Good day, ladies and gentlemen, and welcome to the Wix.com 2015 first quarter financial results conference call. [Operator Instructions]. I would like to 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 first quarter 2015 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, 2014. 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 of 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 first quarter results. Management’s prepared comments on today’s call have also been posted to our IRsite. With the formalities out of the way, I’ll now turn the call over to our Co-Founder and CEO, Avishai Abrahami.

Thanks Joe, and thanks to everyone for joining us. Consistent with the updated outlook we provided in March we are off to a very strong start in 2015. Today, I am going to share with you our progress on some of the initiatives I discussed on our last call as well as highlight some of the themes that we shared during our Analyst Day in March. Nir will provide some additional details on the quarter’s performance, and Lior will wrap up with financials. So let’s get started. In the first quarter, collections grew 49% year-over-year to $55.9 million, which is $3.4 million ahead of the midpoint of our original guidance for the quarter. Excluding the impact of changes in foreign exchange rates, collections increased 59% year-over-year to $59.6 million. Excluding the Foreign exchange impact, we exceeded both our original guidance in February as well as our increased guidance in March. Revenue was $44.5 million, which is 54% year-over-year growth We added 138,000 net premium subscriptions in the quarter, bringing our total to 1.37 million. This is the most subscriptions we have added in a single quarter in our history. Our adjusted EBITDA in the first quarter was nearly breakeven. This result is $3 million ahead of the midpoint of our original outlook in February and $1 million above our updated outlook in March. With this outperformance, I am happy to say that we now expect to reach profitability beginning in the second quarter, which is ahead of our forecast from the prior quarter. I’m really happy with this quarter’s performance as we continue to build on the momentum into the rest of 2015. On our last earnings call and at our last Analyst Day in March, I discussed our priorities for 2015 as well as our longer term vision for…

Thank you Avishai. As Avishai mentioned, we had a very strong first quarter that exceeded expectations. We added nearly 4.6 million registered users during Q1. This is the largest increase in the number of users we have ever experienced in a quarter and brings our total to over 62.5 million, a 35% increase over where we finished Q1 last year. We also added over 138,000 net premium subscriptions, our largest increase ever, bringing our total to 1.37 million at the end of the quarter. This figure represents annual growth of our premium subscriptions of 51%, which is much higher than our user growth rate. This tells us that our freemium model is working as we continue to see conversion from users who joined Wix in the past periods and for which we already invested marketing dollars. Our recent performance is illustrated in the positive trends we continue to see in our user cohorts. In the slides we have posted on our IR site we have updated our cohort data from our last six Q1’s, including Q1 2015. As can be seen in the chart, our older cohorts continue to generate new premium subscriptions and collections, several quarters after we spent marketing dollars to acquire the users. Our cohorts also show that we are retaining premium subscriptions at a consistent rate as we have in the past. This strong performance of our cohorts is providing leverage on our marketing and R&D spend and bringing us closer to profitability. The trend of a high amount of annual subscriptions versus monthly continues, allowing us to re-invest marketing dollars faster. During the first quarter 74% of our new subscriptions were annual, and as of the end of the first quarter, 77% of our total subscriptions were annual. We target a time to return on…

Thanks Lior. To summarize, I am very happy with our performance in Q1, which was well ahead of expectations. We continue to differentiate ourselves by delivering great products and technology to small businesses globally. Our growth in subscriptions and collections remains strong, and we are now expecting to reach profitability faster than we had originally forecast. We’ll now take your questions.

Thank you. [Operator Instructions]. Our first quarter comes from Sterling Auty of JPMorgan. Your line is open.

Yeah, thanks. Hi, guys.

Hi, Sterling

Want to start with in terms of the premium subscriptions, can you give us a sense of what percentage of those came from new registered users this quarter?

Yeah, so about 40% came from registered users in this quarter with 60% coming from previous orders?

So it feels like, and correct me if I am wrong that the conversion of previous quarter cohorts has started to get a little bit better. Can you maybe walk through what programs, and items are helping that conversion?

