected.

And then just on a different note. Can you give us your impressions on how the competitive market have changed in this last year or so since you've been a public company and how that is affecting you going forward?

Well, I think that we did see that several competitors are spending big more money on marketing, which is expected, because some of them have raised money after we went public. So we do see that. I think that on a day-to-day basis, it means that before we went public, we had the less money, they had less money, and we competed and we won over marketing channel. Now, we have more money, they have more money, we think opinion-wise we're still winning the marketing channel, so it's very similar. And I think that overall, if you see that we were still there in the buildings website market and we continue to grow in that segment faster than anybody, but if you look at not just the website, but manage our business, so its at the App Store this year. And vertical application, I think that that space was still on our own, so there is nobody out there that actually is doing pretty much anything in that segment. And I believe that long-term that's the game that we will definitely win. That that's the play we will definitely win. So I think there's not a lot of change. I'm a bit surprised that our competitors did not yet manage to go and add anything into the business, more business management side, and I'll tell you that's why we hired so many engineers.

Our next question comes from Mark Mahaney of RBC Capital Markets.

Two questions please. I know you talked about the vertical products a little bit. Is there anything you can do to quantify the kind of traction you're getting for some of those products, that WixHotels, WixStores, et cetera? And then the cadence perhaps of the other verticals, I know you mentioned restaurants, that the cadence with which we should expect those to come out. And then I think you also talked about or mentioned in passing promotions to kind of boost annual subscriptions versus monthly? Could you maybe give us a sense of what kind of promotions you'll be running to do that?

So those are bunch of questions. Let me start with the first one, which is the vertical. So I just want to say that currently we don't have the restaurants yet out. I think it's going to come hopefully in the next quarter. So what we do see is that when we released a product, if you look at the hotels segment, for example, which is 98% of our users. But what happened when we released this product, the conversion jumped very quickly on that segment. And then we can see that the utilization of the application that is built to manage out those, even that currently it's the first generation, we have a moving plan, it is already driving organic growth from those segments. So the uptick from the percentage of the users, that's of the relevant segment, is very, very high. And I hope we can replicate some thing similar to that in additional segments that we are doing now. So of course restaurant is coming next. We have something there. I mean the ShoutOut, which we don't quantify necessarily as a vertical application, because its more of an email and let's you to communicate with your users, is something that we also see that -- and maybe a part of that [ph] number actually disclosed more exact numbers. We're seeing, again, surprisingly positive adoption. So I think that's answering your first part of the question. And for the next part about promotion I think Nir can speak.

So business promotions, generally promotions are just a part of our general marketing strategy. We don't have kind of the global annual schedule. We usually use them for a variety of reasons, that have to do whether it's promoting new products or pushing more aggressively to new geographies or supporting specific periods of time, which we know are slow in traffic, such as this big national holidays, et cetera.

Our next question comes from Kerry Rice of Needham.

Couple of questions. Maybe the follow-up on the last one, maybe more specific on some of the product updates or launch dates that you had talked about, WixStores, WixJet how that is progressing? And then a follow-up on or maybe expand, can you talk a little bit about mobile. You've got kind of the native app relaunch coming? And then could you talk a little bit about how many mobile sites are up there and how many were added in the quarter? And maybe how many apps are in the App Market?

So I'm not sure, so Joe was very quick here to write it out. I'll see if I can follow it on with him. So WixStores is already being released as we speak. We actually have a, what we call, a gradual release to that, and I think currently it's about 50% on the user adjoining the functionality. So we are very proud, we're getting actually fantastic feedback from that product, so it's super exciting. WixJet, again I think that it's at the100% now, and again we're getting really super positive feedback about it and we're really happy about to see all the improvement in performance. I think it's always been something that we care a lot about and we consider the results are dramatic. And I think the next part you're asking about mobile. So in mobile, we divide it in two things the native app native app and the mobile websites. In the mobile website builder we're currently at 6.2 million in mobile sites probably is to date, which is a 300% year-over-year growth, which we think is amazing. It still by far I think the largest mobile platform builder in the world and we are very proud of it. In regards to Appixia, so Appixia, which is the native commerce application on mobiles, it's still not launched. It was waiting for -- we need to add the e-commerce, the new WixStores products at the 100%, before we can launch it. It probably going to go out a month or two after, WixStores go for 100%, because it uses the WixStores' API to implement the application. So I think that was all the questions or did I miss one?

How many apps in the App Store these days?

250.

Our next question comes from Jason Helfstein of Oppenheimer.

Just wanted to dig a bit deeper into the marketing. So when you guys are trying to figure out the positive impact and how successful something like TV campaign and so, so just a few things to start. So when you look at your total marketing, what's the breakdown between digital marketing and then, we'll call kind of, offline like TV and other? And then do you guys have an unaided brand awareness score today and perhaps what it was, I don't know, six months ago, a year ago, something so we can kind of understand trending? And so that thing maybe you think about updating, as we move to the year to try to see the impact of the campaigns you've done? And then also I think there was some headlines, RKG scored you guys very high for effectively leveraging that Super Bowl campaign into other digital channels, social, e-mail, et cetera. So maybe talk about that? And then just lastly, any comment about the Google Domains initiative, you're one of the partners, how aggressive do you see Google promoting that initiative? And are you assuming any impact on subs from Google Domains this year?

