Joe Pollaro - IR Avishai Abrahami - Co-Founder and CEO Nir Zohar - President and COO Lior Shemesh - CFO

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

Good morning. I’d like to welcome everyone to today’s call to discuss Wix’s second quarter 2014 financial results.

Joining us from management are Avishai Abrahami, Co-Founder and CEO; Nir Zohar, President and COO; and Lior Shemesh, CFO. After management’s prepared remarks, we’ll open the call up to questions.

Before we begin, I would like to remind everyone that during the course of this conference call management may make forward looking statements, which are subject to various risks and uncertainties that could cause 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, filed with the Securities and Exchange Commission on March 20, 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. I would like to remind you that during the course of this conference call we will discuss some non-GAAP measures in talking about the company’s performance.

Reconciliations to the most comparable GAAP financial measures are provided in the tables in our press release. Unless noted otherwise, all comparisons are versus the prior year period.

This conference call is also being broadcast on the Internet and is available through the Investor Relations section of Wix’s website. Additionally, we have posted to our investor relations site a supplemental data sheet containing additional financial information for comparison purposes to prior periods along with a slide presentation reviewing second quarter results.

So with these formalities out of the way, I’d now like to turn the call over to our Co-Founder and CEO, Avishai Abrahami.

Thanks Joe, and thanks to everybody for joining us. We’ve a lot to talk about today as we delivered strong results for the period that exceeded our prior outlook.

We also announced several new products and partnerships and crossed some significant milestone as a company, which is particularly exciting. I’m joined by Nir and Lior to provide more detail as well.

So let’s get started. The momentum in our business continued as we grow all of our key metrics.

Collections in Q2 grew 79% year-over-year to $39.9 million. Revenues in Q2 grew 82% year-over-year to $33.9 million.

I’m also excited to say that during the second quarter we crossed 50 million registered users and 1 million premium subscriptions, ending the quarter with 1.02 million premium subscriptions. Achieving these milestones is extremely gratifying for all of us at Wix.

It reflects the intense focus we have on our product development and our mission to bring simple and affordable web development to tens of millions of people worldwide. We celebrate these milestones and the hard work behind their achievement, and we are now laser focused on bringing our platform to the next 50 million users and beyond.

Moving into some product highlights. Wix Mobile is now being used to build over 3.5 million mobile sites to date as these products continue to grow in popularity with our users.

We continue to see great utilization of WixHive by our users. We have [inaudible] and 20 million contact connectivities, we also have several apps being developed today that are being connected to the WixHive API.

Our App Market continued to experience tremendous growth with nearly [210] [ph] applications and over 35,000 installations per day. One of our newest apps allows users to integrate the Etsy store into their Wix website without any [coding or] [ph] configuration.

We developed this app using the [SAPI] [ph] because many of our users were managing separate stores. They managed their Wix e-commerce store which they – their own branding and vision and then [store] [ph] good for the Etsy marketplace.

With this app, they can now sell items both the Wix website - additionally the apps allow our users to brand both stores consistently. And it gives the users customers on their site rather than directing those customers to Etsy to make the purchase.

We also formed a partnership with Wave to offer its app in our market. Wave’s apps help businesses manage all aspects of financial and accounting, in which there is payments received, expense management and more.

User can now connect with their Wix website and manage all of their finance and business in the Wix Cloud. These apps are a good example of how we continue to develop the Wix platform beyond website creation and into [inaudible] where users can manage and go to do business online.

So turning now to some new product launches. Last month we introduced WixShoutOut, a powerful tool that allows businesses to easily create and distribute great looking newsletters, updates or promotion.

WixShoutOut is accessible to all of our users globally through their Wix dashboard and can be used with literally just a few clicks and require no coding at all. The ShoutOut looks and works fantastically well on desktop, mobile and can be sent via email and social networks, including Facebook and Twitter.

This is the first product we have launched that utilizes the WixHive API. WixHive contacts collected and managed on the Wix website are now accessible by all products like WixShoutOut.