Absolutely Sterling this is Avishai and I think that the majority of the change compounded action of the vertical products and another product changes. I think that in addition to that one of the thing that was happening a little bit is improvement driven and so a lot more people get what they wanted. I think that is the biggest combination.

Okay. And then as follow-up on the vertical solution that you’ve launch so far could you characterize what the up-tick and what the ARPU for a vertical solution looks like versus just the generic packages?

So, Sterling this is Lior. With result to the ARPU, obviously the ARPU is higher than the other packages that we are seeing. These is part of the reasons why we on a constant dollar basis we actually improvement in our outflow globally. So if you take for example, the WixShoutOut or the Audiotex Nat definitely the ARPU is higher than the rest of the packages.

Okay, got it. Thank you.

Thank you. Our next question comes from Mark Mahaney of RBC. Your line is open.

A couple of questions. First on the vertical offerings, I think you talked about traction for these verticals like WixHotels and WixStores. Is there anything you can quantify about how material they are either number of subscriptions or percentage anything like that?

I think at this time we are still not disclosing the full numbers but for example I can give you one example which is the e-commerce package, the new stores, so just this year we have 91%, it will Nat grow from items sold in the stores which is pretty astonishing for us. So and of course it’s a more expensive package, it’s about 60% or 70% more expensive, it’s a package on average Nat so it is substantial. As a vertical of course it doesn’t reflect on all of our customers only on with e-commerce and approximately 10% of the total subscribers. Hotels of course is going to be smaller than that, ShoutOut is actually growing and surprising very much still I think is smaller than 10%.

Okay. And I think you mentioned that during the first quarter 74% of the new subscriptions were annual but 77% of total subscriptions were annual. I don’t know if that’s meaningful or not, but there is maybe a slightly a greater skew amongst the new subscriptions to -- I guess monthly or quarterly subscriptions. Is there any -- do you read anything into that, is that good or bad or is that a trend that you think that will continue. Overall I know it’s been a mix shift towards annual, is there a particular reversal this quarter or something?

Actually there hasn’t. I think that we actually -- if you remember about when we spoke about the Q4 numbers we mentioned the fact that there was an increase in annual, that had to do with some special campaigns we ran around the holidays and we expected that Q1 and ongoing to be somewhere between the 65% to 70%. We actually managed to over achieve on top of it towards the 74% that I mentioned. We still believe that going on -- a going forward we probably should expect it more or less around 65% to 70%.

Okay. And then two last questions, one of the trends that we are seeing with mobile devices is larger screen sizes, what kind of implications does that have for you, do you see that, is there a technology challenge for you in terms of your offering or is that more of an opportunity for you, if you could just talk about as mobile devices are more and more important but especially large screen mobile devices, is that what the implications of that are? And then any quick comments on traction for the Wix apps? Thanks a lot.

Well so first of all I think that there is enough opportunity. I am a Samsung note owner and I can see that in most cases websites are not optimized on my device, they are more optimize to the standard iPhone 6 or Samsung 6 screen size. So there is a lot of room left and we believe that there is a way for us to introduce another level of design, of another screen size. So this is something that we will experiment with. I have to say that in some cases like my case is the reason is that there is a bigger screen is because it’s harder for me to see the smaller letters. So it might not be absolutely -- so I think there is an opportunity to an additional way for websites and content to adjust into different screens. We also see the other side of it right which is two years ago three years ago huge screens were I think very uncommon. Nowadays customers -- almost everybody almost office and many places you can find people sitting with a 32 or 40 inch or 50 or 70 mounted on a wall and we believe that that’s another thing that we should be addressing.

And Mike this is Nir in terms of the up market we can say that there is an ongoing increase in the uptick variance and we are very happy with it. In fact in the last quarter we saw an increase of almost 40% in terms of installation from the up market and close to 4 billion Nat installations only in Q1, and I think it’s a great testimony to the fact that it add huge amount of value to our users and helps them build better website that they need one.

Thank you, Nir, thank you Avishai.

Thank you. Our next question comes from Nat Schindler of Bank of America. Your line is open.