I'll start with the last two questions, and then hand it over back to Lior for the marketing budget thing. In terms of the Google Domains initiative, there hasn't been a huge change yet. Again, it is due to Google side, in which they are still testing around whether they want to drive a lot of traffic there or not. We are a 100% dependent on their pace there. And then in our models, we don't model the Google Domains as a key driver, and if it turned into something like that that can be a nice surprise. In terms of the Super Bowl, I think that's very interesting, and it goes back also to, as Avishai said before, indeed if you've seen that report, we kind of took the added sales as an anchor for a very wide campaign that lasted for more than three weeks. And basically took into account almost every possible online and marketing that you can imagine, from video teasers that went up on Facebook and Twitter and YouTube to contest that we ran through the NFL players social outlets. So a lot of coverage we got in a lot of [ph] digitalization on media. And that's also why we are still very happy with it, because we think that it's a great way to create an impact, not through a one-time big hit ad, but through something that last over like almost a whole month of a campaign.

Do you have that an unaided brand awareness score that you can share and kind of what maybe that number has been historically?

This is something we are still working in kind of sense of learning and we'll do public comment more about that in the future. I do think that at this time while the initial studies shows that we received over $6 million of media benefits estimated obviously, because this thing cannot be a 100% accurate. It will take us more time to fully understand the impact both internally on core and TROI and as such, and also in terms of studies of brand awareness, which we are currently conducting. And Lior, do you want to take the first part about digital versus TV.

So Jason, the overall TV or public media that we had in 2014, approximately 40% over the budget, which was consistent more or less for the entire year, was due to TV and public media compares, all the rest is mainly search in Facebook and other affiliates.

Our next question comes from Tim Klasell of Northland Securities.

Just want to hit a little bit on the customer acquisition cost of North America versus the rest of the world, because clearly the Super Bowl and a great success there, but it's primarily geared towards Americans. Can you give us a little bit of color of how you look at acquiring and a cost of acquiring a North American customer versus an international customer or somebody outside of North America?

I think that when we think about cost of acquiring customers, so we pretty much follow the same rules everywhere, which is how much we spend on the acquisition and how long until the users spends money it takes in order to return the cost of that marketing acquisition. So of course, in some countries people tend to buy more expensive packages, some countries people tend buy less expensive packages. Some countries people like the United States or U.K., people convert better and tend to buy more expensive packages, but also the price of advertising is more expensive. So what we always do is that we work according to that ratio. And we try to make sure that the ratio is the thing that guides us and this is what we call, TROI, time to return on marketing investment, which is based on dollars, acquisition cost dollars that we get back from the user and the time that it took to return them. And in fact, the thing that we've been very good at maintaining a pretty much constant TROI over all geographies that we are operating in and which is currently I believe between seven months to eight months.

And then just as we look forward, obviously your Super Bowl efforts were a success, should we sort of think about having that maybe every year or is that too early to tell you?

Well, if our Chief Marketing Officer can guarantee that we get such an exposure and such a really positive result, maybe. I think that there is a pretty good chance. We were really happy about it. I think that that, again, as we said, if we can go back in time and choose again, I would definitely go and do it again.

And then your conversion rate continues to tick up. As you went throughout the year, was there any particular lower churn, new geos in other vertical apps? Was there anything that jumped out at you guys that's helping out the conversion rate this year, particularly as we trended into the second half?

And so in terms of conversion rates as well as improving share, which both go back to that active subscriptions graph that we have on the slide show on our IR site, it's a combination of a lot of changes over the year that contribute to it. And definitely we've seen I think a big improvement in terms of the conversion and a smaller improvement, but still an improvement in terms of the churn. And it's mainly about two key things. One of them is an ongoing effort to help people finish their website, whether it's by adding functionality that they are missing. So Avishai gave a great example, with the hotels for hotel owner, and I think that having the ShoutOut is a way to communicate with your customers is also something, which obviously contributes to your ability to do and manage your business from the site the way you want it. So a lot of it is, as I said, just adding the capability to finish and have the site that you wanted. The other part of that is making the user interface easier to actually be the user to navigate through the editor and get things done. So that's kind of the product side of it. The other side is allowing people to pay in different geographies. Outside of the U.S. North America, maybe Israel, it's much harder to create a subscription tool with international credit card, because most people don't have it. And overtime we've learned how to do that and we keep on improving the billing solutions for our propitiatory billing system to give better support to other parts of the world. We've done a great, tremendous, improvement in Brazil a few years back. So this year we have improved a lot in Russia. We are still making a lot of changes in Europe, in Central and South America. And all of these things together contribute to both the better conversion and better churn.

And our final question comes from Aaron Kessler of Raymond James.

First on, I know some of the sites today there are 50% promotions. So how long should we think about these lasting? I guess when do that start and then just any thoughts on this price competition going forward here between some of the other players in the market? And then just on the guidance for 2015, any thoughts kind of how much currency impact of the growth or the revenue estimates on the currency side?

So I will start with the FX impact on the 2015 guidance. So what we provided is the impact on the topline in terms of collection. We said that it will be approximately $10 million, meaning how do we calculate the 2015 collection based on the average of 2014 currency that would be the result. In term of the revenue, well, it will be a bit less than that, because of the nature of the revenue. And I guess that over there it will be around $7 million, meaning less than the impact on the collection.

In reference to the promotion, as I said before there is no kind of a hard-coded schedule. The cards promotion you've seen is a Valentine's promotion that aims at kind of -- we think that there might be a slightly lower traffic from the weekend, and since it's also President's Day on the other end of it. Usually, these things last for few days and not more than that. End of Q&A

Thank you. That does conclude the Q&A session for today. Ladies and gentleman, thanks for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day.