Wix.Com Ltd (WIX) 2014 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Wix.com 2014 Fourth Quarter and Full-Year Financial Results conference call.

At this time, all participants are in a listen-only mode. Later, we'll conduct a question and answer session and instructions will begin at that time.

(Operator Instructions)

As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Joe Pollaro, VP Strategic Partnership Investor Relations. 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 contained in our annual report on Form 20F 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 the 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 relation 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 our site. I'll now turn the call over to our co-founder and CEO, Avishai Abrahami.

Thanks Joe and thanks everyone for joining us. We concluded 2014 with another strong quarter for Wix and we exceeded our prior outlook once again.

Today, I'm going to spend a few minutes summarizing 2014 and discussing our priorities for 2015. Nir will talk 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 collection in 2014 were $171.3 million a 74% increase over 2013. Revenue was $41.6 million, which is 67% year-over-year growth. For the full year of 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 a conclusion of a year in which we made significant investments 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 and 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 head count and with an updated technology platform that we build in house.

And we strengthening our internal systems to support the operational required for a growing public company. This investment has positioned us well to become the platform for small businesses to move online and not only to create great websites by also to managing and grow online.

We have great momentum going into 2015 and I'd 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 websites and incorporate functionality to manage and grow their businesses online, the likelihood 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 editing experience of 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 the 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 convert from free 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 top line 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, 2015 was an important year for Wix. We made significant investments across the entire company and we grew our business over by 75% of the top line. We're now ready to reap the benefits from this investment and I'm excited by how we are positioned for 2015 and beyond.

I'll 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've made an impressive number of announcements, 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 Big Stock directly through our editor and add that content to their Wix site.

We've 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 their customers.

ShoutOut is now a freemium offering and we've 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 work flow online.

We launched Wix Hotels and Wix Stores 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 Office 365 platform allowing subscribers to 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 the 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 the website creation and expands to enabling critical business work flow online.

Many of these products and technologies will not drive meaningful revenue in the near future, but they will improve the value for our platforms 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 I.R. website, we have updated our current data for our last 5 Q1's. As can be seen on our Q1 2014 cohort, the green line, we continue to convert users into premium subscriptions at the 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 the cohorts for additional users, we continue to harvest collections from this cohort for several years without having to reinvest in marketing for 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 high amounts 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 our new subscriptions come in as annual. The increase is attributed to some year-end promotions we typically run in Q4 in addition to the overall trend we've seen towards annual subscriptions over the last several quarters.

We're 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 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 gross 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 provides the ability to easily bring your business online. We amplified that message by creating a multi-layered social media and online marketing campaign for a gradual release of media 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 estimated 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 would 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 we'll 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 period. Had foreign exchange rates remain constant from Q4 2013 to Q4 2014, our collections in the fourth quarter of 2014 would have been $1.4 million higher, 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 drove collection 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 to the financials for the quarter in the year, I'll spend a few minutes discussing the impact of recent changes in foreign exchange rates as 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 comprised of less than 10% of our total collections.

As we stated on our Q3 call, we hedge potions of both our collections and expenses to fold an 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 provides us a natural hedge as the dollar has strengthened globally. However, we took advantage of the strength of the dollar and hedged Israeli shekel for a portion of our expenses to 2015 as well.

We have provided some slides in our earnings presentation that outlines 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 and realized 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 collection and revenue. Since realized hedging gains and losses impact our cash flow moving forward, we will include this 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 for the full-year of 2014, as well as, compressions to prior periods. I will not mention each line item and the changes here. So please refer to this slide for the details. 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 1$4.4 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 evidence of Q4. And 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 collection versus Q3 despite a roughly 10% increase in spend.

This trend is a positive sign as we continue to realize the leverage over our marketing expense 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 air time, 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 pre-paid 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 million 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 includes 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 2015. As Avishai mentioned, 2014 was a year of significant investments for us as we built 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 program positions us very well for strong top line 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 remain constant from Q1 2014 to 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 of 2015, we expect collection in the range of $235 million to $242 million, which has been impacted by currency by roughly $10 million.

If FX rates remain constant from 2014 to 2015, our collections guidance will be approximately $10 million higher or $245 million to $252 million. And we expect revenue in the range of $198 million to $202 million and adjusted EBITDA for the full-year is expected to be positive and in 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?

Thank you. (Operator Instructions)

Our first question comes from Sterling Auty of JPMorgan. Your line is open.

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

Well, hey, Sterling. This is Avishai. 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 a longer strategy, which is the ability for us to increase the brand's visibility and I do believe that -- well, we did say there's some small -- some small change in user registry or registration on the day, but it was minor. It was not something big.

But I think that in the long-term effect that we hope to contribute to branding is going to be farther increase, of course, in users -- in users -- in free users and better conversion, but more than that, exposure. I think that Wix today suffers from not having enough of brand visibility and this is a part of a long strategy to correct that and to announce our brand visibility going forward.

Got you. Got you. And then in 2014, you drove 64% -- or I'm sorry -- 67% growth in revenue on 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 annual shift or, you know, application uptake or what are the drivers of the increasing ARPU?

Hey, Sterling. This is Lior. So 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 a more expensive one. The other thing is about the App Market and everything that we've done in 2014.

I mean, we've seen it increasing in ARPU coming from the App Market and we think that certainly with the shoutout that was launched and we were really, really satisfied with its performance, we think that it will continue in even better rates 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, you know, sort of growth outlook?

So I can tell you that in terms of the ARPU, and I'm excluding right now the impacts 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 increasing ARPU coming mainly from the App Market. Second thing is increasing ARPU because of the packages where this is harder to sell. But I do expect that there will be some increasing ARPU also coming from that.

The third thing is about people that are moving to our yearly packages, which obviously decrease in a way the ARPU. And the fourth thing is about the FX, which, again, we don't know the effects of it. So I'm not sure exactly all-in-all, you know, what will be the effect of the ARPU.

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

Of '13? '13 was about 50/50. You know, I think definitely what we've seen in terms of Q4 here was driven a lot about by, you know, those campaigns in which we pushed the annuals more than usual.

We don't expect that to be the ongoing trend going into '15. Our assumption is that through '15, we will probably see a rate of somewhere between 65 to 70% on an ongoing basis.

Got it. Thank you.

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

Yes. Hi, guys. 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 then I have another question.

So -- and so maybe I'll answer the second part first. I think that it was a -- when we went to do that, I have to say that it was a scary thing to do and 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 we plan to run it a couple of times. And so it was very different than what we did. I have to say that what we are measuring from that is mostly brand awareness and a couple of ways to do that, one is through -- Google does a report on how people react to different ads on You Tube and other places and really change something and the other thing is 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 do they know about WIX and then we just do a big survey.

And I have to say that knowing today what I know about the results in terms of brand awareness, I think that if I had to go back in time, I would definitely do the campaign again.

Now, when you look at the actual costs of the campaign, right, so one 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.

So I think also on the production only cost -- the commercial itself. However, a big part of it was the social media and the regular marketing that we -- before the campaign and after the campaign.

So, I think that it's - can't say it exact now but can definitely say that it's a lot cheaper than I think anybody would've believed that it actually cost especially if you add together the marketing budget that we normally do to that and we're going to use the same materials even going forward.

So we would -- I think that it was an important point in our marketing and when I look backward, I have to say that a lot more success than I would've expected.

Okay. And then just on a different note, can you give us your impressions on how the competitive markets 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 the -- well, we did see that some of our competitors are spending a bit 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 less money, they had less money and we competed and won over our marketing channels. Now, we have more money, they have more money, we're still competing, we're still winning the marketing channels. It's very similar.

And I think that overall if you see that people are still migrating, they're building a website market and we continue to grow in that segment faster than anybody, but if we look at not just the website, but manage your business, so it's the app store, the CRM, the vertical application, I think that if that space were still on our own, so there's 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'll definitely win.

That's a play we'll definitely win. So I think that 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, but hey, that's why we hired so many engineers.

Great. Thank you.

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

Thank you. 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, the Wix Hotels, Wix Stores, et cetera? And then a cadence perhaps of the other verticals.

I know you mentioned restaurants, but the cadence with which we should expect those to come out? And then I think you also talked about and mentioned in passing promotions to kind of boost annual subscriptions versus monthly.

Could you maybe give a sense of what kind of promotions you would be running to do that? Thank you.

All right. So there was a bunch of questions and maybe we'll -- sorry -- maybe we'll start with the first one, which is the vertical. So I just want to say that currently, we have the -- we don't have the restaurants yet, out, right, it's going to come hopefully in the -- in the next quarter.

So what we do see is that when we release the products, we're looking at the hotel segment, for example, which is not a huge percent of our users, but what happened, when we reach this product, the conversion jumped very quickly on that -- on that segment.

And you can see that the utilization of the application -- of the application that is built to manage hotels, even that's currently, you know, it's the first generation, we have a lot of more in plan, it's already driving our guiding growth in those segments.

So the uptick from the percentage of users is -- that's of the relevant segment is very, very high and I hope we can replicate something similar to that in additional segments that we are doing now. So, of course, the restaurant is coming -- is coming next.

We have something, yes. I mean, the ShoutOut which we don't quantify necessarily is a vertical application because it's more of e-mail list that -and a way to to communicate with your users.

Is something that we also say that -- and maybe further down the road we'll actually disclose in more exact number -- we're seeing, again, surprisingly positive adoption. And so I think that's answering your first part of the question.

And for the next part about promotion, I think Nir can -- please.

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

Okay. Thank you, Avishai. Thank you, Nir.

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

Thanks. A couple of questions. Maybe to follow-up on the last one, maybe more specific on some of the product updates or launch dates that you had talked about, Wix Stores, Wix Jet, how that is progressing, and then a follow-up on or maybe expand -- can you talk a little bit about mobile?

You've got the -- kind of the Native app relaunch coming and then can you talk a little bit about, you know, 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?

Sorry for all the questions.

So okay. So I'm not sure. Okay. So Joe was very quick here to write it, so I'll see if I can follow along with it.

But all right. So Wix Stores has already been released as we speak. We actually have, what we call, a gradual release to that and it's around -- currently it's about 50% of users are enjoying the functionality.

So we're very proud. We're getting -- actually, fantastic feedback from that product. So it's super exciting.

Wix Jet. So again, I think that it's 100% now and, again, we're getting really super positive feedback about it and we're really happy about, all the improvements in performance and thinking it's always something that we care a lot about and we can see the results are dramatic.

And I think the last -- the next part you were asking about mobile. So mobile, we divided two things, Native App and the mobile websites, and the mobile website builder where it's currently at 6.2 million mobile sites published to-date, which is a 300% year-over-year growth, which we think is amazing.

It's still by far, I think, the largest mobile platform builder in the world and we are very proud of it. And we got Appixia. So Appixia, which is the Native Commerce application on mobile, it's still not launched. It was waiting for -- we need to -- the e-Commerce, the new Wix Stores product at 100% before we can launch it.

We're probably going to go out a month or two after Wix Stores goes for 100% because the users at the Wix Stores API to implement the application. So I think that was all the questions or did I miss one?

How many apps in the app stores these days?

250.

Thank you.

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

Thanks. Just wanted to dig a bit deeper into the marketing. So when you guys are trying to figure out the -- you know, the positive impact and how successful something like TV campaign, 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, you know, 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 or something so we can kind of understanding trending. And the last thing, maybe think about updating as we move through the year to try to see the impact of the campaigns you've done?

And then also, I think there were some headlines. RKG scored you guys very high, you know, for effectively leveraging that Super Bowl campaign into other digital channels, social, email, et cetera. So maybe talk about that.

And then just lastly, any comment about the Google domain's initiative? You're one of the partners. How aggressive do you see Google promoting that initiative and are you assuming any impact of -- on subs from Google domains this year? Thanks.

Hey, this is Nir. 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, this is due to Google's side in which they are still -- they're still testing around whether they want to drive a lot of traffic there or not.

We are 100%, you know, dependent on their pace there and, you know, in our models, we don't model the Google domains are the key driver and, you know, if it turns 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 what Avishai said before. Indeed, and if you've seen that report, we kind of took the ad itself 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, you know, video teasers that went up on Facebook and Twitter and You Tube to contests that we ran through the NFL Players social outlets, through a lot of coverage we got in a lot of traditional media.

And that's also why we are so very happy with it because we think that that's a great way to create an impact not through a one-time big hit ad, but something that lasts over almost a whole month of a campaign.

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

So we are still -- you know, this is something we are still working kind of in terms of learning really and you can probably comment more about that in the future. I do think that up to this time of the initial side it shows that we gained over $6 million of media benefit estimated obviously because these things cannot be 100% accurate.

It will take a small time to fully understand the impact we both -- you know internally on core, TROI and such and also on -- in terms of brand awareness which we're currently conducting.

And Lior, do you want to take the first part about digital...?

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

Okay. Thank you.

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

Thank you. Good morning. Good evening, everybody. 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 is 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 the cost of acquiring a North American customer versus an international or somebody else out of North America?

I think that when we think about costs of acquiring customers, so we don't try to -- we pretty much follow the same rules everywhere, which is how much we spend on the acquisition and how long until the user spends money at Wix in order to return the cost of that marketing acquisition. OK?

So, of course, in some countries people tend to buy more expensive packages, some countries people tend to buy less expensive packages. Some countries, people like in the United States or the 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 the dollars, acquisition cost dollars that we got back from the user and the time that it took to return them.

And, in fact, I think 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 to eight months.

OK. Great. Great. 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 it too early to tell yet?

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's a pretty good chance. We're really happy about it. I think that that was a -- again, to say, if we can go back in time and choose again, I would definitely go and to do it again.

Okay. Great. Great. And then your conversion rate continues to tick up. As you went throughout the year, was there any particular, you know, lower churn, new geos, you know, the vertical apps?

Was there anything that jumped out at you guys as helping out the conversion rate this year particularly as we trended into the second half?

Hey, Tim, it's Nir. And so in terms of conversion rates, as well as, including share and just, you know, go back -- both go back to that active subscription graph that we had on our slideshow on our I.R. site, it's a -- 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 share.

And it's mainly about two key things, one of them is an ongoing effort to help people finish their websites, whether it's by adding functionality that they're missing. So Avishai gave a great example with -- you know, with the hotels for a hotel owner and I think that, you know, having the Shoutout is a way to communicate with your -- with your customers is also something which obviously contributes to your ability to do and manage your business through the site the way you want it.

So a lot of it -- a lot of it is to, as I said, just adding the capabilities to finish and have the site that you wanted. The other part of that is making the user interface easier, so it'd actually be easier to navigate through the editor and get things done.

So, you know, 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. -- the U.S., North America, maybe Israel, it's much harder to create a subscription through with an international credit card because most people don't have it.

And over time, we've learned how to do that and we keep on improving the billing solutions through our proprietary billing system in order to give better support to other parts of the world.

We've done a great -- tremendous improvement in Brazil a few years back. Through this year, we have improved that 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 the better channel.

Okay. Great. Thank you very much. Helpful.

Thank you. And our final question comes from Aaron Kessler of Raymond James. Your line is open.

Great. Thanks for the question. Now, first on the -- I noticed on the site today there's about a -- there's 50% promotions. How long should we think about these lasting? I guess when did 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 impacted the growth or the revenue estimates on the current side? Thank you.

OK. So I will start with the FX impact on the 2015 guidance. So what we've provided is the impact of -- on the top line in terms of collection and we said that it will be approximately $10 million meaning how did we calculate the 2015 collection based on the average of 2014 currency. That would be the result.

In terms of the revenue, well, it would 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.

Aaron, this is Nir. In reference to the promotion, I think, as I said before, there's no kind of a hard coded schedule. The current promotion you've seen is a Valentines promotion that aim is kind of -- kind of we expected there might be slightly lower traffic through the weekend and this also President's Day on the other end of it.

Usually, these things last for, you know, a few days and not more than that.

Great. Thank you.

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