Yeah, hi guys. Thanks for taking my question. I was looking at slide nine in your deck of slides you have had many times in the past but I wanted couple of questions on this, on your marketing efficiency slides and how fast you get a return on your investment. If you look back to the Q1 ‘13 and the Q1 ‘12 cohorts, so looks like that was a VLC change going on right there, at that point you basically were getting all your return. There seems to be some sort of an acceleration and I would wonder if you could comment on it or see anything in which that after nine quarters you were getting almost the same return as you are getting after 13 quarters when you come into Q1. Secondly, I want to know if you could talk a little bit about what Q1, how Q1, ‘15 a one quarter cohort looks like to previous Q1s on a one quarter basis there was specifically the impact of the Super Bowl add and how that campaign and VISA Nat campaign actually affected in the acceleration in North America where it would have been effective or the like? Thanks.

Okay, so Nat I'll take the first part and Lior will pick up the second one.

Yeah, you go to the first one.

So in terms of, if you look at those cohorts of '12 and '13, then our [indiscernible] in those quarters were actually shorter than it is today. It was four to five months and if you remember when we took the company public one of the things that we talked about is that our believe is that [indiscernible] target is actually too short and we are leaving too much money and too much market share on the table and our aim was to increase it towards the rate in which we are today which is somewhere between seven to eight months. That the rate is actually I think is of Q1 of last year or a bit after that, that is the rate that we are maintained as the target and it is been the same ever sense, consisted probably to be very similar also to the current quarter. In terms of the 2015 Q1 quarter, Lior do you want to take it?

Yeah. So Nat with regards to the Q1 '15 there are two ways to look at it. So if we exclude the portion of the branding of the Super Bowl, so actually the performance was a bit better than the Q1 '14 meaning, that a TROI Nat was actually on the bottom range of seven to nine months where we usually are. Obviously when we include the entire cost of the Super Bowl, including branding it was a bit more than that. And I think this is the right way to look at this to try to exclude the branding, because the effect of it is all the time. So in general we actually really are satisfied with the TROI if we are excluding the branding portion.

I want to say one other thing Nat about that is well if we manage to increase traffic in a significant manner and actually bring another half a million registered users which is the growth we had last quarter while maintaining a similar conversation we feel that we brought high quality user basically and that is actually we, we see that as a great achievement.

Great. Thank you. But just following up could you give any sort of data on how the Super Bowl campaign affected growth rates by region, so did you see any sort of significant change in the regions where the Super Bowl campaign was effective i.e. North America?

So yes, actually the most effect was indeed in North America that’s going to be expected, Nat?

Oh great. Thank you.

Thank you. Our next question comes from Kerry Rice with Needham. Your line is open.

Thanks Lior. Maybe taking a little bit different topics on international growth particularly around Latin America and Asia, can you talk about what you are doing there, you are seeing some really tremendous growth both there, also in Europe, but maybe more specifically in China and Latin America, first question. And then the second question is you know you also offer some domain names you have a partnership with Google. I don't know if you could update us on that at all and then maybe what you think about the main name business in general and whether that's an area that you would ever think about investing in or you'll leave up to the bigger players in the market? Thanks.

Okay. So this is Lior. I will take the first question about the geographic trend that we see. So actually you are right, South America actually was really, really great. I think that it could have been even better with all the strength of the dollar, over there especially with the Brazilian reais. But generally what we do right now, we actually are increasing penetration to more countries in Latin America, continue the focus Nat in Brazil, in Mexico, Argentina and Colombia and we have also many plans in 2015 to continue that. So we are very excited about that and we see really good results in South America. With regard to the other places and you have asked specifically about China, so China it's a different issue, it's about regulation and this is something that we are exploring. In 2015 we intent to penetrate to other countries, for example India. So we are doing lot of efforts right now and also places like continuing in Europe and East Europe.

This is Nir. I will grab the second question about the domain name. So specifically about the Google domain name partnership it's still going relatively small scale driven by the pace that Google is taking. At this point we are not modeling it into our growth and obviously if it suddenly pickup -- picks up that would be very complementary to our number. Generally speaking about domain names and you asked whether we are considering to how we think about that area. At this stage we don't think that our expertise is in selling domains and our belief is that it will keep on partnering around that area and not try and do something significant on our own. So currently that's the strategy for and we don't intend to change it any time soon.