This product enables small businesses on it to manage their website and customer communication from a single environment something that has been out of reach or too expensive for them until now. We have seen a lot of used cases for WixShoutOut including sales invitations, open houses, album releases and promotions over new Wix website.

Since the launch of WixShoutOut less than 30 days ago, over 60,000 ShouOut has been sent to millions of recipients around the globe. We are offering ShoutOut for free today as we complete our beta testing after which we intend to add it to our stable of premium products.

On our IR website, we have included the link to introduce WixShoutOut in a video that explains more about how WixShoutOut works. As we have said, our vision is to extend the Wix’s platform into solutions that allow our users not just to create their online presence but also to manage and grow their business organization [from] [ph] Wix cloud.

We are really excited about WixShoutOut and its evolution into a powerful product for any type of small business. One of the biggest advantages of Wix is that we have more than 50 million users across a very diverse set of vertical markets, but we also work with large groups of businesses in the same industry which create a lot of new opportunities for innovating technologies, for that reason our strategy includes the development of new technologies and solutions that address specific vertical needs for building and managing a growing business online.

And today we are announcing a first radical solution WixHotels. WixHotels is a tailored solution that brings simplicity to every aspect of operating online for a hotel owner.

We make it super easy for a hotel owner to build a full integrated reservation and booking engine into their Wix site, including [inaudible] room availability, details and pricing, inventory management and taking payments. All of this done, [inaudible] and in the Wix cloud making it simple to use, fully adapted for mobile and affordable.

WixHotel is also connected to our WixHive API, so hotel owner can now manage their customers list on our platform and leverage data for marketing campaigns, updates and promotion. Currently [inaudible] launch WixHotels is available for the Wix App market with several users already taking advantage of this great offering.

Wix’s vision is to make the web a place where everybody can create and contribute. We now have the capabilities to [inaudible] and develop more tailored products for small businesses across many vertical markets, to simplify creating managing and growing a business online.

I now hand it over to Nir who will provide some additional details on our performance this quarter. Nir.

Thank you Avishai, and thank you everyone for joining the call. Let me walk you through our user subscription growth this quarter as well as the recent announcement and the update of partnerships and payments.

Beginning with our user subscription growth, we added over 110,000 net premium subscriptions in the quarter, which is a tremendous accomplishment that exceeded our expectations. On slide 11, in the presentation we posted on our IR site, we show the live active subscription at the end of each quarter from our last five Q1 user cohorts.

We continue to see very consistent performance of our user cohort that we have observed historically. In particular, you can see that the conversion of users to premium subscriptions in the Q1 2014 cohort continues to be strong through this most recent quarter.

Additionally, our Q1, 2013 cohort has performed better through five quarters than our previous Q1 quarter cohort. We achieved this improved retention with several product enhancements and launches over the last year, including adding more apps to our App Market, launching our mobile 2.0 product and adding dozens of new design features and functionalities to our Editor.

These product enhancements increase the functionality of our user [sites] [ph] and improve the user experience, both of which drive conversion and retention. We recently announced that Wix has partnered with Google on the Open Beta Launch of its new domain registration service, Google Domain.

Through this new partnership we could compliment the Google Domain service with our web development platform. Our integration makes connecting a domain to a new Wix website seamless.

Upon purchasing a domain from Google and choosing Wix to build their site, users will be redirected to and registered with wix.com where they can begin using our Editor and easily connect the newly purchased domain. This partnership builds on our own ongoing relationship with Google in providing small business owners with a way to create and manage their online presence to a user friendly and affordable solution.

We believe Google Domain could be a meaningful and attractive acquisition channel for us and are excited about continuing our strong relationship with Google. To further drive conversion or retention, we continue to improve our payment capabilities for our users outside of the U.S.

Our proprietary billing system enables users in foreign countries to purchase Wix subscription packages using local payment methods they recognize, trust and can easily access. As there is not a single solution that provides full coverage for businesses that accepts recurring payments in most markets, our system allows us to integrate with any local payment gateway and [inaudible] greatly increasing our ability to accept payments.

Since we launched our solution in Brazil, we have seen 70% increase in the processing success for subscription package purchases. Also, in Brazil in order for Google to sell their apps in local currency and with local credit card, when users make a purchase, they are redirected to Wix as a reseller.

As a Google Apps reseller, we provide Google users with a smooth payment process through our platform, supporting local currency and local credit card. This partnership gives us more exposure to potential users in Brazil who are looking to create and manage their digital presence.

Before I hand it over to Lior, I want to share with you a great story about the used case of Wix that illustrates the power of our platform. Through an online education blog we recently learned that Wix is being used by several teachers across the U.S.

as an educational tool. Teachers use Wix to not only expose the students to an easy way to build web content, but also to assign projects.

We actually learned of a third grade teacher who took a student on a field trip to local historical sites and then tasked the students with choosing Wix to create visual story books showing what they learned. We were really happy to learn about it and it really enforces our belief that the web can and should be accessible to anyone and that the used cases are endless.

With that, I like to turn the call over to Lior to review the financials in more detail. Lior.

Thanks Nir and thanks everyone for joining today. Q2 was another outstanding quarter for us.

We continue to experience significant growth and we will once again be increasing guidance on collections and revenues as well as new adjusted EBITDA. Let me walk you through our key metrics on the quarter, review our second quarter financial results and wrap up with our outlook.

First our KPIs. Registered users as of the end of the second quarter totaled 50.3 million, a sequential increase of over 4 million for the second consecutive quarter.

We ended the second quarter with approximately 1,019,000 premium subscriptions adding over 110,000 on a net basis during this period. This is a sequential increase of 12% and was driven by continued strong conversion we are seeing not only in users that joined during the second quarter, but also from prior user cohort.

Q2 collections were $39.9 million; a 79% increase over the prior year period. Growth here was driven by increase in premium subscription during the quarter.

We also continue to see users choose annual packages at higher rates than monthly packages. Having reviewed our KPIs, I’ll now turn to our second quarter financial results.

Please note that all of these figures are non-GAAP and exclude stock-based compensation expenses and one-time items, unless I note otherwise. Revenue in the second quarter was $33.9 million, an increase of 82% over the prior period.

The growth in revenue was driven by the increase in premium subscription and collections as well as increase in ARPU by slightly more than $1. Gross margin in the second quarter was 82%, which is consistent with recent quarters.

R&D expenses in the second quarter were $12.2 million or 36% of revenues that is $5.7 million or 31% of revenue in the previous period. The increase fee was driven by our continued headcount increase in particular the hiring of developers and engineers to support product development.

We added 48 R&D employees in the second quarter bringing our total headcount in this group to 375, still more than 50% of our employee total. Marketing expenses were $23.1 million in the second quarter compared to $12 million in the prior period.

As a percent of collection, marketing remains at 58% consistent with Q1 and our target for the year. The increase in marketing was driven mainly by our TV and radio advertising as well as branding campaigns.

G&A expenses in the second quarter were $2.7 million or 8% of revenue compared to $1.4 million or 7% of revenue in the prior period. Before I discuss profitability for the quarter, I’d like to walk you through a change in our calculation of adjusted EBITDA that we are implementing.

Over the last two quarters deferred revenue has grown significantly, primarily driven by an increased percent of annual subscription packages [inaudible] [compared] [ph] to monthly packages. As a result beginning this quarter, we will include the change in deferred revenue and prepaid domain registration cost in our calculation of adjusted EBITDA.

This change provides two benefits. First, the calculation more accurately reflects the cash flow and financial performance of our business as it aligns our cash collection with operating expenses each quarter.

As the difference between collections and revenues increases, the prior calculation of EBITDA does not reflect the cash profitability of our business as it is based on revenue we are only able to recognize for accounting purposes. Second, this calculation will provide our investors with metric that our management team uses to evaluate and model our business.

So, we would like to provide a metric that is indicative of the performance of our business as we see it. For all historical periods and for the remainder of 2014, we will continue to disclose adjusted EBITDA calculated under the prior definition, which for ease of reference we will refer to as prior adjusted EBITDA.

We will refer to the new calculation method as New adjusted EBITDA. Beginning in the first quarter of 2015, we will only disclose new adjusted EBITDA and you can see both calculation of EBITDA on the supplemental data sheet that is available on our IR sites.

With that said, our second prior adjusted EBITDA was a negative $9.5 million. We exceeded our guidance on prior adjusted EBITDA due to our [inaudible] performance and slightly lower operating expenses than planned in the quarter.

New adjusted EBITDA which adds back the deferred revenue and the prepaid domain registration cost in the period was negative $4.1 million in the second quarter. This compares favorably to our outlook for the second quarter which was $5 million to $6 million had we provided guidance using the new adjusted EBITDA calculation.

Second quarter net loss was $10.4 million translating to a non-GAAP loss per share of $0.27 based on share count of $37.7 million. Please note that we are not changing the calculation of non-GAAP net income and EPS.

CapEx in the quarter was $1.5 million and free cash flow was roughly negative $3.2 million. We continue to maintain plenty of liquidity ending the quarter with just over $97 million in cash on our balance sheet and no debt.

Our employee count at the end of the quarter was 736. Turning to our outlook for the third quarter of 2014 and an update to our full year guidance.

For the third quarter, we expect collections to be in a range of $42 million to $43 million and revenue in the range of $35 million to $36 million. Prior adjusted EBITDA for the third quarter is expected to be negative $11 million to $12 million.

New adjusted EBITDA is expected to be negative $4 million to $5 million. We are also increasing our outlook for the full year.

We now expect collection for 2014 of $163 million to $166 million and revenue in the range of $136 million to $138 million. We are maintaining our prior adjusted EBITDA guidance of negative $38 million to $42 million.

We expect new adjusted EBITDA to be negative $14 million to $16 million, this is an improvement to the range of new adjusted EBITDA guidance of negative $15 million to $17 million that would have been issued last quarter had we calculated adjusted EBITDA this way. I also note that this is a significant improvement from our initial full year guidance of negative $22 million to $24 million that we would have issued at the beginning of the year had we calculated adjusted EBITDA this way.

And with that, we will now take your questions.

Yes hi, thank you guys. One thing I want to ask is if you look at slide 11 on your presentation you have used this slide before that shows a cohort analysis of how fast you guys changed users into subscribers and [you titled] [ph] this consistent behavior but it’s seems pretty clear that [inaudible] is getting much much steeper and people are going from users to paying subscribers much faster particularly the Q1 2014 cohorts.

First, what is driving the change and why are people more likely to pay you now than they were in the past?

We believe that the number one reason for this increase in conversions and conversion over time is our product improvements. By providing more value to users we can see good results and that they actually managed to complete the website they dream of and then find better ways to manage a business and as such they convert faster or actually convert better not necessarily faster.

Great. And – oh sorry.

Nat, it’s Nir. I just wanted to add to that, I think that over time obviously it’s the things that Avishai mentioned, it’s also the fact that we are adding both translation and [improving] [ph] languages so our approach to new geographies is getting better.

So the same traffic from those geographies which in the past was converting in a lower ratio is actually at a higher ratio now which also goes to improved payment option in those different geographies.

Okay, and Nir to follow up on that and then I have one other question. It’s a follow up on that, are you seeing a – if I looked at that conversion ratio changing, would it be much more dramatic outside of the U.S.

and some of your larger and more developed markets or are you also seeing that conversion metric improve in the U.S. as well?

So I think you’ll see – you will see different ratios in different places, and definitely in places such as Brazil and Russia where we’re making a lot of progress in terms of the organization efforts you will see a steeper climb, but you will also see an improvement also in the U.S. and Canada, in our kind of the more veteran markets.

Okay. And then a separate question, I just wanted to know about how you are doing pricing to WixHotels?

WixHotels. No, we not – well we are still testing that, so we are not yet have a concrete plan that we will share it this time.

So we still have a couple of ideas and we are testing them with customers.

Okay. Great thank you.

Thanks, Nat.

Yeah thanks, hi guys.

Hey Sterling.

So you brought up the partnership with Google. I’d like to kind of roll that into and just ask one, have you seen or can you give us any comments on what type of traffic, referral traffic you’ve already gotten and understading it’s a limited data, but then broaden that discussion out to your partnership with Yandex and how many other partnerships in this kind of registrar type of opportunity do you actually see going forward?

Hey, Sterling, it’s Nir. As for the Google beta it is still on the minimal levels of traffic.

So, there is nothing significant coming out at this stage. Obviously, now the levels of traffic and success there will be dependent on Google’s ability to bring there a lot of traffic and generate sales of domain.

We are big believers in Google and we have a stronger belief and hope that this is going to an interesting go-to-market channel for us. In terms of the comparison with other registrars, that’s definitely something that we think is a very interesting potential.

The other deal which is similarly – it’s actually not with Yandex, it’s with REG.RU. It’s kind of in the same family; it’s obviously not exactly – because they’re not exactly the same.

We are starting to see some tractions there, but there is still other product improvement to be done in order to really assess whether this can be a significant channel or not.

Okay. And then, can you give us a sense, I don’t think in your prepared remarks there was any real kind of commentary around the App Store other then the new Etsy and some of the new items, but can you give us some additional color on where you’re seeing the biggest traction in the app store?

Absolutely, so first of all, in terms of a -- we’re starting to see more and more utilization of products that are aimed to let you market your business and then to manage your business. So, we’re seeing more of those being in terms of percentage.

We’re still seeing a lot of normal installation continue to grow of application within your website. We currently have 51,000 visitors daily to the App Market and about 3 million applications installed in the last quarter.

So, we’re seeing some [inaudible] growth. We’re seeing that everything on that is improving.

Of course, things like ShoutOut [inaudible] and we can see a massive adoption on the first day. So, we’re seeing -- that it continues to improve and of course, also things like the Google account, the gmail and Google App are growing, but they are more in the same kind of percentage as they used to be before that.

And the last thing I want to mention is that, we do have six applications now live with the WixHive API. And we’re going to have probably at the end of the quarter about 20 to 25 applications using Hive.

Okay. And last question, Lior, under the new definition of adjusted EBITDA to give us a better sense of kind of how it’s tracking relative to cash flow etcetera, is there a sense -- could that metric turn actually positive, so you’re at above breakeven in 2015?

So, Sterling, we will get to that when we announce the Q4 results in February 2015, so we’ll definitely touch this point and elaborate about it.

Okay. Thank you.

Thanks.

Two questions, I want to follow-up on Nat’s question earlier about what’s been driving conversion rates, I know you’ve talked about product improvements. Could you talk about qualitatively where you think you are in terms of your ability to continue to improve the products?

And I know that’s kind of an open-ended question, but do you think that, have you been making major changes in the last year or so that have caused those improvement in conversion rates? And does the product pipeline, the product improvement pipeline look pretty robust to use such that you can continue to see that level of improvement in the product and that level of improvement in the conversion rates?

And then secondly, does the kind of reclassification of re-definition of EBITDA, does that change at all your long-term margin goals? Thanks you.

Maybe I’ll take it the first one, and Lior will take the second one. This is Avishai.

So I think that we did a lot of things during the last year in order to improve the product conversion. Most of them were small changes, but a lot of them were just [inaudible] value, for example, adding a lot of more templates, adding lot of more languages, adding lot of more applications.

We’ve created a fantastic mobile product which was one of the bigger changes that we did. We did marketing app store.

So we’re doing a lot of different things that continue to improve that. In the next six months, hopefully even at the end of the next quarter, you are going to see some really incredible new products -- new improvements to the current product that we expect to drive conversions dramatically up.

And so we are super excited about, I don’t want to commit, because currently the deadline is around December and [indiscernible] it might be in the quarter after that or but we have some fantastic new innovation that are really changing a lot of the barriers that we have today and making -- we expect them to make dramatic effect on conversion.

So, this is Lior. With regard to the new way that we calculate the adjusted EBITDA, I think that it’s important to point out, you know, first of all that this new way of calculating adjusted EBITDA which by the way it’s not such a new way I think that many other companies are using that.

But I think that it illustrates the best way how we look at the business. And it illustrates the significant improvements in term of profitability since we actually started the year and provided the first guidance for 2014.

And to your question about the [inaudible], in the end of the day adjusted EBITDA under both definitions should lead to the same result. I think that the main change is about the timing.

The new definition of adjusted EBITDA basically takes into account the collection, which is the best measurement of how to look into our business. While the old one look at revenue, which is just for accounting purposes.

Certainly there will be difference in term of the timing to reach to the target model looking at both definitions.

Thank you, Lior and thank you, Avishai.

Thanks, two questions. Can you go into just a bit more detail about the partnership with Google and kind of what you might expect to see with that over time?

Just it seems like, you’ve got more and more businesses focused on the local SMB space and you’re sitting in a very good spot? And then secondly, can you give us a bit more color just international growth versus U.S.

growth in the quarter? And then one last one, we obviously saw a nice improvement in operating leverage in the sales and marketing side.

Can you talk about kind of what’s driving that implied efficiency on the CPA? Thanks.

This is Avishai. I’m going to try and answer your first question.

So, the thing about our expectation from the partnership with Google is that -- just to be honest, Google never did anything in this area before. This is a really great product that we like and that we are strong believers in the power of Google and that they’ll be able to execute and enter to this new realm and by doing that bring a lot of traffic to their site to allow them to – people to buy domains and then that we’re going to get large piece of that traffic back into Wix and convert that into premium users.

Most of it because the guy that -- our part of that went for Google brought domain which is a big part of why people go to premium on Wix, because they want to connect the domain that they just purchased on Google. So we are strong believers in Google –Google has a very big chance to do fantastically well there.

But it’s still not released. We haven’t seen them launch that and we haven’t seen them drive traffic there.

So we still need to -- still improve and take the product and see how well it performs in the market. Beyond that, I think Nir want to answer the question about international.

Absolutely, yes. So Jason, in terms of international growth we see the ongoing trend in which the U.S.

is decreasing percentage of total revenue in collection. It’s actually for the first time ever I think slightly less than 50%.

While it still grows in the same -- at the same rates that we recorded in the past. Clearly that’s a great indication of the fact that we keep on growing internationally in geographies such as Brazil and the rest of Latin America and Russia, in Europe, and we have many plans to keep on that global expansion for the second half of 2014 and going into 2015.

So, I will take the third question. This is Lior.

So first, there is no significant change in term of the marketing efficiency from the second quarter to the third quarter. But I think that you know it makes sense first to notice that since we started with the public media campaigns mainly TV, we’ve learned a lot.

We’ve learnt how to do it more efficient, and how to do it better. And this is what we’ve done.

We started and we launched TV in France. We did lot of testing in Russia and Brazil and obviously we’ve learned in the last few quarters and obviously improved everything.

We’re seeing that the time as passes, we think that the marketing and the way that we do marketing will be more efficient in the future and you know this is part of our model.

Thank you. Two questions, one, you launched WixHotels as a vertical.

I was curious maybe why choosing that vertical first and other verticals that you’re contemplating launching over the near term. And then, if you could give us an update on the Appixia integration and potential re-launching of that product?

Could you -- just to get that answered, what is WixHotels and why we developed that first, right.

Yes.

And so, well the [concept] [ph] on WixHotels is that, we always see that a lot of a -- we have lot of small hotels, bed and breakfast and other guests services of that nature as customers of Wix. We think that this is a big segment and it is a segment that struggles a lot.

Because currently they either have very expensive solution that are fit to manage medium or large hotels and that are very complex to work and that they require a lot of money and time to install, or they have to most of the work manually. We couldn’t find -- there is nothing that we could partner with it we found that will provide us functionality that they need and as such that we recognize that there is a lot of pain and we have a lot of potential customers who have decided to develop our own product.

And we believe that it is part of our ongoing strategy of allowing our customers to manage their business in the best way possible online. And by adding the product like that, we are actually taking them and we’re continue to improve them and give them the same functionality that the large chain has, even while they are small business.

I just want to emphasize that one of the core thing about this product is that it allows them to maintain their independency. And we are not priced on bookings [inaudible] one of those companies that try to make sure that we control the marketing and their management or anything.

We’re just adding a big part of functionality to what they can do and then we’re going to allow them to choose any marketing agent in market that exists. So we are an enabler for better management allowing them to connect fantastic marketing services again [inaudible] bookings [inaudible].

And so this is the strategy behind it. And this is [efforts of many] [ph] that we intent to do by providing great solutions for the customers to better manage their business.

And regarding Appixia, as we said before, we’re working on the product. We still do not have the date for the product launch.

And we’ve released a bunch of beta versions to our customers to exactly tune their needs that they have. So we currently are thinking about 10 stores running on that technology and once we continue to get a feedback we will actually have a product to release.

I have to say that we are very optimistic. We actually saw that the product itself, the combination of a great website and a great mobile native application did a dramatic effect for our customer business, and as such we look at it as a important milestone if we want to achieve.

But it’s still in the lab. It’s not something that we had a final at this point.

Hey, guys. Maybe just a couple of follow-ups.

You’ve given us the cohort information, but can you give us a sense of if you can -- in the filings you talk about the percentage of premium subscribers that actually came from users that signed up during the quarter? Can you give us a sense of what that looked like during this quarter?

Yes. This is Nir.

Basically it’s about 40% came from the current quarter and 60% came from previous ones.

Okay. And then, there is the discussion earlier about the continued shift to annual subscriptions programs away from monthly.

Can you give us sense of at this point where we are in terms of the mix of the annual versus monthly?

Sure. So right now in terms of the accumulated number of yearly, we are 67%, and obviously this is something that keep increasing.

Second quarter, we were roughly at 55% in term of yearly subscription. And it’s – Sterling, it’s important to note that we think that in the rest of the year, we think that this number might be increasing.

This is one of reasons why we decided to go and to change the way that we are calculating the adjusted EBITDA, because the collection is keep increasing more than the revenue and this is one of the reasons for that.

So, you’re saying that 67%, so cumulative out of all the premium subscriptions 67% are yearly, but specifically to the quarter only 55%?

Correct.

Okay. And how did that look last quarter, so in other word just for -- you’re talking about increasing through the year just maybe talk us through the seasonality.

Is there seasonality in terms of when people are more likely to choose yearly, so in another word just 4Q a really big percentage in terms of those that chose yearly?

I don’t think that there is much of a seasonality. Usually during the fourth quarter when we do some campaigns because of the holidays, the yearly increases.

Usually in the last few quarter it was slightly above 50% for the yearly. And as I mentioned before we see these number on the yearly and not necessarily quarter-over-quarter, but we see this number increasing.

And we think that it will continue to increase in the short term. Meaning that we will see more and more yearly packages and we’ll see that more and more premium subscriptions choosing yearly rather than monthly.

And overall obviously for us it’s very good, because it means that we manage to collect the maximum amount of money [day one] [ph] and obviously invest some of it back. But at the end of the day this is the purpose, which also increases the visibility and our predictability of our model.

And as also maybe other way, obviously think about it. So 67% is the cumulative, I would imagine your monthly package users are more likely to churn off look like wedding designers etcetera leaving you more likely having a [skew] [ph] in the existing base to be more yearly.

Exactly, this is why on a cumulative basis you’ll see a higher percentage.

Also the monthly is actually after a while mature into yearly, because they feel confident with the product. They want to get the discount for it and move to an annual subscription.

Got it. All right .thanks guys.

Thank you.