Thanks a lot. Appreciate the question.

Thank you. Our next question comes from Jason Helfstein of Oppenheimer. Your line is open.

Hey Ben I wanted to dig in a bit to churn. It does look like churn is improving. If you can give any kind of color on kind of how churn trended either in the first quarter or kind of as the trends we've been seeing it does look like it's improving. And then second question on the hedging, do you guys factor into your guidance effectively what you can already tell is the realized value or the realized gains on the hedge or is guidance just assuming current constant currency and then kind of the hedge will be kind of the upside later. Thanks.

Yeah so this is Nir. I'll take the first question about churn and handed over to Lior to take about hedging. So in terms of churn yes there is a certain improvement and it’s taken here in the fact that more people are buying annual, kind of the extent is more people are buying annual than our own annual subscription and less people that are cancelling subscription within the first year. Obviously that's part of the positive and why we think that the improvement in the percentage of annual is a great thing. I think that another part of it is also the ongoing improvement obviously of older products improvement which I mentioned before that's not only drives better conversion on the course but obviously also better retention.

Jason this is Lior. With regards to the hedging what we take into account when we report on our adjusted EBITDA is obviously the realized gain on the hedging. When we provide the outlook for the year we take into account the unrealized gain on the hedging. When you think about it, it makes sense because if for example the dollar continue to strength, so in the future we have a higher gains from hedging but obviously decreasing collection and if it's the opposite so we will have less hedging profit but more collections. So in total it is actually compensates on the other. With regard to be top line so we are using the current spot when we try to focus the top line in any case the hedging is not part of the topline, everything is part of our financial income or expenses.

Thank you.

Thank you. Our next question comes from Jeff Parish Nat with Raymond James. Your line is open.

Great, thank you very much. With respected to your TROI you talked earlier about you have moved it moved it up prior to the IPO and now it is seven to nine months. Post your Super Bowl experience is there any desire to get a little bit more aggressive with that TROI, maybe go beyond that seven and nine month rate you are seeing on currently?

At least, not in the short term. Currently we still look at it as that we have enough do with the current range, and so until we are going to utilize a lot of it, it will probably stay at the same rate.

Got it. And then with respect to just products roll-outs obviously we are seeing a lot of new verticals roll out over the past year and it sounds like you got pretty good traction in eCommerce WixShoutOut and some others. Can you talk about how you contemplate going forward getting more monetization out of those platforms versus rolling out more products? It seems like there is kind of balance between how quickly you ramp new verticals versus how deep you get in to any particular vertical? Thanks.

Well of course it is always a question of TROI, if we have enough it could probably do a lot but we have to decide on when we would grow the current processes and so, we are going to see still adding a branch of a new vertical in the coming year and doing some other innovation with new products. But we are also very committed to the investing in currently what we are doing and so eCommerce is coming, we will be doing a lot of modification and addition and you are going to see that the hotel Nat is doing a major release not in the far future. So currently we are focusing a lot on doing better what we are doing now but we are also committing to releasing a couple of new verticals.

Great, thank you.

Our next question comes from Tim Klasell of Northland Securities. Your line is open.

Yeah, good morning everybody. Two quick questions, on your vertical strategy can you give us some ideas of where you are thinking next, I don’t need the exact details but you are rolling this out, when should we expect to see something?

Can you repeat your question? It is very hard to hear.

What are the verticals are you interested in besides hotels and restaurants?

I think that we are not at the habit of usually discussing that ahead of time. But I will say that there is -- there are three on the current development table and one of them is with consultancy.

Okay, great. And then FX impact on the quarter, on the bottom-line? If you could answer that?

So we mentioned, that if the currency was remained the same as last year we could have been in a position where we see approximately $4 million more in collection. On the other hand we have profit of about $1.5 million from hedge that we have done in the past with favorable rate. And in addition to that we had some profit and benefits from the Israeli shekels to the dollar. So in total, on the bottom line the impact was about $1.5 million.

Great, thank you very much.

Our next question comes from Mitch Bartlett of Craig-Hallum. Your line is open.

Hi, good morning. So a number of questions today have been about conversation rates and I think the first question from Sterling I think it was talking about the conversion rates off of the existing base and obviously in my model it is pretty strong as well. But I am interested in that conversation rates you are getting from new or registered users given that there was such a high percentage of the budget that was the branding at a Super Bowl? In my model it looks like it was fairly flat with last year, which I would think would be significant victory given the branding and the Super Bowl and what not. But you can talk about what that Super Bowl did to kind of conversation rates with and without that extending for new registered users in the quarter?

I just want to say one before and Nir is going to continue and elaborate that but when we think on conversion we almost never look at it from a free to paying in terms of percentage. We always measure it on dollars, and I will explain. There are two traffic sources. One of them brings thousand free users and five of which we convert to premium accounts, that’s 0.5% conversion. We have another source of traffic, that there is a smartphone user which convert to premium, that’s 100% conversion, if both cost the same right. So of course the first one 0.5% conversion that is by this five time better for us than the second one which is 100% conversion. So that’s why we always like to more view it from TROI as a perspective than from a percentage perspective. However we do view the last quarter as a big success because of our addition to grow on branding and you can see the same efficiency and that we believe is a really huge success. And the other thing is that you probably we believe that we should divide the Super Bowl on a couple of months, something that we didn’t really do here but because practically the effect of branding are long-term and not just short-term. We did see however for example that conversion to click on ad has improved for example. So that’s something that we didn’t predict like people would click more on ads that caused a higher exposure in branding.

Yeah I just want to add to Avishai’s last point if you remember on the Analyst Day, Omer, our CMO mentioned exactly that that we do have an independent study that showed that an uplift of up to 40%, the chance user that is Google ad click on that link if he has seen our Super Bowl campaign for that and that’s obviously a great success.

Very good. Just the last question is was the percentage historically advertising as a percentage of the sales and marketing line has run around 75% or so. Was it substantially higher this quarter is Q1?

You are talking about the percentage of our commercial part of…

The percentage of sales and marketing, that is great…

Yeah so if we exclude the Super Bowl it’s more or less remain the same as it was during 2014, obviously if you add the Super Bowl it was higher.

Got it, that’s perfect, thank you.

Thank you. Our last question comes from Samad Samana of FBR Capital Markets. Your line is open.

Hi, thanks for taking my questions. Guys as you think about the sources per premium subscription growth for the rest of 2015, how would you rank it from converting existing Freemium users versus new subs versus improving the churn rate in the base? And then I have a follow-up to that.

How would we what?

I guess what do you think the biggest source of premium subscriber growth for the rest of 2015, is it converting existing base or is it bringing in new users and how much are you baking in churn improvements?

Well we do hope that it’s not going to be based just an existing channel right we want to see that we’re getting more customers coming in. I think it’s going to be a combination of better conversion and we have some really good initiatives that you are going to see coming go forward in the year and then we’re going to continue on leverage on international expansion again, solid billing payment of our customers, and we hope that Q3-Q4 we’re going to start enjoying benefits and more benefits from that.

Got you and then you mentioned Google and the change of the algorithm has the company noticed any change in traffic trends or new user sign ups since that information came after the first quarter close if you noticed any difference in customers coming to Wix?

No, I think that was significant or that is worth mentioning. I think it will take probably also a while for people to actually understand the Google changes. It’s not it’s very technical but the significance is huge but explanation is very difficult.

All right, and then one last one for Lior, so Lior the mix continues to favor annual versus monthly subscriptions, I guess the company is pointing a longer term range of 65% to 70% of new contracts being annual, how much or what are you baking into your collections guidance for the year in terms of percentage of new contracts being annual versus month-to-month?

So obviously we take it into consideration when we do the forecast of the collection in trying to predict what will be the annual. We like the trends of people moving to the annual subscription because we can meet with the money sooner and obviously we take it into account, so which means that if we see that this trend continues and there is no reason to believe why it's not, so obviously a bigger portion of our collection will be coming from delivery subscription.

Great. Thanks for taking my questions and nice quarter. Thank you.

Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect.