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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 |
FORM 20-F
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2025
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 001-36158
WIX.COM LTD.
(Exact name of Registrant as Specified in Its Charter)
Israel
(Jurisdiction of Incorporation or Organization)
5 Yunitsman St.
Tel Aviv, 6936025 Israel
(Address of Principal Executive Offices)
Naama Kaenan, Adv.
General Counsel
Telephone: +972 (3) 545-4900
E-mail: naamak@wix.com
Wix.com Ltd.
5 Yunitsman St.
Tel Aviv, 6936025 Israel
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol |
Name of each exchange on which registered |
Ordinary shares, par value NIS 0.01 per share |
WIX |
The Nasdaq Stock Market LLC |
Securities registered or to be registered pursuant to Section 12(g) of the Act: None.
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None.
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: As of December 31, 2025, the registrant had outstanding 54,989,523 ordinary shares, par value NIS 0.01 per share.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☒ |
Accelerated filer ☐ |
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Non-accelerated filer ☐ |
Emerging growth company ☐ |
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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
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U.S. GAAP ☒ |
International Financial Reporting Standards as issued
by the International Accounting Standards Board ☐ |
Other ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
INTRODUCTION
In this annual report, the terms “Wix,” “we,” “us,” “our” and the “company” refer to Wix.com Ltd. and its subsidiaries.
This annual report may include statistical, market and industry data and forecasts that we obtained from publicly available information and independent industry publications and reports that we believe to be reliable sources. These publicly available industry publications and reports generally state that they obtain their information from sources that they believe to be reliable, but they do not guarantee the accuracy or completeness of the information. Although we believe that these sources are reliable, we have not independently verified the information contained in such publications. Certain estimates and forecasts involve uncertainties and risks and are subject to change based on various factors, including those discussed under the headings “Special Note Regarding Forward-Looking Statements” and Item 3.D. “Key Information—Risk Factors” in this annual report.
Throughout this annual report, we refer to various trademarks, service marks and trade names that we use in our business. The “Wix.com” design logo is the property of Wix.com Ltd. Wix® is our registered trademark in the United States. We have several other trademarks, service marks and pending applications relating to our solutions. Other trademarks and service marks appearing in this annual report are the property of their respective holders.
We define certain terms used in this annual report as follows:
• “Bookings” or “bookings” is a non-GAAP financial measure which includes cash receipts for creative subscriptions purchased by users as well as cash we collect from Business Solutions, as well as payments due to us under the terms of contractual agreements for which we may have not yet received payment. Bookings is calculated by adding the change in deferred revenues and the change in unbilled contractual obligations for a particular period to revenues for the same period.
• “business solutions” means additional products and services, other than creative subscriptions, that are offered to our users to help them manage and grow their business online, such as communication tools, payment services, and marketing products.
• “Business Solutions Revenue” and “Business Solutions Bookings” refer to all revenue or bookings, as applicable, generated from business solutions and exclude any revenue or bookings, as applicable, included under Creative Subscriptions Revenue or Bookings, respectively.
• “Creative Subscriptions Revenue” and “Creative Subscriptions Bookings” refer to revenue or bookings, as applicable, generated from both Wix premium subscriptions, including premium subscriptions bundled with vertical solutions and domain name registrations, and other subscription based offerings, such as Base44, and exclude Business Solutions Revenue or Bookings, respectively. Our total revenue is comprised of Business Solutions Revenue and Creative Subscriptions Revenue. Our total bookings is comprised of Business Solutions Bookings and Creative Subscriptions Bookings.
• “Partners” or “partners” means agencies, independent design professionals, freelancers, web design, development professionals, and other third parties, who either act as resellers of our solutions to their customers or use our platform to provide website building and maintenance services to their customers, while further customizing our solutions to suit the needs of their customers. We identify these third parties using multiple criteria, including but not limited to, the number of sites built, participation in the Wix Partner Program and/or the Wix Marketplace or Wix products typically used by partners (incl. Wix Studio).
• “premium subscriptions” means our monthly, yearly and multi-year paid subscription plans for online solutions offered by Wix or Base44, purchased by a Registered User.
• “Users,” “users,” “Registered Users,” or “registered users” means all individuals or entities that have registered with Wix or Base44, as identified by a unique email address provided by such individual or entity and have begun the website or application building process.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
In addition to historical facts, this annual report contains forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, or the Securities Act, Section 21E of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We make forward-looking statements in this annual report that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “subject,” “potential,” or the negative of these terms or other similar expressions. The statements we make regarding the following matters are forward-looking by their nature:
•our ability to attract and retain registered users and partners, and generate new premium subscriptions and additional business solutions as we continuously adjust our marketing strategy and customer care;
•maintenance of our brand and reputation, and generation of revenue from sources other than premium subscriptions;
•risks associated with our AI Technologies (as defined below);
•risks associated with “vibe-coding” market and our Base44 offering;
•risks associated with international operations and the use of platform in various countries;
•risks related to the macroeconomic environment and ongoing global conflicts;
•security risks and payment risks and fluctuations in foreign currency exchange rates;
•failures of third-party hardware, software and infrastructure on which we rely, or failure to manage the operation of our infrastructure;
•adverse market conditions, including inflation, interest rates and other adverse developments that may adversely affect our cash balances and investment portfolio;
•our history of operating losses and inability to achieve sustained profitability;
•downturns or upturns in sales are not immediately reflected in full in our operating results;
•our ability to repurchase our ordinary shares and/or any convertible notes pursuant to our repurchase program or as required, including as a result of our “modified Dutch Auction” tender offer;
•our ability to comply with the terms the Credit Agreement (as defined below);
•our ability to raise capital when needed or on acceptable terms;
•risks related to acquisitions and investments, pricing decisions, pandemics, natural disasters and other catastrophic events;
•our ability to develop and introduce new products and services, such as Wix Harmony, as well as maintain existing and third-party products and services and ability to keep up with rapid changes in design and technology;
•our ability to attract and retain qualified employees and key personnel;
•our ability to attract a diversified customer base and increased competition;
•our ability to maintain compatibility of our platform and solutions with changes in third-party applications and changes to technologies used in our solutions;
•our ability to acquire and service small business users;
•risks related to cybersecurity incidents;
•our expectation regarding the uncertain future relationship between the United States and other countries with respect to trade policies, taxes, government regulations, and tariffs;
•our ability to comply with the regulations applicable to our operations, including new governmental regulations regarding the internet, consumer protection, artificial intelligence (“AI”), privacy and data protection laws and regulations, as well as contractual privacy and data protection obligations;
•risks relating to intellectual property, including infringements, litigation and claims, and our ability to maintain and protect our intellectual property rights and proprietary information;
•our expectations regarding the outcome of any regulatory investigation or litigation, including class actions;
•risks related to the development and integration of AI, generative AI, agentic AI, machine learning, and similar tools into our offerings, and comply with the regulatory environment impacting AI and AI-related activities;
•risks related to activities of registered users or content of their websites, and risks related to domain names and industry regulations;
•risks related to compliance with laws and regulations, including those related to economic sanctions, tariffs, export controls, anti-corruption and anti-money laundering, anti-trust, and consumer protection, and changes in these laws and regulations;
•risks related to tax, including application of indirect taxes, tax laws, changes in tax laws or changes in provision for income tax and examination of income tax returns;
•risks related to ordinary shares, activist shareholders, and our status as a foreign private issuer;
•future sales of our ordinary shares by directors, officers or large shareholders;
•risks related to our incorporation and location in Israel, including conflicts and hostilities in the area;
•our expectations regarding future changes in our cost of revenues and our operating expenses on an absolute basis and as a percentage of our revenues;
•our planned level of capital expenditures and our belief that our existing cash and cash from operations will be sufficient to fund our operations for at least the next 12 months and for the foreseeable future; and
•our ability to enter into new markets and attract new customer demographics, including our ability to successfully attract new partners and large enterprise-level users and to grow our activities, including through the adoption of our Wix Studio product, with these customer types as anticipated.
The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the risks provided under Item 3.D. “Risk Factors” in this annual report.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation, and expressly disclaim any duty to update publicly any forward-looking statements for any reason after the date of this annual report, to conform these statements to actual results or to changes in our expectations.
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
A. [Reserved]
B. Capitalization and Indebtedness
Not applicable.
C. Reasons for the Offer and Use of Proceeds
Not applicable.
D. Risk Factors
Our business faces significant risks. You should carefully consider all of the information set forth in this annual report and in our other filings with the United States Securities and Exchange Commission, or SEC, including the following risk factors that could materially and adversely affect our business, financial condition, operating results and growth. Our business, financial condition and results of operations could be materially and adversely affected by any of these risks. In that event, the trading price of our ordinary shares would likely decline and you might lose all or part of your investment. See “Special Note Regarding Forward-Looking Statements” starting on page 5.
Risk Factors Summary
The following is a summary of the principal risks that could materially and adversely affect our business, financial condition, operating results and growth prospects.
Risks Related to Our Business and Our Industry
• We may be unable to attract new registered users from which we can generate new premium subscriptions and additional business solutions, or attract partners that will sell our solutions to, or purchase our solutions on behalf of, their customers, or we may be unable to retain existing premium subscriptions, or increase the revenue we generate from each premium subscription.
• We may fail to maintain and enhance the strength of our brand.
• Our selling and marketing strategies and activities, and any adjustments we may make to our marketing strategy, may fail to generate new users or partners or fail to increase the revenue we generate from premium subscriptions to the levels we anticipate.
•We are subject to significant risks associated with our AI Technologies.
•We may fail to maintain a consistently high level of Customer Care.
• We may be unable to generate significant revenues from sources other than our premium subscriptions, such as from our business solutions.
• We may fail to evaluate our current business and future prospects for “vibe-coding,” in particular with respect to our Base44 offering.
• We are subject to risks associated with international operations and the use of our platform in various countries, including emerging markets.
•Our operations in and connected to Ukraine have been and may continue to be materially impacted on a long-term basis.
• We are exposed to risks, including security risks, associated with payment processing and the provision of financial services.
• We may be subject to adverse impacts of exchange rate fluctuations.
• We may be susceptible to failures of the third-party hardware, software and infrastructure on which we rely, including third-party data center hosting facilities.
• We may fail to manage our infrastructure effectively.
• Our cash balances and investment portfolio have been, and may continue to be, adversely affected by market conditions, including inflation, interest rates and other adverse developments affecting the financial services industry.
•We may fail to manage our headcount effectively.
• We may be unable to achieve sustained profitability within our expected timeframe.
• Trends in sales are not immediately reflected in full in our operating results because we recognize revenues from premium subscriptions over the term of an agreement.
• Our ability to pay cash upon conversion or repurchase of the 2030 Convertible Notes (as defined below) may be limited.
• The 2030 Convertible Notes may impact our financial results, result in the dilution of existing shareholders and create downward pressure on the price of our ordinary shares.
• Restrictions in the Credit Agreement could adversely affect our financial condition and impact our business needs and plans.
• We may be unable to raise capital when needed or on acceptable terms.
• Our recent and future acquisitions and investments could result in operating difficulties and other harmful consequences.
•Our pricing decisions, including the introduction of AI credits, may fail to generate expected results and may adversely affect our ability to attract new users and retain existing users.
•Our business is subject to the risks of pandemics, natural disasters, and other catastrophic events, whether due to climate change or otherwise.
Risks Related to Our Market and Competitive Landscape
•We may fail to develop and introduce new products and services, maintain or enhance existing products and services, or keep up with rapid changes in design and technology, including developments using AI.
•We may be unable to hire, integrate and retain highly skilled personnel.
•We may be unable to attract a more diverse customer base such as partners, mid-size, large and enterprise-level companies, design professionals and tech savvy users, for which we have developed more customized solutions, such as Wix Studio.
•We may face increased competition in a highly competitive market for our users and partners audiences, including due to new emerging AI Technologies.
•The demand for our solutions and platform could decline if we do not maintain the compatibility of our platform and solutions with changes and developments in third-party applications.
•Changes to technologies used in our solutions or new versions or upgrades of operating systems and Internet browsers may impact integration with our systems, and the process by which users interface with our platform.
•We may fail to effectively acquire and service small business users.
Risks Related to Privacy, Data and Cybersecurity
•We and our third-party providers are exposed to cybersecurity risks and incidents.
•We may fail to comply with data privacy and protection laws and regulations, as well as our contractual data privacy and security obligations to third parties and to our users and their users, and the use and adoption of our services may be limited due to growing awareness of data privacy and protection laws.
Risks Related to Our Intellectual Property
•We may be unable to obtain, maintain and protect our intellectual property rights, and may be subject to claims (i) by third parties of intellectual property infringement, including due to our use of AI, (ii) by our contractors or employees for remuneration or royalties for assigned service invention rights and (iii) challenging the use of open-source software and/or compliance with open-source license terms.
Risks Related to Other Legal, Regulatory and Tax Matters
•We may be affected by the enactment of new governmental regulations regarding the Internet.
•The development and integration of AI into our offerings may present various risks, including regulatory and legal risks, and result in reputational harm, liabilities or other adverse consequences to our operations.
•We may be liable, as a provider of online services, for the activities of our registered users or the content of their websites.
•We could face liability from disputes over registration and transfer of domain names.
•Trade and economic sanctions and export laws may restrict our business.
•The application of indirect taxes, other tax laws or regulations in the jurisdictions in which we conduct our business, could adversely affect our business and results of operations.
•Changes in tax laws could adversely affect our tax position and financial results.
•Changes in our provision for income taxes or adverse outcome resulting from examination of our income tax returns could adversely affect our results.
•We could be adversely affected by violations of anti-corruption, anti-bribery and anti-money laundering laws.
•Existing federal, state and foreign laws and regulations governing the sending of commercial emails and other consumer protection laws, could impact the use of our products, and potentially subject us and our users to regulatory enforcement or private litigation.
Risks Related to Our Ordinary Shares
•Our share price may be volatile and may fluctuate substantially, including due to (i) any failure to meet financial guidance or repurchase our ordinary shares and/or convertible notes pursuant to our repurchase program, (ii) sales of our ordinary shares by directors, officers or large shareholders, (iii) actions of activist shareholders, (iv) our ability to maintain our foreign private issuer status, (v) risks of being treated as a controlled foreign corporation or passive foreign investment company for U.S. federal income tax purposes, and (vi) provisions of Israeli law and our articles of association that may delay, prevent or make undesirable an acquisition of all or a significant portion of our shares or assets.
Risks Relating to Our Incorporation and Location in Israel
•Conditions in Israel could materially and adversely affect our business, including (i) the obligations of personnel to perform military service, (ii) differences in Israeli law compared to laws of other jurisdictions, (iii) the continued availability of local tax benefits, (iv) the effects of the conflict throughout the region, including war and hostilities between Israel and its neighboring countries and regions, and its potential escalation, and (v) difficulties enforcing a U.S. judgment against us or assert U.S. securities laws claims in Israel.
For a more complete discussion of the material risks facing our business, see below.
Risks Related to Our Business and Our Industry
Our results of operations and future revenue prospects will be harmed if we are unable to attract new registered users from which we can generate new premium subscriptions and additional business solutions or attract partners that will sell our solutions to, or purchase our solutions on behalf of, their customers, or if we are unable to retain existing premium subscriptions or increase the revenue we generate from each premium subscription.
We primarily generate revenue through the sale of premium subscriptions and additional business solutions. The growth of our premium subscriptions base is mainly impacted by our ability to attract new registered users to our platform and the rate at which they upgrade our free offering of web and application development, design and management solutions to premium subscriptions, as well as our ability to attract partners that will purchase our solutions for their use or sell our solutions to, or purchase our solutions on behalf of, their customers.
The growth of our premium subscriptions base is further impacted by our ability to retain and renew our existing subscriptions. The renewal rate of premium subscriptions also significantly impacts the overall number of premium subscriptions and, as a result, our revenues. One of the key drivers of renewal rates is whether premium subscriptions are for longer or shorter periods than one year. Premium subscriptions renewing on a yearly or multi-year basis allow for fewer opportunities of failure to renew such subscription compared to monthly subscriptions, whether deliberately or through failure to update payment information upon expiration. As of December 31, 2025, yearly and multi-year premium subscription packages constituted approximately 83% of all premium subscriptions. Substantially all of our premium subscriptions renew automatically at the end of each subscription period unless users actively disable the automatic renewal of their subscription in advance or if we are unable to renew their subscription.
We further increase the revenue we generate from premium subscriptions by offering additional business solutions tailored for more specific business needs and also by increasing the price of our premium subscriptions.
A number of factors could impact our ability to attract partners or other users from which we can generate new premium subscriptions, as well as our ability to retain our existing premium subscriptions, and to increase revenue from such premium subscriptions including through the adoption of our business solutions. These factors include:
•the quality, reliability, security, integrity, functionality, and design of our platforms compared to other similar solutions and services;
•our ability to develop required new technologies or offer new and relevant third-party products and service offerings to our users, such as Wix Harmony and other technologies which incorporate AI;
•our users’ spending levels or desire to create a web presence, including due to macroeconomic forces or geopolitical circumstances beyond our control;
•shifting demand in online commerce, including as a result of global supply chain deficiencies, or international trade policies, taxes, government regulations, and tariffs;
•our ability to develop additional product functionality and administrative back-office capabilities for our partners, and to properly integrate such developments, to allow them to adequately sell our products to their customers and properly manage their operations;
•our ability to optimize our marketing strategies and to execute successful marketing and sales activities, including those aimed at attracting and retaining partners, such as our partners’ revenue sharing programs;
•pricing decisions we implement for our solutions, including the pricing of our solutions and services compared to our competitors;
•the introduction and adoption of new pricing models for products and services that incorporate AI Technologies, such as the use of AI credits, which may increase costs and affect user purchasing behavior, perceived value, and overall demand for our solutions;
•our ability to develop and offer a fully optimized mobile experience for our users;
•our ability to bundle certain solutions into an attractive subscription package, and the variety of the subscription packages and business solutions we offer;
•the reliability and availability of our Customer Care and account management services to provide the proper support required by our registered users and partners;
•the perceived or actual quality or compatibility problems with our solutions, including those related to system outages, unscheduled downtime, diminished website and application performance and loading times;
•the perceived safety and impact of any cyber-attacks on our and our users’ data;
•competitive factors affecting the software as a service, or SaaS, business market, including the competitive landscape and the strategies that may be implemented by our competitors, including as a result of AI advancements, and the ease with which a user can switch to a competitor;
•unexpected increases in the cost of acquiring new registered users or partners;
•our dependence on establishing and maintaining strong reputation and brand perception;
•the long-term strategic decisions we make which may not maximize our short-term revenue or profitability;
•our ability to expand into new geographic markets, including our ability to make our products, support and communication channels available in additional languages and make our solution compliant with local laws and regulations; and
•material limitations or regulatory restrictions that may impact our ability to generate revenue, such as restrictive regulatory initiatives and limitations on our ability to bill our users on a recurring basis or the manner in which the rebilling is performed, as well as our cancellation policies and practices.
If we are unable to maintain and enhance the strength of our brand, or if events occur that damage our reputation and brand, our ability to expand our base of users and partners and premium subscriptions and to grow our revenues from the sale of such subscriptions and other products may be impaired, and our business and financial results may be harmed.
We believe that maintaining, promoting and enhancing the Wix, and other brands we operate, is critical to expanding and retaining our base of users that may purchase premium subscriptions and business solutions over time, as well as to our partners who sell our solutions to, or purchase our solutions on behalf of, their customers, or for their own uses. In addition to paid promotions, our Wix and our other brands are promoted through free sources, including customer referrals, word-of-mouth and direct searches for our “Wix” name or our other brands, or web presence solutions, in search engines. The strength of the “Wix” brand is also essential to maintaining our cost-efficient marketing strategy. The following factors and events may contribute to our inability to maintain and enhance our brands, or damage our business, reputation and brands:
•any local or global unfavorable media coverage or negative publicity about our industry or our company, including as a result of doubts as to the continued viability of the industries we operate in, in light of AI advancements, or litigation, unwanted scandals, publicized conflicts, or hostilities between Israel and its neighboring countries and regions, and any potential escalation of the conflict throughout the region;
•becoming targeted by activist groups seeking to bring attention to elements of our brand, products, business model, employment practices, sustainability practices, advertising, spokespeople, locations, countries in which we operate, organizations or political or other matters we support or do not support, in order to gain support for their interests or deter us from continuing practices with which they disagree;
•our ability to provide high-quality, well-designed, useful, reliable, secure, data privacy protective, accessible, innovative, relevant and competitive solutions and services, including through AI driven tools, which we may not do successfully or may not do as successfully as our competitors;
•our ability to develop solutions and products that meet the design and technological needs of our partners and tech savvy users, such as our AI agents and other tools and Wix Studio, as well as the needs of users with more basic technological skills, such as Wix Harmony;
•introduction of new terms of use or policies that users perceive unfavorably;
•introduction of new pricing models, including those that propose AI credits or similar usage models, that may be perceived negatively;
•the ability of our Customer Care team to provide customer support to our users at a highly professional level, including elevated levels of support to our partners and large or enterprise size users;
•our international branding efforts may prove unsuccessful due to language barriers, an unfamiliar regulatory landscape, political perspectives, and cultural differences, and we may therefore be unsuccessful in establishing strong brand adoption in new and existing markets and geographic locations;
•our inability to integrate third-party applications desired by our users or negative experiences our users have with using third-party applications and websites integrated with Wix, including through our App Market, if they do not meet users’ expectations which can include quality, data privacy or security;
•our ability to promote new brands we acquire may prove unsuccessful and may create negative perceptions about our native brands;
•certain third-party providers that our users rely on, may discontinue their engagement with us, which could have an adverse effect on our reliability and reputation;
•errors, defects, disruptions, security vulnerabilities, abuse of our system, or other performance problems with our products and platforms, including the products and solutions we license from third parties, may harm our reputation and brand, especially if these errors occur when we introduce new services or features, all of which may reduce our revenues;
•if our social media advertisements are unappealing to certain audiences or are showcased within content that is unappealing to users, or if we remove or fail to remove content that may or may not be perceived as offensive or controversial to certain audiences, our brand and reputation may be harmed;
•if we are unable to block fraudulent users from conducting their business on our platform or if we fail in blocking illegal activity, such as money laundering or drug trafficking, or other hostile or offensive activities, from taking place on our platform, our reputation and our results of operations, in particular in our online commerce offering may be harmed;
•any allegation that we have neglected public commitments regarding our environmental, social, and governance (“ESG”) and human capital management initiatives, including if we do not adapt to or comply with expectations, standards, and regulations, regardless of whether there is a legal requirement to do so; and
•if our users, partners, or third parties with whom we work violate applicable laws or our policies, or act in a manner that could negatively implicate us, those violations and actions could result in other liabilities for us and could harm our business, reputation, and brands.
If our reputation is harmed, we may be unable to sell our products and solutions, including through partners who may be less inclined to offer our services to their customers. If we fail to successfully promote and maintain the Wix, or other brands we operate, or if we incur excessive expenses in this effort, our business and our financial results may be adversely affected.
Our results of operations would be adversely affected if our selling and marketing strategies and activities fail to generate new users or partners that purchase premium subscriptions and business solutions or fail to increase the revenue we generate from each premium subscription to the levels we anticipate.
We acquire new registered users, who may purchase premium subscriptions and business solutions over time, through paid marketing channels, such as cost-per-click (“CPC”) advertisements on search engines, social networking sites and through our affiliate program, targeted and generic banner advertisements on other sites, and social network influencers who promote the platforms we operate. In addition, premium subscriptions are also acquired through the selling and marketing activities of our sales and account management teams that targets partners, who may purchase a higher volume of premium subscriptions to sell to their customers, including through incentivizing partners through revenue sharing programs, as well as to enterprise-level users who purchase premium subscriptions and other services for their own needs. Our selling and marketing activities also focus on increasing revenues from existing premium subscriptions by offering complementary business solutions. We may also invest a portion of our marketing expenses on more traditional advertising and promotion of our brand, including through sponsorships with professional sports franchises and others.
In 2025, 2024 and 2023, advertising expenses were $243.6 million, $175.6 million and $142.8 million, respectively, representing 12%, 10% and 9% of our revenues, respectively.
In order to maintain and grow our revenues, we need to continuously optimize and diversify our marketing campaigns and strategies aimed at acquiring new registered users. We customarily optimize our marketing activities by conducting search engine optimization, A/B testing, and extrapolation of historical user behavior to predict future user behavior in order to structure our marketing activities in the manner that we believe is most likely to encourage the user behaviors that lead to desired future outcomes.
A number of factors could impact our ability to succeed in our sales and marketing strategy and execution and to generate the return on marketing that we expect, including:
•if we fail to accurately predict user acquisitions or interest or to estimate the conditions and behaviors that drove historical user behavior, in particular during turbulent global macroeconomic times that lead to inflation or supply chain challenges, such as the global impact of the hostilities between Israel and its neighboring countries and regions (and any potential escalation of the conflict throughout the region) and between Russia and Ukraine, or changes to international trade policies and tariffs;
•if we lose access to one or more of the paid marketing channels we utilize and other marketing channels, such as social media influencers, for any reason, including the costs of advertising becoming prohibitively expensive or political or other backlash including as a result of hostilities between Israel and its neighboring countries and regions, we may not be able to promote our brand effectively, which could limit our ability to grow our business;
•privacy and AI regulations may restrict our ability to collect, use, or target user data for marketing purposes; restrictions on email marketing, cookies, or digital advertising can also reduce campaign effectiveness;
•if the levels of organic or free traffic to our site decrease due to search engines or social networking sites, modifying their algorithms or changing their terms of use or policies, or becoming subject to restrictive regulatory initiatives such as the Digital Markets Act, or DMA, in the European Union or other competition legislation, our websites may appear less prominently or not at all in search results, which could result in fewer potential users or potential partners clicking through to our website and impede our ability to deploy our marketing efforts;
•if competitors increase their marketing spend, introduce innovative campaigns, or offer aggressive pricing or promotions, our own marketing impact may be diluted;
•if AI alternatives to internet search methods disrupt traditional search engine models by changing the way information is accessed, organized, and presented to users; user behavior may be altered, market dynamics may shift, our marketing strategies may be unsuccessful, and the levels of organic or free traffic to our site may be reduced;
•if our user acquisition strategy in targeting a smaller number of higher-intent users rather than a larger base of lower-intent users is unsuccessful;
•if we are unable to adapt to changes in how users consume media or deploy emerging marketing channels, such as those that incorporate AI-technologies, we may not be successful in reaching desired audiences;
•if our sales and marketing efforts and campaigns to partners or new user demographics, such as users of our Base44 offering, are unsuccessful; and
•if we experience an unexpected increase in the marginal acquisition cost of new registered users.
If we fail to achieve our marketing return on investment targets within the timeframe we expect and if our rates of premium subscription acquisitions and revenue per subscription fail to meet market expectations, any of these could have a material adverse effect on our results of operations and share price.
Our use, development, adoption, deployment and maintenance of AI Technologies may present significant risks, which could result in increased costs, litigation, reputational harm and liability.
We use both internally and third-party developed AI, machine learning, and automated decision-making technologies, including proprietary AI and machine learning algorithms and models, (collectively, “AI Technologies”) throughout our business, and are constantly working on expanding our AI capabilities, internally and through collaborations with vendors, including through improvements to our existing AI Technologies, as well as through development of new products and features. For example, we use AI Technologies as part of our product offering, and to improve our internal workflows and development velocity. We also are developing and deploying agentic AI systems that operate with greater autonomy, which presents additional risks, including unintended or unauthorized actions and increased difficulty predicting, supervising, and controlling agentic behavior.
We have incurred increased costs for developing AI Technologies and expect that increased investment will continue to be required in the future to continuously improve our use of AI Technologies, which may include acquisitions of companies with AI Technologies that we need. As with many technological innovations, there are significant risks involved in developing, maintaining and deploying AI Technologies, and there can be no assurance that the usage of or our investments in AI Technologies will always enhance our products or services or be beneficial to our business, including our efficiency or profitability.
In particular, if the models underlying our AI Technologies are incorrectly designed or implemented; trained or reliant on incomplete, inadequate, inaccurate, biased, infringing, or otherwise poor quality data, the performance of our services and business, as well as our reputation and the reputations of our users, could suffer. If we fail to successfully and meaningfully develop, adopt, use, differentiate and maintain AI capabilities into our internal operations, effectively manage the related risks or if we are unable to improve productivity, enhanced customer experience or accelerated innovation, our growth and competitiveness could suffer.
With respect to our products or services that incorporate AI Technologies, the market for such products and services is rapidly evolving and unproven in many industries, including in the industries in which we operate, and important assumptions about the characteristics of targeted markets, pricing, sales cycles, cost, performance, and perceived value associated with our services or products may be inaccurate. We cannot be sure that the market will continue to grow or that it will grow in ways we anticipate.
In addition to our proprietary AI Technologies, we incorporate AI Technologies licensed from third parties in our technologies and our ability to continue to use such technologies at the scale we need may be dependent on access to specific third-party software and infrastructure. We cannot control the availability or pricing of such third-party AI Technologies, especially in a highly competitive environment, and we may be unable to negotiate favorable economic terms with the applicable providers. Certain of our competitors may be able to procure lower-priced third-party AI Technologies which are unavailable to us. If any such third-party AI Technologies become incompatible with our solutions or unavailable for use, or if the providers of such models unfavorably change the terms on which their AI Technologies are offered or terminate their relationship with us, our solutions may become less appealing or prohibitively expensive to our customers and our business will be harmed. In addition, to the extent any third-party AI Technologies are used as a hosted service, any disruption, outage, or loss of information through such hosted services could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in our solutions, or result in legal claims or proceedings, for which we may be unable to recover damages from the affected provider.
We also incorporate generative AI Technologies (i.e., AI Technologies that can produce and output new content, software code, data and information) into our solutions and internal business practices. There is a risk that generative AI Technologies could produce inaccurate or misleading content or other discriminatory or unexpected results or behaviors, such as hallucinatory behavior that can generate irrelevant, nonsensical, or factually incorrect results, all of which could harm our reputation, business, or customer relationships. While we take measures designated to ensure the accuracy of such AI generated content, those measures, including those taken by third parties, may not always be successful, and in some cases, we may need to rely on end users to report such inaccuracies. While some providers of AI Technologies offer to indemnify their end users for any copyright or other intellectual property infringement claims arising from the output of their AI Technologies, we may not be successful in adequately recovering our losses in connection with such claims.
In addition, we may experience difficulties in enforcing the intellectual property rights in output generated by generative AI Technologies. The United States Copyright Office has previously denied copyright protection for content generated by AI Technologies, and the United States Patent and Trademark Office has similarly stated that an AI tool cannot be an “inventor” of a patent, rendering it impossible to obtain patent protection for inventions created solely by AI Technologies. The Supreme Court of the United Kingdom has reached a similar conclusion, stating that AI systems cannot be named as an “inventor” for UK patent law purposes.
Further, if we are deemed to not have sufficient rights to the data we, or third parties, may use to train our generative AI Technologies, we may be subject to litigation by the owners of the content or other materials that comprise such data, similar to the litigation that is currently pending in various U.S. courts against other developers of generative AI Technologies, and in which the outcome of such litigation is uncertain.
In certain cases, we may have trained our models for our generative AI Technologies on open source datasets. We cannot be certain that the licensors of such open source datasets had sufficient rights in the underlying data to be able to make them available under an open source license. Use of such open-source generative AI Technologies could introduce inaccuracies or vulnerabilities that we are unable to anticipate, detect, or control. If the licensor for such open-source generative AI Technologies developed their models by training on data that was inaccurate, biased or for which it did not have the appropriate rights, we could be subject to claims or lawsuits, including for infringement of third-party intellectual property. Sophisticated attackers may exploit vulnerabilities in open-source generative AI Technologies to obtain access to our or our customers’ sensitive data or alter the outputs or results. In addition, our usage of open-source generative AI Technologies may require us to license our data or intellectual property to third parties and limit our ability to protect our intellectual property rights or proprietary data.
If we fail to maintain a consistently high level of Customer Care, our brands, business and financial results may be harmed.
We believe our focus on customer care is critical to retaining, expanding and further penetrating our user base, as well as converting registered users into purchasing premium subscriptions and adopting our business solutions. As a result, we have invested in the quality and training of our Customer Care operations and call center personnel in many of our global locations and through our outsourced offshore Business Process Outsourcing (“BPO”) teams. We have also incorporated AI Technologies to improve the quality, scalability and productivity of our Customer Care operations, which may also carry regulatory, legal, business, reputational and financial risks.
If we are unable to maintain a consistently high level of Customer Care, including throughout our different customer care teams globally and our offshore BPO teams which may not be as highly-trained, in particular given the growing scope, complexity and diversity of our solutions, if our technological capabilities and different methods of communication with our users, including those that incorporate AI, prove inaccurate, inconsistent, incomplete, may fail to appropriately address complex or urgent customer issues, or are inadequate in supporting our users who prefer human interaction or other methods of interaction than we provide, and if we fail to provide partners with the levels of support they anticipate, we may lose existing registered users and partners, may be unable to generate premium subscriptions from such user base or increase our sales of business solutions to our existing premium subscribers, may be exposed to legal or regulatory risks if material issues are not properly addressed, and may not be successful at maintaining and expanding our partners demographic. If we fail to maintain adequate Customer Care and ease the use of our platforms’ functionality in accordance with our users’ needs, our reputation, financial results, and business prospects may be materially harmed.
Our future prospects may be adversely affected if we are unable to generate revenue from sources other than our premium subscription packages, which comprise a majority of our Creative Subscriptions Revenue.
In addition to Creative Subscriptions Revenue, we generate Business Solutions Revenue from additional products and services that are offered to our users to enhance their digital presence, including email services through Google Workspace, applications sold through our App Market or elsewhere on our platform or on platforms operated by our subsidiaries, and from revenue sharing agreements we have for the sale of payments services through Payments by Wix, paid ad campaigns, shipping services, and other solutions. Our ability to increase Business Solutions Revenue from sales made by our e-commerce users is affected by the scope and volume at which such users are able to sell their merchandise and services through our platform. We cannot offer any assurances that Business Solutions Revenue will gain user adoption, continue to grow at a similar pace as in prior years, that our e-commerce users will continue to be successful, or that sales of the business solutions we may offer in the future will be a significant part of our revenues. Material changes in our agreements with certain providers may significantly affect our ability to generate revenue from sources associated with such providers. If we do not succeed in selling these solutions, our future prospects may be adversely affected.
Our short operating history in the newly-developing “vibe-coding” market, in particular with respect to our Base44 offering, might make it difficult to evaluate our current business and future prospects in this market, and may increase the risk that we will not be successful.
In June 2025, we acquired Base44, an Israeli early-stage startup, which offers an AI-powered platform enabling users to build fully functional web and mobile applications via natural-language prompts, automatically generating front-end, back-end, databases, authentication and deployment infrastructure, without the need for manual coding, a method known as “vibe-coding.”
The market for intuitive, AI-driven web application development tools is at an early stage, and it is uncertain whether sufficient user adoption or market acceptance will develop to support our continued investment in Base44.
Additionally, the costs associated with developing, maintaining, and scaling AI-driven platforms like Base44 are substantial and may not subside in a timely manner. These costs include ongoing investments in computing infrastructure and AI-related costs, marketing to new user demographics to which we are not accustomed to market to, data acquisition, and specialized talent. If the underlying concept fails to gain traction, if we are unable to monetize Base44 at a level that offsets these high costs, or if industry pricing pressures or competition, in particular from the dominant LLM developers, limit our ability to generate revenue, Base44 may not become profitable and could negatively impact our overall financial performance.
If we are unable to successfully manage these risks, our business, financial condition, and results of operations could be materially and adversely affected.
Our business is susceptible to risks associated with international operations and the use of our platforms in various countries, including in emerging markets.
We currently have users worldwide, and we expect to continue to increase the volume of our operations worldwide in the future. However, our operations in various countries subject us to risks which may include:
•difficulties related to contract enforcement, including our terms of use;
•compliance with foreign laws and regulations applicable to cross-border operations including accreditation, requirements to do business, export controls, anti-money laundering and bribery, copyright, consumer protection, online advertising, emerging AI regulations, and liability of Internet service providers, some of which may be conflicting; data privacy and data localization laws that may require, for example, that user data and data of our users’ consumers be stored and processed in a designated territory;
•customization of our services and business solutions to be compliant with local laws and regulations applicable to our users and their customers, including requirements to form joint ventures or other partnerships with local entities;
•lower levels of internet use in certain geographical locations;
•lower levels of adoption of AI Technologies which can render our solutions incompatible with certain markets;
•tax consequences and customs changes, including the complexities of foreign value-added tax (or other tax) systems, transfer pricing, and treaties;
•uncertain legal, political and economic climates and increased exposure to global political, economic, and social risks that may impact our operations or our users’ operations, including the impact of global health emergencies, supply chain disruptions, terrorism, war, including the hostilities between Israel and its neighboring countries and regions (and any potential escalation of the conflict throughout the region), and between Ukraine and Russia, natural disasters and other foreign events;
•currency exchange rates and changes to free trade agreements, trade protection measures, tariffs, restrictions related to foreign exchange controls, export compliance, economic sanctions measures, qualification to transfer business and additional regulatory requirements;
•different sources of competition;
•different customer spending levels, in particular in light of global macroeconomic trends; and
•differing levels of credit card use, access to online payment methods, and payment risks.
These factors, or other factors, may cause our international costs of doing business to exceed our expectations and may also require significant management attention and financial resources.
Entry into additional international markets, particularly emerging markets, requires significant management attention and financial resources, and presents challenges that are different from those associated with more developed international markets. In particular, regulations limiting the use of local credit cards and foreign currency could constrain our growth in certain countries. For example, regulations in certain countries may restrict recurring charges on credit cards. We have established subsidiaries in certain foreign jurisdictions and may continue to expand into new jurisdictions to facilitate local payments and may be subject to local regulations in such respective jurisdictions. Countries or states may be subject to governmental sanctions, or sanctions placed by payment processors or other companies, which could restrict our ability to charge users. Additionally, in emerging markets we may face the risk of rapidly changing government policies, including with respect to bank transfers and various payment methods, including in-person methods, and we may encounter sudden currency devaluations. Currency controls in emerging countries may make it hard for us to repatriate bookings or profits that we generated in a particular country. We may also face pressure to lower our prices to compete in emerging markets, which could adversely affect revenue derived from our international operations.
These and other factors associated with our international operations could impair our growth prospects and adversely affect our business, operating results and financial condition.
Our operations in and connected to Ukraine have been, and may continue to be materially impacted on a long-term basis as a result of the ongoing war initiated by Russia in Ukraine, and our business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy resulting from the war in Ukraine.
We have had operations in Ukraine since 2013. As of the year ended December 31, 2025, we engaged 594 contractors in Ukraine, as well as 11 employees, primarily focused on research and development activities and Customer Care. As a result of the military invasion of Ukraine by Russian forces that began in February 2022, we assisted many of our Ukrainian team members to leave Ukraine, and those team members have relocated to other countries, primarily Poland, or have relocated within Ukraine. In addition to a significant number of personnel and operations in Ukraine, we also lease office space in a number of cities in Ukraine, all or some of which may be damaged or destroyed as a result of the attack against Ukraine. We are actively monitoring and enhancing the security of our people and their families and the stability of our infrastructure, including communication methods, physical assets, electricity, and internet availability and handling potential impacts to our development infrastructure. However, we cannot assure that our efforts to maintain stability will not affect our business.
Additionally, the conflict between Ukraine and Russia has led to sanctions being levied by the United States, the European Union, the United Kingdom, and other countries against Russia, Belarus, and certain Russian occupied regions in Ukraine, has led to and could lead to significant market and other disruptions, including significant volatility in commodity prices, instability in financial markets, supply chain interruptions, political and social instability, and increases in cyberattacks, all of which have impacted and could continue to impact our business, and our Ukraine operations for an unknown period of time. In response to these sanctions, in March 2022, we discontinued our commercial operations in Russia and in 2024 restricted Russia-based users from accessing the Wix platform.
Although the severity, duration and geographic scope of the ongoing war are highly unpredictable, the war in Ukraine could materially disrupt our operations in and connected to Ukraine and other parts of the world affected by the war, including due to lower morale of our teams in the area, increased levels of our personnel being drafted into military duty, which may lead to disruption of our operations and productivity of our personnel.
We are exposed to risks, including security risks, associated with payment processing and the provision of financial services, particularly in relation to payment transactions processed through Wix Payments, which may subject us to regulatory requirements, contractual obligations, and other risks that could be costly and difficult to comply with or that could harm our business.
We accept payments from our users, primarily through credit and debit card transactions and alternative payment methods, and facilitate payment collection by our users from their customers through Payments by Wix, our payment service, which enables our users to accept payments for goods and services sold online and in-person to their customers, from a variety of payment providers, on major credit and debit cards, and alternative payment methods.
This includes Wix Payments, our proprietary payment service, as well as third-party payment processors.
We are subject to a number of risks related to our ability to receive payments from our users, and our facilitation of payment processing of our users from their customers, including:
•interchange and other fees paid by us, which may increase over time and may require us to either increase the prices we charge for our products or experience an increase in our operating expenses;
•potential failures of our billing systems to automatically charge our premium subscribers’ payment methods on a timely basis or at all;
•if our users are unable to collect payments from their customers, we could lose revenues or cause our users to lose revenues which could harm our business and reputation;
•if we are unable to maintain our chargeback rate at acceptable levels, in particular during turbulent economic times, our credit card fees for chargeback transactions or our fees for other credit and debit card transactions or issuers may increase, acquiring banks or payment card networks may place us in their fraud monitoring programs, we may face fines from the issuers, and in certain scenarios may terminate their relationship with us;
•increased costs and resources to deal with user onboarding and fraudulent transactions or chargeback disputes, which may increase in an economic downturn if users become insolvent, bankrupt or otherwise unable to fulfill their commitments;
•potential fraudulent or otherwise illegal activity by our users, their customers, developers, employees or third parties, or activities prohibited by our payment providers which could lead to our increased liability or incursion of fines, in particular with respect to our Wix Payments operations or as a result of our usage of AI Technologies to detect such activities which may not be successful;
•our reliance on third parties such as gateways, payment service providers and acquiring banks, which may experience vulnerabilities in their internal control systems, face down time, insolvency or other instabilities in the banking system, and thus affect our cash flow;
•restrictions on funds or required reserves related to payments; and
•additional disclosure and other requirements, including new onboarding authentication, reporting regulations and new credit card associated rules.
Depending on how Payments by Wix evolves, we may currently, or in the future, be subject to laws and regulations, either in existing or new jurisdictions, relating to our payment facilitation services and provision of financial services, including with respect to foreign exchange, anti-money laundering, counter-terrorist financing, banking and import and export restrictions. In some jurisdictions, the application or interpretation of these laws and regulations is not clear. In certain cases, such as under Wix Payments, we may act as a payment facilitator.
Our efforts to comply with these laws, regulations, and standards could be costly and result in diversion of management time and effort and may still not guarantee compliance. In the event that we are found to be in violation of any such legal or regulatory requirements, we may be subject to monetary fines or other penalties such as a cease and desist order, or we may be required to make changes to our platform, any of which could have an adverse effect on our business, financial condition and results of operations.
Financing services we may offer to our users, may expose us to additional risk, such as non-remittance, liability for non-compliance with laws and regulations, and changes in laws and regulations governing such solutions may result in higher operational costs, or the discontinuation of these services.
The payment card networks, such as Visa and MasterCard, have also adopted rules that apply to all merchants who process and accept credit and debit cards for payment of goods and services. These networks have the discretion to both set and interpret such rules, and may do so with little or no prior notice. We are obligated to comply with these rules as part of the contracts we enter into with payment processors and acquiring banks. The rules adopted by the payment card networks include the Payment Card Industry (PCI) Data Security Standards (“PCI DSS”). Under PCI DSS, we are required to adopt and implement internal controls over the use, storage and security of payment card data to help prevent fraud.
If we fail to comply with the rules adopted by the payment card networks, including the PCI DSS, we would be in breach of our contractual obligations to payment processors and merchant banks, which may include indemnification clauses. Such failure to comply may subject us and/or our users to fines, penalties, damages, higher transaction fees, and civil liability, and could eventually prevent us or our users from processing or accepting debit and credit cards or could lead to a loss of payment processor partners. We also cannot guarantee that such compliance will prevent illegal or improper use of our payments systems or the theft, loss or misuse of the debit or credit card data of registered users or participants or regulatory or criminal investigations. Moreover, any such illegal or improper payments could harm our reputation and may result in a loss of service for our users, which would adversely affect our business, operating results and financial condition.
Exchange rate fluctuations may negatively affect our results of operations.
Our results of operations and cash flows are affected by fluctuations due to changes in foreign currency exchange rates. For example, in 2025, we incurred financial income (expenses), net of approximately $43.1 million in expenses related to hedging activities and $7.2 million in currency exchange rate losses, compared to $6.5 million in hedging income and $4.7 million in net currency exchange rate gains in 2024.
In 2025, approximately 65% of our revenues were denominated in U.S. dollars and approximately 35% in other currencies, primarily in Euros, British Pounds, Japanese Yen, Mexican Pesos, Canadian Dollar, Australian Dollar, and the Brazilian Real. In 2025, approximately 66% of our cost of revenues and operating expenses were denominated in U.S. dollars and approximately 27% in New Israeli Shekels, or NIS. Our NIS - denominated expenses consist primarily of personnel and overhead costs, such as the lease of our headquarters. Since a significant portion of our expenses are denominated in NIS, the appreciation of the NIS relative to the U.S. dollar might adversely impact our net loss or net income (if any). We estimate that a 10% appreciation in the value of the NIS against the U.S. dollar would have decreased our net income by approximately $53.4 million in 2025. We estimate that a 10% concurrent devaluation of foreign currencies including Euros, British Pounds, Japanese Yen, Mexican Pesos, Canadian Dollar, Australian Dollar and the Brazilian Real against the U.S. dollar would have decreased our net income by approximately $64.6 million in 2025. These estimates of the impact of fluctuations in currency exchange rates on our historic results of operations may be different from the impact of fluctuations in exchange rates on our future results of operations since the mix of currencies comprising our revenues and expenses may change. We evaluate periodically the various currencies to which we are exposed and take selective hedging measures to reduce the potential adverse impact from the appreciation or the devaluation of our non-U.S. dollar-denominated expenses and revenues, as appropriate and as reasonably available to us. We cannot provide any assurances that our hedging activities will be successful in protecting us from adverse impacts from currency exchange rate fluctuations, in particular during turbulent macroeconomic periods. Additionally, the costs associated with implementing hedging instruments can be substantial and may adversely affect our financial results. See Item 11. “Quantitative and Qualitative Disclosures about Market Risk.”
Failures of the third-party hardware, software and infrastructure on which we rely, including third-party data center hosting facilities, could adversely affect our business.
We rely on collocated servers, cloud service providers and other third-party hardware, software and infrastructure to support our operations. Our primary data centers are located in two geographically separate locations in the United States, one located on the East Coast and the other located on the West Coast, each of which is capable of running individually, and we have additional Content Delivery Network (“CDN”) providers worldwide and a hosting data center in Europe to improve our performance and provide backup in case of failure of our primary data centers. The vast majority of our computing and data is located in our primary data centers in the United States hosted by Google, Inc. and Amazon.com, Inc., as well as by additional providers that we may use for specific purposes. Our network equipment is built with redundancy and efficiency in mind, and is stored in data center premises leased from Equinix, Inc., and connected to cloud providers such as Google, Inc. and Amazon.com, Inc. If our server providers are unable or cease, for any reason, to make their data centers available to us without sufficient advance notice, we would likely experience delays in the service we provide our users, until the migration to an alternate data center provider or other service provider is completed.
Moreover, if for any reason our arrangement with one or more of the providers of the data centers and/or cloud servers that we use is terminated, we could incur additional expenses in arranging for new facilities and support.
The owners and operators of the data centers and cloud services with which we are engaged, do not guarantee that our users’ access to our platform will be uninterrupted or error-free. We do not control the operation of these facilities and such facilities could be subject to break-ins, cyber-crimes, computer viruses, sabotage, industrial espionage, intentional acts of vandalism, terrorist attacks, fraud and other misconduct, as well as damage or interruption from fires, adverse weather conditions, and natural disasters, including various climate risks, war, power loss, telecommunications failures or similar catastrophic events. Problems faced by our third-party vendors and partners, including hosting providers, technological or business-related disruptions exacerbated by AI and new technologies, as well as cybersecurity threats which may increase during times of war, could adversely impact our business and results of operations, as well as the experience of our users, which in turn could adversely impact our business and results of operations. Cyberattacks and security incidents are expected to accelerate in both frequency and impact, as the use of AI increases and attackers become increasingly sophisticated and utilize tools and techniques that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence.
Although we have multiple data centers, disruptions to any of these servers or facilities could interrupt our ability to provide our platform and solutions and materially adversely affect our business and results of operations.
Any disruption, disabling, or attack affecting our equipment and systems and the hardware, software and infrastructure on which we rely could result in a data security or privacy breach. Whether such event is a result of physical human error or malfeasance (whether accidental, fraudulent or intentional) or electronic in nature (such as malware, virus, or other malicious code), such an event could disrupt or delay our ability to provide our platform and solutions to subscribers, result in the unauthorized access to and disclosure of personal or confidential data, result in loss or corruption of data we store, subject us to legal liability and regulatory inquiry, harm our reputation and materially adversely affect our business and results of operations.
Our results of operations and business could be harmed if we fail to manage the operation of our infrastructure effectively.
The scalability and flexibility of our cloud-based infrastructure, particularly in times of growth in our business and operations, depends on the functionality of our third-party servers and their ability to handle increased traffic and demand for bandwidth. We may be unable to achieve or maintain data transmission capacity high enough to handle high levels of traffic or process transactions in a timely manner. Our failure to achieve or maintain high data transmission capacity could significantly reduce demand for our platform and solutions and could negatively impact our reputation. The growth in the number of registered users and transactions in the past few years, and new developments and functionalities offered on our platform, has increased the amount of both our stored marketing and research data and the data of our users and their users that we require. Further, as we continue to attract users who utilize our online commerce solutions, the volume of transactions processed on our platform is expected to increase, especially if such users draw significant numbers of buyers over short periods of time. These, and other developments, such as increased use of AI Technologies, may place additional pressure on our infrastructure and may affect the quality of our platform and efficiency of our operations. Unreliable or poorly optimized code resulting from non-rigorous development practices could place unexpected stress on our third-party infrastructure, leading to system failures and service interruptions that materially affect our users.
In the future, we may be required to allocate resources and spend substantial amounts to build, purchase and lease data centers and equipment and upgrade our technology and network infrastructure, to handle increased customer traffic and transactions, or to comply with data protection regulations in jurisdictions in which we provide our services, or due to us becoming a more open platform, if we choose to do so. Moreover, as our user base and variety grow, and as users rely on our platform for more complicated activities, including through Wix Studio, Base44 and Wix Harmony or similar solutions, we will need to devote additional resources to improving our infrastructure and continue to enhance its scalability to maintain the performance of our platform and solutions.
Our need to effectively manage our operations will also require that we continue to assess and improve our operational, financial and management controls, reporting systems and procedures. We may encounter difficulties obtaining the necessary personnel or expertise to improve those controls, systems and procedures on a timely basis relative to our needs. If we do not manage our infrastructure effectively, the quality of our platform and efficiency of our operations could suffer, which could materially harm our results of operations and business.
Our cash balances and investment portfolio have been, and may continue to be, adversely affected by market conditions, including inflation and interest rates and other adverse developments affecting the financial services industry.
At December 31, 2025, we had liquid assets totaling $1.65 billion, comprised of $696.6 million in cash and cash equivalents and short-term deposits and $958.1 million in short-term and long-term marketable securities. Our investments are subject to general credit, liquidity, defaults, non-performance, inflation, rating agency downgrades, and interest rate risks or other adverse developments that affect financial institutions, other companies in the financial services industry, or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, which have in the past and may in the future lead to market-wide liquidity problems. The performance of the capital markets affects the values of the funds that are held in marketable securities. These assets are subject to market fluctuations and various developments, including, without limitation, rating agency downgrades that may impair their value. We expect that market conditions will continue to fluctuate and that the fair value of our investments may be affected accordingly.
We generally buy and hold our portfolio positions, while minimizing credit risk by setting limits for minimum credit rating and maximum concentration per issuer. Our investments consist primarily of government and corporate debentures, and the continuing turmoil in the financial markets, especially due to the uncertainties related to global macroeconomic trends including liquidity concerns in local and global banking systems, and effects of the hostilities between Israel and its neighboring countries and regions (and any potential escalation of the conflict throughout the region), and between Ukraine and Russia, may result in impairments of the carrying value of our investment assets. We classify our investments as available-for-sale. Changes in the fair value of investments classified as available-for-sale are not recognized as income during the period, but rather are generally recognized as other comprehensive income (loss), which is a separate component of equity until realized. Realized and credit losses related to our investments portfolio may adversely affect our financial position and results.
Any significant decline in the value of our investments as a result of the changes in interest rates and interest rate expectations of the financial markets, deterioration in the credit rating of the securities in which we have invested, or general market conditions, speculation about liquidity, both in the local Israeli banking system where a significant portion of our liquid assets are held, and globally, and elevated levels of inflation, could have an adverse effect on our results of operations and financial condition.
In addition, we regularly maintain cash, cash equivalents, bank deposits, and governmental bonds at financial institutions in the United States, Israel and abroad. Our funds at these institutions exceed insured limits and some are not insured at all. In the event of failure of any these financial institutions, there can be no assurance that we would be able to access uninsured funds in such financial institution in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position.
If we fail to manage our headcount effectively, we may be unable to execute our business plan, maintain high levels of service or address competitive challenges adequately. Furthermore, our corporate culture has contributed to our success, and if we cannot maintain this culture, our business, financial condition and results of operations may be harmed.
As of December 31, 2025, we had 5,340 employees and contractors, which represents a slight increase in our total headcount compared to December 31, 2024. Our workforce is located in various locations globally, including in Israel, the U.S., Canada, Ukraine, Lithuania, Ireland, Germany, Japan, the UK, Brazil, Poland, the Netherlands and Australia. As a result of the military invasion of Ukraine by Russian forces, we assisted many of our Ukrainian team members to leave Ukraine, and many have relocated to Poland and other countries or within Ukraine and members of our Ukrainian workforce have been called to active military duty. In addition, members of our Israeli workforce were drafted into active military reserve duty following the October 7, 2023 attacks by the Hamas terrorist organization on Israel and the ensuing war and hostilities between Israel and its neighboring countries and regions. Following our acquisition of Base44 in June 2025, many of our Wix team members transitioned to Base44-dedicated positions. Managing our headcount has placed, and will likely continue to place, a significant strain on our managerial, administrative, operational, financial and other resources.
In addition, we believe that an important contributor to our success has been, and will continue to be, our corporate culture, as it fosters innovation and teamwork, as well as technologically advanced and well-crafted software and products. If we are unable to adequately manage our headcount and other business changes in a manner that preserves the key aspects of our corporate culture, we may be unable to continue to perform at current levels or execute our business strategy.
We have a history of operating losses and may not be able to achieve sustained profitability within our expected timeframe.
In recent years we incurred operating income, and have, as of December 31, 2025, an accumulated deficit of $850.9 million. Although our operating expenses as a percentage of revenue have decreased in recent years, we still anticipate incurring increased research and development expenses related to enhancing the functionality of our solutions, introducing new solutions, integrating newly acquired businesses, in particular those that incorporate AI Technology and which can create additional strains on expenses. We seek to leverage these expenses across a growing base of premium subscriptions, while maintaining and increasing the amount of bookings and/or revenues per premium subscription to achieve sustained profitability. Nevertheless, if we are unable to grow our premium subscriptions at the required rate or maintain or increase bookings and/or revenues per premium subscription, if we incur expenses that we believe are necessary or desirable (such as to invest in businesses, marketing, research and development or technologies that we believe will be important for our business) or if we incur unexpected expenses or achieve lower profit margins than we expect, including in our partners business, we may be unable to achieve sustained profitability within our expected timeframe.
Because we recognize revenues from premium subscriptions over the term of an agreement, downturns or upturns in sales are not immediately reflected in full in our operating results.
A majority of our revenues are recognized over the term of our contracts. As a result, much of the revenue we report each quarter is the recognition of deferred revenue from premium subscriptions entered into during previous quarters. Consequently, a shortfall in demand for our solutions and services or a decline in new or renewed subscriptions in any one quarter may not significantly reduce our revenues for that quarter but could negatively affect our revenues in future quarters. Accordingly, the effect of significant downturns in new or renewed sales of our solutions and service offerings are not fully reflected in our results of operations until future periods.
Our ability to pay cash upon conversion or repurchase of the 2030 Convertible Notes may be limited.
In September 2025, we sold $1,150,000,000 aggregate principal amount of 0.00% Convertible Senior Notes due 2030 (the “2030 Convertible Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act, all of which were outstanding as of December 31, 2025.
We may not have enough available cash or be able to obtain financing, or obtain financing on favorable terms, at the time we are required to make such repurchases of the 2030 Convertible Notes. For example, as more fully described in Item 5.E. “Operating and Financial Review and Prospects—Recent Developments,” on March 5, 2026, we announced that we commenced a “modified Dutch Auction” tender offer to purchase up to $1,750,000,000 in aggregate purchase price of our ordinary shares, which may restrict our ability to repurchase or redeem our 2030 Convertible Notes. In addition, our ability to repurchase the 2030 Convertible Notes upon any required repurchase event or to pay cash upon conversion of 2030 Convertible Notes (if the settlement method we elect for such conversion includes cash) may be limited by law, regulatory authority, or agreements governing our future indebtedness. Our failure to repurchase the 2030 Convertible Notes at a time when the repurchase is required by the applicable indenture or to pay cash upon conversion of such 2030 Convertible Notes as required by the applicable indenture would constitute a default under such indenture. A default under the indenture or the fundamental change itself within the meaning of the 2030 Convertible Notes indenture could also lead to a default under other agreements governing our future indebtedness. If the payments of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness.
Our 2030 Convertible Notes may impact our financial results, result in the dilution of existing shareholders and create downward pressure on the price of our ordinary shares.
Our 2030 Convertible Notes may affect our earnings per share figures, as accounting procedures may require that we include in our calculation of earnings per share the number of ordinary shares into which the 2030 Convertible Notes are convertible. The 2030 Convertible Notes may be converted, under the conditions and at the conversion price specified in the 2030 Convertible Notes, into cash, our ordinary shares and/or a combination thereof, at our election, which may cause dilution to our shareholders’ equity, and the market price of our ordinary shares may decrease due to the additional selling pressure in the market at or about the time of such conversions.
We may determine in the future to repurchase outstanding 2030 Convertible Notes from time to time in accordance with applicable SEC and other legal requirements and in consideration of market and other conditions. Any repurchases or exchanges of our outstanding 2030 Convertible Notes may affect the market price of our ordinary shares. We would expect that holders of any 2030 Convertible Notes that are repurchased or exchanged may enter into or unwind various derivatives with respect to our ordinary shares and/or purchase or sell our ordinary shares in the market to hedge their exposure in connection with these transactions (and are expected to do so, should we elect to unwind the 2030 Capped Call Transactions pro rata to the repurchased 2030 Convertible Notes). In addition, in connection with any repurchases of the 2030 Convertible Notes, the counterparties to the 2030 Capped Call Transactions (as defined below) or their respective affiliates may modify their hedge positions with respect to the 2030 Capped Call Transactions by entering into or unwinding various derivatives with respect to our ordinary shares and/or purchasing or selling our ordinary shares or other securities of ours in secondary market transactions. This activity could impact the market price of our ordinary shares at that time.
The terms and conditions in the Credit Facility Agreement could adversely affect our financial condition and impact our business needs and plans.
On March 3, 2026, we entered into a short-term Credit Facility Agreement with Hapoalim Bank Ltd. (the “Bank”), which provides a $500 million credit facility, available to be drawn in up to two tranches between April 1, 2026 and March 31, 2027 (the “Credit Facility Agreement”).
During the term of the Credit Facility Agreement, we are not permitted to create a general floating charge on all or substantially all of our assets.
The Credit Facility Agreement also includes a requirement that we maintain a Bank Debt to Free Cash Flow ratio (as defined below) that does not exceed 2.0x. If we were to anticipate non-compliance with the Bank Debt to Free Cash Flow ratio, we may take actions to maintain compliance with them. These actions may include reductions in our general and administrative expenses or capital expenditures, a decision not to request a draw under the Credit Facility Agreement, which could have an adverse effect on our business, financial condition, and results of operations. We cannot assure that our business will continue to generate sufficient cash flow from operations or that future financing will be available to us in an amount sufficient to enable us to service our debt, or to fund our other liquidity needs or execute on our strategic plans.
In addition, we are also required to maintain with the Bank approximately 1 billion NIS in Israeli Government Short Term Bills and a $120 million cash deposit. These requirements may affect our liquidity by reducing the amount of cash available for repurchase of our ordinary shares and/or convertible notes and general corporate purposes.
If any event of default occurs the Bank could also elect to terminate its commitments or cease making further loans, accelerate the outstanding loans and require immediate repayment.
For additional information relating to the Credit Facility Agreement, see Item 5.E. “Operating and Financial Review and Prospects—Recent Developments” in this annual report.
We may need to raise additional funds to continue our operations, and we may be unable to raise capital when needed or on acceptable terms.
From time to time, we may seek additional equity or debt financing to fund our operations, refinance our existing debt, develop new solutions and services or make acquisitions or other investments. The U.S. Federal Reserve, as well as other central banks, have raised the benchmark interest rate multiple times in the past, and there can be no assurance that rates will not remain elevated in the future. This could increase interest expense on additional debt financing and could materially adversely impact our ability to refinance existing debt upon maturity, sell assets at attractive terms, and limit our repurchase, acquisition and development activities.
Our business plans may change, other general economic, financial or political conditions in our markets may change, or other circumstances, such as illiquidity, insolvency or other instabilities of the global banking system, or instabilities arising out of hostilities between Israel and its neighboring countries and regions may arise, that have a material adverse effect on our cash flow and the anticipated cash needs of our business. Any of these events or circumstances could result in significant additional funding needs, requiring us to raise additional capital. We cannot predict the timing or amount of any such capital requirements at this time. If financing is not available on satisfactory terms, or at all, we may be unable to expand our business or to develop new business at the rate desired, and our results of operations may suffer.
We have made and may continue to make acquisitions and investments, which could result in operating difficulties and other harmful consequences.
From time to time, we evaluate potential strategic acquisition or investment opportunities to support strategic business initiatives, such as the recent acquisitions of Base44 in June 2025 and of Hour One AI Ltd. in May 2025. Any transactions that we enter into could be material to our financial condition and results of operations. The process of integrating an acquired company, talent, business or technology, could create unforeseen operating difficulties and expenditures. We may not be able to successfully integrate the acquired personnel, operations and technologies or effectively manage the combined business following the completion of the acquisition or any other complementary businesses or technologies we acquire in the future. We may also face competition for acquisitions from larger competitors that may have more extensive financial resources, which may increase the cost or limit the availability of acquisitions. Acquisitions and investments we evaluate from time to time may carry with them a number of risks, including the following:
•inability to consummate acquisitions considered significant to the future of our business;
•disruption of ongoing business and diversion of management’s time and focus from operating our business;
•underperformance of an acquired company or an inability to achieve synergies as planned; in part due to our inability to compete effectively in a new line of business given the lack of experience or knowledge, or other external factors, such as competitive alternatives, potential conflicts of interest, or shifting market preferences;
•elevated operating costs associated with acquired businesses, such as Base44, which may erode our overall profit margins;
•failure to identify significant problems, liabilities or other challenges during the due diligence process;
•potential incompatibility of corporate cultures;
•implementation or remediation of controls, procedures and policies of the acquired company;
•coordination of product, engineering and selling and marketing functions;
•retention of employees or loss of key employees from an acquired company;
•liabilities that are larger than we anticipate and unforeseen increased expenses or delays associated with acquisitions, including transition costs to integrate acquired businesses that may exceed the costs that we anticipate;
•difficulties and additional expenses associated with supporting legacy services and products and hosting infrastructure of the acquired company;
•difficulties in integrating, operating and managing an acquired company’s security and privacy infrastructure, which may be particularly challenging when acquired businesses utilize heavily customized or outdated systems, and difficulty integrating the accounting systems and operations of the acquired company;
•litigation or other claims or liabilities arising in connection with an acquisition, including failure of the acquired business to comply with laws and regulations or other requirements or conditions;
•adverse effects to our existing business relationships or the business relationships of our acquisition targets as a result of the acquisition or investment;
•the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries;
•the re-allocation of resources and personnel that are needed in other parts of our business to such acquired business;
•the use of substantial portions of our available cash to consummate the acquisition;
•share-based dilution as a result of equity awards assumed by us due to an acquisition and new equity grants to employees and other service providers of our acquired companies;
•incurrence of significant acquisition-related costs or elevated post-acquisition costs related to earn-out or other contingent payments; and
•unrealistic goals or projections for the acquisition.
In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment. In the future, if our acquisitions do not yield expected returns or if the valuations supporting our acquisitions or investments change, we may be required to take charges to our operating results based on this impairment assessment process, which could adversely affect our results of operations. Additionally, a number of our strategic investments are in early-stage companies, some of which may not be revenue-generating and which are at a higher risk of winding down.
Our failure to address these risks or other problems encountered in connection with acquisitions and investments we evaluate from time to time could cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities and expenses and harm our business, results of operations and financial condition.
Our pricing decisions, including the introduction of AI credits, may fail to generate expected results and may adversely affect our ability to attract new users and retain existing users.
We have from time to time changed the pricing of our premium subscriptions and certain business solutions, and may do so in the future. As part of our evolving pricing strategy, we may incorporate the use of prepaid AI usage units, known as AI credits, which limit usage of certain AI-powered features or services offered by the platforms we operate to the amounts of AI credits purchased by the user. Under the currently proposed pricing structure we reserve the right to change the number of AI tools and features, as well as the number of AI credits required for any feature (for instance, based on the underlying computational resources, third-party provider fees, or technical complexity required to fulfill a request). Once consumed, AI credits are non-refundable, regardless of whether the output contains errors, inaccuracies, omissions, bugs, hallucinations, interruptions, failures, or does not otherwise meets user expectations. The introduction of AI credits may also add complexity and uncertainty to our pricing structure, potentially leading to user confusion, dissatisfaction, or increased costs, and no assurance can be given that any new pricing model, price points, or the introduction of AI credits will be optimal.
As a result, changes in our price points, pricing model, or the structure or perceived value of AI credits could result in a loss of existing users, and could also negatively affect the willingness of new users to purchase our products and services, and may create negative perceptions about our offerings.
Regulatory requirements or price controls in certain jurisdictions may restrict our ability to adjust prices. In addition, as competitors introduce new solutions, and as AI is more widely adopted in our industry, we may be unable to attract new users at the price or based on the pricing models we currently use, and we may be required to reduce prices or make ongoing adjustments in response to to competitive pressures. Alternatively, as the computing costs of AI remain elevated, we may need to further adjust our pricing model and the use of AI credits, to offset these costs. As a result, our pricing decisions may result in increased payment processing chargebacks, loss of market share and adversely affect our revenue, gross profit, profitability, financial position and cash flows. We also must determine the appropriate price to enable us to effectively compete internationally. Any of these developments could negatively impact our business, financial condition and results of operations.
Our business is subject to the risks of pandemics, natural disasters, and other catastrophic events, whether due to climate change or otherwise.
Our business operations are subject to interruption by various events beyond our control. Significant natural disasters, such as an earthquake, fire, hurricane or flood, or other unusual or prolonged adverse weather patterns, whether due to climate change or otherwise, public health epidemics or pandemics such as COVID-19 and its variants, political unrest, terrorism, cyber-attacks, supply chain disruptions, geopolitical instability, and other events beyond our control may cause damage or disruption to our operations, to international commerce, and to the global economy, and could have a material adverse impact on our business, operating results and financial condition. Our partners, suppliers, and users are also subject to the risk of catastrophic events. If our business continuity and disaster recovery arrangements prove to be inadequate, our services could be interrupted. In those events, our ability to deliver our services in a timely manner, as well as the demand for our services, may be adversely impacted by factors outside our control.
Risks Related to Our Market and Competitive Landscape
If we fail to develop and introduce new products and services, or maintain or enhance existing products and services - including those provided through us by third parties that are significant to our registered users as well as our partners, or if we fail to keep up with rapid changes in design and technology, our business may be materially adversely affected.
The markets in which we compete are characterized by constant change and innovation, and we expect them to continue to evolve rapidly. Our success has been based on our ability to identify and anticipate the needs of our users and develop products that provide them with the tools they need to operate their businesses. Our future success in attracting new users, including those who create on their own, and those newer demographics of users, such as partners and enterprise users, and increasing our premium subscriptions and the revenue we generate from each subscription, will depend on our ability to improve the look, quality, functionality, performance, security, design and reliability of the variety of solutions and services we offer, including our integrated third-party business solutions, and other solutions we offer such as our Base44 offering, and suit them to the needs of our targeted users.
We invest significant time and effort in the research and development of new and upgraded solutions and service offerings to serve our users, including the development of vertical solutions for specific business segments, mobile applications and solutions, commerce solutions, various design elements, such as customized colors, fonts, content and other features, including through Wix Studio, our responsive editor geared towards design professionals. We have also made, and continue to make investments in a multitude of AI initiatives to enable users to build and get online faster and easier as well as improve the overall user experience. These initiatives include AI-driven text and code generation, image generation, design and layout capabilities, additional assistants, including those using voice, and analytic features. In June of 2025, we acquired Base44 which further enhanced our overall AI offering by providing users and partners the ability to create web applications using vibe coding, an intent driven way to build web applications, where users describe the desired experience in natural language and our AI generates and maintains the underlying code. Market acceptance of these and other AI Technologies remains uncertain, and our investments may not prove commercially viable or yield adequate returns. Development, testing, deployment and maintenance of AI Technologies may require significant resources and increase operating costs, with no guarantee of success.
Our product research and development efforts also extend to products, features, applications, and integrations required by our partners and enterprise users, to be able to address their needs and the needs of their customers, including back-office and administrative capabilities.
It can take our design team and developers months to update, code and test new and upgraded solutions and services and integrate them into our platform. Furthermore, the introduction of these new and upgraded design features, solutions and services also involves a significant amount of marketing spending.
We may fail to accurately predict or respond to the changing needs of our users, such as the need for expanded online and offline commerce tools, or for emerging technological trends, such as AI based solutions. Conversely, we may overestimate the impact or adoption rate of certain technologies, including AI based solutions, leading to misallocated resources. We also need to ensure the continued collaboration with certain third-party products and services that are included in our offering and are significant to our customers, such as Google Workspace, which allows our users to create a personalized Gmail email address using their domain name.
If we are unable to successfully enhance our existing products to meet evolving user and partner requirements and increase adoption and usage of our products and third-party products, if we are unable to maintain existing products provided to us by third parties that are significant to our users, if we are unable to incorporate AI into our offerings, if our efforts to increase the usage of our products are more expensive, in part due to increased AI costs, or require more development time than we expect, or if our solutions are not innovative or advanced enough or fail to achieve widespread acceptance, users and potential users may adopt the products and services of our competitors, and our revenue and competitive position could be materially adversely affected.
We depend on highly skilled personnel to enhance our product and grow our business, and if we are unable to hire, integrate and retain our personnel, we may not be able to address competitive challenges and continue our growth.
Our future success and ability to maintain effective growth will depend upon our continued ability to hire, integrate and retain highly skilled personnel, including senior management, engineers, designers, developers, and product managers. In addition to hiring and integrating new highly skilled employees, we must continue to focus on retaining our best employees who foster and promote our innovative corporate culture.
In order to remain competitive, we must continue to develop new solutions, applications and enhancements to our existing platform, which require us to compete with many other companies for software developers with high levels of experience in designing, developing and managing cloud-based software, and AI Technologies. Additionally, the availability of hybrid or remote working arrangements within our industry has further expanded the pool of companies that can compete for our employees and employment candidates. Our principal research and development activities are conducted from our headquarters in Tel Aviv, Israel, and we face significant competition for suitably skilled developers in this region, in particular given the growing number of local companies that are expanding their development activities, and the growing number of multinational corporations establishing a presence in Israel. Finally, as AI becomes more prevalent in our industry, our employees with expertise in AI Technologies may be increasingly targeted by competitors seeking to build their own AI capabilities.
We also engage developers in Ukraine, Lithuania, Germany and Poland to benefit from the significant pool of talent that is more readily available in each of those markets. Due to the war initiated by Russia against Ukraine, many of our Ukrainian team relocated to countries outside of Ukraine or to different locations within Ukraine without certainty regarding their ability to continue residing in such new locations. As a result, those relocated team members may be required to relocate again to other countries, and we may be unable to retain them.
Many larger companies expend considerably greater amounts on employee recruitment than we do, and may be able to offer more favorable compensation and incentive packages than we do. If we cannot attract or retain sufficient skilled research and development professionals in our existing locations or in new locations, our business, prospects and results of operations could be materially adversely affected. We have also experienced, and increasingly expect to experience, a competitive hiring environment for highly-skilled talent in additional locations in which we operate.
Moreover, if we lose the services of any of our key personnel and fail to manage a smooth transition to new personnel, our business could suffer. Key personnel may further solicit other team members to leave with them, and our business could suffer from an additional loss of talent. We have entered into employment and services agreements with our executive officers and key employees that contain non-compete covenants. Despite these agreements, we may not be able to retain these officers and employees. If we cannot enforce the non-compete covenants, we may be unable to prevent our competitors from benefiting from the expertise of our former employees or prevent our employees from establishing their own competing ventures, either of which could materially adversely affect our business and results of operations. To the extent we hire personnel who were previously employed by our competitors or acquisition targets, we may be subject to allegations that they have been improperly solicited or that they divulged proprietary or other confidential information.
We invest significant amounts of cash and equity to attract and retain employees, and we may never realize returns on those investments. While we intend to grant restricted share units, performance share units or other equity awards as key components of our overall compensation and employee attraction and retention efforts, we are required under U.S. GAAP to recognize compensation expense in our operating results for employee share-based compensation under our equity grant programs which may increase the pressure to limit share-based compensation, coupled with pressures from institutional shareholder proxy advisors to limit share-based compensation in order to decrease overall dilution overhang rates. Additionally, any decline in the price of our ordinary shares (directly or relative to the stock price of other companies with which we compete for talent) may adversely impact our ability to retain existing employees or to attract new employees.
In addition, due to the high profile of our company, our employees may be increasingly targeted for recruitment by competitors and other companies in the technology industry, which may make it more difficult for us to retain employees and/or increase retention costs.
If we are unable to attract a diversified customer base, such as partners, mid-size, large and enterprise-level companies, design professionals and tech-savvy users, for which we have developed and effectively integrated more customized solutions and applications, our business, growth prospects and operating results could be adversely affected.
Our business has been, and continues to be, focused in the past few years on serving users who are considering starting a business, as well as small or medium-sized businesses and ventures that are up and running but need help growing and expanding their digital capabilities. In addition, in more recent years, our business also focused on additional user demographics with whom we have less experience selling to, such as partners, as well as mid-size, large and enterprise-level companies for which we are developing new features and applications, such as back office functionality required to serve their customers’ needs or their own needs, and manage a large volume of premium subscriptions and business solutions.
You should consider our future prospects in light of the challenges we may experience when selling our solutions to these additional user demographics, including our relatively short history of marketing and selling to partners, longer sales cycles, delayed execution of our product integration model following successful sale transactions, challenges in selling to potential users in highly regulated industries, and, in certain cases, our ability to migrate users of such customers to our platform. Furthermore, some potential partners may have existing relationships with our competitors or may offer competing solutions themselves, which can limit their willingness to promote our solutions.
Some of our products are suited for more technically skilled users or web developers, such as Wix Studio, our website creation platform that offers advanced design and layout capabilities specifically targeted at design professionals. If we are unable to increase sales of our products intended for partners (including through partners’ revenue sharing agreements), mid-size, large and enterprise-level companies, tech-savvy users, or other customer segments we may target, and adapt our products to their needs, our estimated total addressable market may be overstated and our business, growth prospects and operating results may be adversely affected.
We may face increased competition in a highly competitive market.
While there are other providers who offer features similar to those found in our solutions, we believe that we do not compete with traditional web development firms as we focus not only on web development but also on quality, creativity, technology, design and complementary business solutions. Nevertheless, we do compete with aspects of the services provided by web-based website design platforms and software programs, as well as some of the service offerings of a number of template-based web builder companies and designers and large service companies who offer online commerce capabilities, domain registration and hosting services, and provide the ability for businesses, organizations, professionals and individuals to build a website using their tools or to have one built by their workforce. Newly emerging generative AI solutions, including platforms that facilitate "vibe coding" or similar highly intuitive, low-code/no-code, or AI-driven development methods, could potentially replace or significantly reduce the demand for our traditional Wix product.
Specifically, AI Technologies are rapidly evolving and enabling a faster software development life cycles; and our competitors are increasing the use of these technologies. Our competitors may integrate AI into their products more efficiently, successfully, cost-effectively, or quickly than we are able to, which could harm our ability to compete effectively and have a negative impact on our results and operations. In addition, some of our users and partners may also seek to build their own solutions through the use of advanced AI tools. If users increasingly rely on third-party AI platforms or other competing services, including those that offer automated or natural-language-driven website creation and hosting capabilities, demand for our website building tools, hosting products, domain names or related services could decline or pricing pressure could increase, which could materially and adversely affect our business. The widespread acceptance of any alternative AI-powered systems could eliminate the need to establish an online presence and could materially and adversely affect our business. Our ability to successfully develop and integrate AI Technologies into our products will partially depend on our ability to attract and retain employees with appropriate expertise in AI Technologies, and hence we also expect competition for AI-related talent and expertise.
Additionally, we may face competition from other companies that offer solutions that are competitive with the features offered within our business solutions, such as email service providers, payment facilitators, customer service platforms, and logo designers. Similarly, we may face competition in other solutions we offer, such as Base44, which offers users the ability to deploy “vibe-code” technology and build sophisticated web applications. Furthermore, it is possible that other providers may in the future decide that offering a comprehensive platform similar to our platform represents an attractive business opportunity. In particular, if a more established company were to target our market, we may face significant competition from a company that enjoys potential competitive advantages, such as greater name recognition, a longer operating history, ability to acquire synergetic companies, more extensive commercial relationships in certain jurisdictions, substantially greater market share, larger existing user bases and substantially greater financial, technical and other resources. Such a competitor may use these advantages to offer solutions and services similar to ours at a lower price, develop different or niche solutions to compete with our current solutions and respond more quickly and effectively than we do to new or changing opportunities, technologies, standards or client requirements. We may also face competition from companies that offer their products and services to enterprise-level companies and web design agencies and development professionals, like our partners, who create a web presence for their own customers. Increased competition could result in us failing to attract users and sell premium subscriptions or business solutions, including through our partners, at the rate we expect, or maintain or increase our revenue from such premium subscribers. It could also cause us to have higher acquisition costs or force us to lower our prices or take other steps that may materially adversely impact our results of operations.
If we do not or cannot maintain the compatibility of our platform and solutions with changes and developments in third-party applications, or if the third-party applications that we offer fail to keep pace with competitors’ offerings, the demand for our solutions and platform could decline.
The attractiveness of our platform depends, in part, on our ability to integrate third-party applications and services which our users desire, into their websites and applications, or develop and offer those applications independently. Third-party application providers may change the features of their applications, increase their pricing, or alter the terms governing the use of their applications in an adverse manner. Further, third-party application providers may discontinue their engagement with us, or refuse to partner with us, discontinue support, or limit or restrict our access to their applications and platforms. Such changes could functionally limit or terminate our ability to use these third-party applications with our platform, which could negatively impact our offerings and harm our business. Additionally, competitors may offer functionality which our users desire, that is better than the functionality of third-party applications or integrated solutions in our platform. If we fail to integrate our platform with new third-party applications that our users need for their websites and applications or develop them independently, we may not be able to offer the functionality that our users expect, which could harm our business.
Our business and prospects would be harmed if changes to technologies used in our solutions or new versions or upgrades of operating systems and Internet browsers adversely impact the process by which registered users interface with our platform.
The user interface for our platform is relatively simple and straightforward, which we believe has helped us to expand our user base even among users with little technical expertise. In the future, providers of Internet browsers, operating systems, mobile devices, and other technologies could introduce new features that would make it difficult to use our platform. Internet browsers for desktop or mobile devices could introduce new features, or change existing browser specifications or terms of use such that they would be incompatible with our products and solutions, or prevent end users from accessing our registered users’ sites. For example, major Internet browsers, such as Firefox, Microsoft Edge, Google Chrome or Safari, could become unstable or incompatible with HTML5-based products and solutions. Similarly, any new features introduced by operating system providers, such as Google or Apple, could adversely impact the use of our platform via our mobile application. Any changes to technologies used in our solutions, including within operating systems or Internet browsers that make it difficult for users to access our mobile application or our platform as a whole, or their users to access our registered users’ sites, may slow the growth of our user base, increase operational costs, and materially adversely impact our business and prospects.
Our business will suffer if we fail to effectively acquire and service small business users.
A significant portion of our premium subscriptions are from small businesses. Small businesses frequently have limited budgets and may choose to allocate resources to items other than our solutions, may be more inclined to switch to competing solutions, or may be more sensitive to price increases, especially in times of global macroeconomic uncertainty or recessions, which can have associated effects, including impacts from declines in consumer spending, international trade risks and/or imposition of trade protection measures (such as the imposition of or an increase in tariffs which would effect the amount of commerce on our platform), supply chain challenges and shortages which may impact shipping and fulfillment, high levels of inflation, illiquidity of banking systems, and increased interest rates, which may have a long-term impact on the global economy. We believe that the small business market is underserved, and we intend to continue to devote substantial resources to it, including through our partners who sell directly to their customers, some of which are small businesses. We aim to grow our revenues by adding new small business customers, selling additional business solutions to existing small business customers and retaining them on a long-term basis. If the small business market is affected by the turbulence of macroeconomic environments, if our efforts to grow sales through our partners draws attention and resources from our focus on the small business market we cater to, or if we are unable to market and sell our services to small businesses effectively, directly or through our partners, our ability to grow our revenues quickly and become profitable will be harmed.
Risks Related to Privacy, Data and Cybersecurity
We and our third-party providers are exposed to cybersecurity risks and incidents, which may result in damage to our brand and reputation, material financial penalties, and legal liability, which could in turn materially adversely affect our business, results of operations, and financial condition.
We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, “IT Systems”). We own and manage some of these IT Systems but also rely on third parties for a range of IT Systems and related products and services, including but not limited to cloud computing services.
Due to the nature of our business, our IT Systems and the IT Systems of our third-party providers, including cloud providers, which we rely on, collect, maintain, store, and process large amounts of data. This data includes personal data relating to our personnel, job candidates, users and their visitors and customers (which we refer to as our users of users), such as email addresses, geo-location, usage data, business data, passwords, health information, and also billing information, such as credit card numbers, full names, billing addresses, phone numbers, and additional information, all of which may be, or may be perceived to be, sensitive or confidential (collectively, “personal data”), along with proprietary and confidential business data relating to our company and our users (together with personal data, “Confidential Information”). Third-party services available on our platform may also collect such Confidential Information and share it with us.
We face evolving cybersecurity risks that threaten the confidentiality, integrity, and availability of our IT Systems and Confidential Information, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing (including voice phishing), malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of malicious code embedded in open-source software, bugs, misconfigurations or other exploited vulnerabilities in our (or our suppliers’ or service providers’) IT Systems, products, services, software or hardware. Further, any integration of AI in our or any third party’s operations, products or services is expected to pose new or unknown cybersecurity risks and challenges. In addition, novel non-standard or unverified development practices, such as "vibe coding," could inadvertently introduce new, undetected security vulnerabilities into our platform. We have acquired and continue to acquire companies, such as Base44, that may have IT Systems that contain cybersecurity vulnerabilities and/or may have unsophisticated security measures, which expose us to significant cybersecurity, operational, and financial risks. Given the complexity of our systems, software and services, and despite the scanning tools that we deploy across our networks, infrastructure and products, we may not identify, mitigate, or remediate all security vulnerabilities, or apply patches, before they are exploited by a threat actor.
In addition, as part of our product strategy, we have partially become an open platform, which may increase access of third parties to information and data available on our platform, or increase the scope of third parties who are integrated with our platform through our App Market. As a result, we face risks of external or internal unauthorized access or leaks of user information, which may result in legal claims or proceedings (such as class actions) and negative reputational impacts that cause us to lose existing or future customers.
Although we have implemented cybersecurity standards and controls, operating rules and certification requirements, including in accordance with PCI DSS and Systems and Organization Controls 2 (“SOC2”), we cannot be sure that the steps that we have taken to protect the security, availability, integrity and confidentiality of the Confidential Information we, or our users, collect, store, or transmit, will succeed in preventing inadvertent or unauthorized use or disclosure of Confidential Information. There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information. Payments by Wix, for example, requires and is based on integrations with third-party vendors, service providers and payment gateways, and depends on the efficacy of secure transmission protocols and related technologies. There can be no assurance that the data security standards we have implemented, including for the collection and transmission of credit card and other payment information, or those of our third-party service providers, will adequately comply with the security standards of any jurisdiction in which we seek to market our solution.
Furthermore, like many online and other companies, we and certain of our third-party Providers have experienced, and may experience in the future, cyberattacks and security incidents, as well as attempts by third parties to circumvent the security of our systems. We have experienced, and expect to continue to experience, attempts by hackers to penetrate our internal network and hosted servers. Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated in using various tools and techniques, including leveraging technologies such as AI that can circumvent security controls, evade detection, and remove forensic evidence, as well as deploying sophisticated tailored advanced phishing attacks, social engineering, scraping, ransomware, computer malware, viruses, distributed denial-of-service (DDoS) attacks, a technique used by hackers to take an internet service offline by overloading its servers, and other exploitation of known and unknown vulnerabilities. As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our IT Systems, Confidential Information or business. Moreover, retaliatory acts by Russia in response to economic sanctions or other measures taken by the international community against Russia arising from the Russian military invasion of Ukraine could include an increased number or severity of cyberattacks from Russia or its allies. Similarly, as a result of hostilities between Israel and its neighboring countries and regions, we may be increasingly targeted by malicious actors seeking to sabotage our cyber environment. The scale of some of these attacks against us in the past has caused us and some of our registered user websites to experience intermittent downtime. Although to date none of these incidents have had a material impact on our operations or financial results, there can be no assurance that any future attempts or incidents may not be material.
In addition, risks of internal leaks from our employees or other insiders, whether due to human error or malice, or acts of sabotage, exist, and we may not have adequate internal controls to properly monitor and prevent such leaks. We may not be successful in identifying, blocking or otherwise preventing access to our IT Systems or Confidential Information, despite our security measures. Since techniques used to obtain unauthorized access change frequently, including newer strains of malware, and ransomware, as well as attacks generated by bad actors supported by foreign governments, we may be unable to anticipate these techniques or to implement adequate preventative measures. Furthermore, given that attackers are increasingly using tools that circumvent controls and obfuscate forensic evidence, we may be unable to promptly detect, investigate, remediate or recover from a future attack or incident or avoid material adverse impact to our IT Systems, Confidential Information or business.
Because we make extensive use of a supply chain of third-party suppliers and service providers, such as cloud services that support our internal and customer-facing operations, successful cyberattacks that disrupt the supply chain or result in unauthorized access to third-party systems, and which may be difficult to detect, can materially impact our operations and financial results. Additionally, our products and services are integrated with our customers’ systems and processes, and any circumvention or failure of our cybersecurity defenses or measures in relation to such systems and processes could compromise the confidentiality, integrity, and availability of our customers’ proprietary or other sensitive information. We also rely on outside parties to provide physical security for our facilities, including data centers, and any physical breach of security could result in unauthorized access or damage to our systems.
If our security measures are, or are perceived to be, breached, whether because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our software are exposed, exploited or abused in any way, and as a result, an unauthorized party disrupts our operations, or accesses any of our Confidential Information, users’ data or the data of their users, or otherwise gains control of our platform, or if it is perceived that any unauthorized access has occurred (such as when users utilize weak passwords or their credentials are disclosed, stolen or lost), our brand may be negatively impacted, we may be unable to acquire new users, our relationships with our users may be damaged, our registered users may choose to discontinue their premium subscriptions, we could incur increased costs of incident responses, system restoration, remediation and compliance, or other liability and could be subject to regulatory investigations, fines and litigation (including class action lawsuits); any of which may negatively impact our business, operating results or financial performance, and/or result in a decline of our share price. Even if such a data breach affects a competitor and does not arise out of our actions or inactions, the resulting concern about using our platform could negatively affect our business.
We are also subject to federal, state, provincial and foreign laws regarding cybersecurity and the protection of our systems and Confidential Information. Many jurisdictions have enacted laws requiring companies to notify individuals (and regulators) of data breaches or cybersecurity incidents involving certain types of personal data, and, in addition, our agreements with certain of our providers require us to notify them in the event of a security incident. The Network and Information Systems Directive II, or NIS2, came into force in January 2023 and aims to improve the cyber security and resilience capability of organizations that contribute towards critical national infrastructure by imposing obligations including cybersecurity risk management, incident reporting, management responsibilities and registration requirements on in-scope entities.
EU Member States were required to adopt NIS2 into national law by October 17, 2024. National laws implementing NIS2 may require us to modify our cybersecurity practices and policies, and we could incur substantial costs as a result, and incur additional liabilities for non-compliance. These, and other mandatory disclosures, including SEC required disclosures, regarding a cybersecurity incident may lead to negative publicity and may cause our investors, registered users or providers to lose confidence in the effectiveness of our cybersecurity measures. We could be required to devote significant resources to investigate and address a security incident. Additionally, some jurisdictions, as well as our contracts with certain providers, require us to use industry-standard or reasonable measures to safeguard Confidential Information, and failure to comply with such safeguards and measures may cause harm to our operations. With respect to Wix Payments, our integrated payment processing solution, and the increased storage of Confidential Information, a violation of data privacy or security laws or contractual clauses, many of which focus on financial and payment information, could lead to reputational harm, loss of business, legal action (including class action litigation) and/or regulatory inquiries, resulting in monetary liability, other penalties or other consequences that could negatively impact our reputation and adversely affect our operating results and financial condition.
Any adverse impact to the availability, integrity or confidentiality of our IT Systems or Confidential Information can result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future customers, and/or significant incident response, system restoration or remediation and future compliance costs. Any or all of the foregoing could materially adversely affect our business, operating results, and financial condition. For example, if our data security measures fail to adequately protect IT Systems or Confidential Information, we could be liable to both our users and their users for any related losses (such as fraudulent credit card transactions), as well as certain of our providers under our contractual agreements, including fines and higher transaction fees. Additionally, we could face regulatory action or face litigation, and our users and providers could terminate or materially change their relationships with us, any of which could harm our business, results of operations or financial condition. There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from any such liabilities or damages with respect to any particular data related claim. Our existing general liability insurance coverage and coverage for errors and omissions may not continue to be available on acceptable terms or at all in the future or may not be available in sufficient amounts to cover one or more large data related claims. The insurer may also exclude certain data related events from coverage, or deny coverage for any future data related claim. The successful assertion of one or more large data related claims against us that exceeds our available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, financial condition and results of operations.
We are subject to data privacy and data protection laws and regulations, as well as our contractual data privacy and security obligations to third parties and to our users and their users, and failure by us or our vendors to comply with any of these regulations or obligations may result in significant liability, negative publicity, and/or an erosion of trust, which could materially adversely affect our business, results of operations, and financial condition.
We are subject to data privacy and security laws and regulations adopted in Israel, Europe, the U.S., Australia, Brazil, and other jurisdictions. In recent years, there has been an increase in attention to, and regulation of, data privacy across the globe, including in the U.S.
EU and UK
For countries that are part of the European Economic Area (EEA), we are subject to the General Data Protection Regulation, or GDPR, and in the United Kingdom to the UK General Data Protection Regulation, or UK GDPR, which include stringent obligations in relation to our collection, control, processing, sharing, disclosure and other use of data relating to an identifiable living individual. These regimes impose comprehensive data privacy compliance requirements, including detailed disclosures about how personal data is collected and processed, procedures to ensure that appropriate legal bases are in place to justify data processing activities, particularly when processing sensitive personal data, compliance with rights for data subjects in regard to their personal data, ensuring appropriate safeguards are in place where personal data is transferred out of the EEA and the UK to certain jurisdictions, notification to data protection regulators (and in certain cases, affected individuals) of certain personal data breaches, requirements to include certain obligations in contracts, and compliance with the principle of accountability and the obligation to demonstrate compliance through policies, procedures, trainings and audit procedures.
The GDPR and UK GDPR also include significant penalties for failure to comply; among others, a fine up to €20 million/£17.5 million or up to 4% of the annual worldwide turnover, whichever is greater, can be imposed under each regime. Since we are under the supervision of relevant data protection authorities in both the EEA and the UK, we may be fined under both the GDPR and UK GDPR for the same breach. Such penalties are in addition to any civil litigation claims (including class actions) for compensation or damages, and any orders to cease/change our processing of personal data or other enforcement orders, and reputational damage.
The GDPR and UK GDPR also regulate cross-border transfers of personal data out of the EEA and the UK, respectively. Decisions from the Court of Justice of the European Union and regulatory guidance from regulators in the EEA and UK, have created complexity and uncertainty regarding certain transfers. We transfer EEA and UK personal data outside of the EEA and UK, including to Israel, which benefits from an adequacy decision from the EEA and UK authorities; review and variation of existing adequacy decisions could require us to take additional steps to comply with GDPR and UK GDPR requirements for certain transfers. Non-compliance with laws on data transfers could lead us to suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our products, and the geographical location or segregation of our relevant systems and operations, and could adversely affect our business, financial condition and results of operation.
Additionally, other countries outside of the EEA have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of delivering our solutions and operating our business in these countries.
In addition, we are subject to evolving European Union and UK privacy laws on cookies, web beacons and similar tracking technologies, and e-marketing. In the EU and UK, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem. As regulators, activists, consumer protection organizations and third parties increasingly enforce the strict approach in recent guidance, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, and subject us to additional liabilities. Regulation of cookies and similar technologies, and any decline of or limitations to cookies or similar online tracking technologies as a means to identify and potentially target individuals, may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to better know our users.
United States
In the United States, there are a number of federal laws that impose limits on or requirements regarding the collection, distribution, use, security and storage of personal data of individuals. For example, in the United States, the Federal Trade Commission and state regulators enforce a variety of data privacy issues, such as promises made in privacy policies or failures to appropriately protect information about individuals, as unfair or deceptive acts or practices in or affecting commerce in violation of the Federal Trade Commission Act or similar state laws.
In addition, in the United States at the state level, we are subject to a number of data privacy and security laws and regulations, including but not limited to the California Consumer Privacy Act (“CCPA”), which provides data privacy rights for California residents and imposes operational, privacy and security requirements on covered companies. The CCPA imposes fines, and creates a private right of action in relation to certain data security breaches. Following the enactment of the CCPA, comprehensive privacy statutes that share similarities with the CCPA are now in effect and enforceable in numerous other states.
Additionally, we may be considered a “business associate” under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and regulations implemented thereunder (collectively, “HIPAA”) in limited circumstances, such as when a healthcare customer enables HIPAA-related features of our platform and enters into a business associate agreement with us. In such circumstances, we may be subject to HIPAA’s privacy, security and breach notification obligations in connection with receiving or otherwise processing individually identifiable health information (“protected health information,” or “PHI”) for or on behalf of covered entities and their covered subcontractors. HIPAA also authorizes state Attorneys General to file suit on behalf of their residents. Courts may award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
Any failure or perceived failure by us to comply with these laws could result in proceedings or actions against us. All of these state laws and others that are being produced or enacted, may require us to modify our data practices and policies and to incur substantial costs, effort and expenses in order to comply. In addition, the enactment of these state laws could have potentially conflicting requirements that could make compliance challenging and costly.
Israel
In addition, we are also subject to the Israeli Privacy Protection Law 5741-1981 (“PPL”), and its regulations, including the Israeli Privacy Protection Regulations (Data Security) 2017 (“Data Security Regulations”), which came into effect in Israel in May 2018 and impose obligations with respect to the manner certain personal data is processed, maintained, transferred, disclosed, accessed, and secured, as well as the guidelines of the Israeli Privacy Protection Authority (“IPPA”). In this respect, material changes to the Data Security Regulations may require us to adjust our data protection and data security practices, information and other technical and organizational security measures, certain organizational procedures and supervisory roles. Failure to comply with the PPL, its regulations, and guidelines issued by the IPPA may expose us to administrative fines, enforcement actions, civil claims (including class actions), and in certain cases criminal liability, and compel us to take certain remedial actions to rectify any irregularities, which may increase our costs. Amendment 13 of the PPL, which entered into effect in August 2025, significantly increased monetary sanctions that in certain cases may reach millions of NIS, for breaching the PPL and expanded the IPPA’s investigation and enforcement authority. The IPPA may initiate administrative inspection proceedings, from time to time, without any suspicion of any particular breach of the PPL, as it has done in the past with respect to dozens of Israeli companies in various business sectors.
Complex, numerous, rapidly evolving laws relating to data privacy and security are often inconsistent and may be subject to amendment or re-interpretation and may be implemented in a non-uniform way in many jurisdictions around the world, and we may not be aware of every development that impacts our business. For instance, different data protection authorities in the EU have published guidelines regarding the correct usage of cookies and similar technologies; such guidelines are not always consistent in their interpretation and application of relevant laws. This may cause us to incur significant costs and expend significant effort to ensure compliance. Due to the accessibility of our services worldwide, certain foreign jurisdictions may claim that we are required to comply with their privacy or data protection laws even in jurisdictions where we have no local entity, employees or infrastructure.
Where the local data privacy laws of a jurisdiction apply, we may be required to register our operations in that jurisdiction or make changes to our business so that registered users’ data or the data of their users that we collect, process and/or store is only collected, processed and/or stored in accordance with applicable local law. Some of these laws include strict localization provisions that require certain data to be stored within a particular region or jurisdiction. We strive to comply with all applicable laws, regulations, policies and legal obligations, as well as with certain industry standards relating to data privacy and security. We have certain data privacy and security-related obligations to our registered users based on our privacy policy and terms of use, and we may be contractually liable to third parties in the event we are deemed to have wrongfully processed personal data.
A failure by us or a third-party contractor providing services to us to comply with applicable data privacy and security laws, regulations, self-regulatory requirements or industry guidelines, or our terms of use with our users, may result in sanctions, statutory or contractual damages or litigation (including class actions) and may subject us to reputational harm. This failure may be amplified as we continue to utilize and implement different types of technology, such as AI, and as we have become a more open platform.
These circumstances could force us to spend money in defense or settlement costs, result in the imposition of monetary liability, restrict or block access to our services from a certain territory, incur additional management resources, increase our costs of doing business, and adversely affect our reputation and the demand for our solutions. Government agencies and regulators continually review the data privacy and data security practices of online internet companies, including their data privacy and data security policies and processes. The possible outcome of such reviews may result in changes to our products and policies. If we are unable to comply with any such reviews or decrees that result in recommendations or binding changes, or if the recommended changes result in the degradation of our products, our business could be harmed. Governmental agencies may also request or take registered user data for national security or informational purposes, and can also make data requests in connection with criminal or civil investigations or other matters, which could harm our reputation and our business.
Data privacy and protection laws and regulations could limit the use and adoption of our services, limit the user data we process for our marketing activities and adversely affect our business.
Data privacy laws which restrict our storage, use, processing, disclosure, and transfer of personal data may require us to maintain an online privacy policy and terms of use that disclose our practices regarding the collection, processing, and disclosure of personal data. This may cause our users to resist providing the personal data necessary to allow them to use our platform effectively and their users may also resist providing personal data to our users due to data privacy and security concerns and could lead to the loss of current or prospective users or other business relationships. Additionally, the GDPR, UK GDPR, the CCPA and expanding “Do Not Sell” requirements or regulations, and other privacy laws and regulations restricting the use of personal data for advertising, and other legal and regulatory changes are making it easier for individuals to opt-out of having their personal data collected through an opt-out button, and to choose whether or not to be tracked online, which could result in higher rates of opting out, requests for data deletion, or prevention of our online tracking which can impact our operation and decrease the demand for our products and services.
In addition, we may also become subject to new laws that regulate non-personal information. For example, the European Union’s Data Act (EU Data Act) imposes certain data and cloud service interoperability and switching obligations to enable users to switch between cloud service providers without undue delay or cost. Depending on how the EU Data Act and any similar laws are implemented, interpreted and enforced, we may have to adapt our business practices, contractual arrangements, and services in the EEA to comply with such obligations, which could impact our regional revenue and results of operations.
We have implemented certain measures to protect personal data, including personal data of our users of users, but as described above, these measures may not adequately address all potential data privacy concerns and security threats and may fail to meet the expectations of our users, and their users, or other stakeholders, which could thereby reduce the demand for our services.
Risks Related to Our Intellectual Property
We are currently, and have in the past been, subject to claims by third parties of intellectual property infringement and may in the future become subject to similar or other claims that, regardless of merit, could result in litigation and materially adversely affect our business, results of operations or financial condition.
We have experienced, and may continue to experience, third-party assertions that our solutions, services and intellectual property, including those based on AI Technologies, infringe, misappropriate or otherwise violate their intellectual property or other proprietary rights. Such claims, based on trademark, copyright and/or patent infringement, among other claims, may be made directly against us, or against our users or other business partners using our technology, or may be related to technology acquired through mergers and acquisitions, such as the Base44 platform. Additionally, in recent years, non-practicing entities, or NPEs, have begun purchasing or repurposing intellectual property assets for the purpose of making claims of infringement and attempting to extract settlements from companies like ours. We entered into settlement agreements in the past with NPEs and with operating companies with respect to patent infringement claims. We have also licensed patents from third parties in areas that are related to our technology to preempt our protection against future intellectual property infringement claims.
Any such intellectual property claims, regardless of merit, whether resulting in litigation or not, could result in substantial expense (in particular in cases where our liability is not contractually limited) and time spent, divert the attention of management, cause significant delays in introducing new solutions or services (including those that incorporate AI), materially disrupt the conduct of our business and have a material and adverse effect on our brand, reputation, business, financial condition and results of operations. As a consequence of such claims, we could be required to pay substantial damages, develop non-infringing technology, enter into royalty-bearing licensing agreements to obtain the right to use a third party’s intellectual property, stop selling or marketing some or all of our solutions or services or re-brand our solutions or services. Any licensing agreements, if required, may not be available to us on acceptable terms or at all. If it appears necessary, we may seek to license intellectual property that we are alleged to infringe, even if we believe such claims to be without merit. If required licenses cannot be obtained, or if existing licenses are not renewed, litigation could result.
In addition, third parties may assert infringement claims against our users (as well as our partners) relating to our products and solutions. These claims may require us to initiate or defend protracted and costly litigation on behalf of our users, regardless of the merits of these claims. If any of these claims succeed, we may be forced to pay damages on behalf of our users or may be required to obtain licenses for the products they use. If we cannot obtain all necessary licenses on commercially reasonable terms, our users may be forced to stop using our products.
We may be unable to obtain, maintain and protect our intellectual property rights and proprietary information or prevent third parties from making unauthorized use of our technology.
Our intellectual property rights are important to our business. We rely on a combination of patent, trademark, copyright, industrial designs and trade-secret laws, as well as licensing agreements and third-party nondisclosure and assignment agreements to protect our intellectual property and know-how. However, the steps we take to protect our intellectual property may be inadequate. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. Despite our precautions, it may be possible for unauthorized third parties to copy our products and use information that we regard as proprietary to create solutions and services that compete with ours. Because of the differences in foreign trademark, patent and other laws concerning proprietary rights, our intellectual property rights may not receive the same degree of protection in foreign countries as they would in the United States and Israel. Some license provisions protecting against unauthorized use, copying, transfer and disclosure of our solutions may be unenforceable under the laws of certain jurisdictions and foreign countries.
To protect our trade-secrets, know-how and other proprietary information, we enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with parties with whom we have strategic relationships and business alliances and other third parties to whom we may disclose confidential information. No assurance can be given that these agreements will be effective in controlling access to our trade-secrets, know-how, or proprietary information, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in Israel and the United States.
Further, these agreements do not prevent others from independently developing technologies that are substantially equivalent or superior to our solutions. It is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology.
We have filed a number of applications for patents to protect our technologies. While we generally apply for patents in those countries where we intend to make, have made, use, or sell our products, we may not accurately predict all of the countries where patent protection will ultimately be desirable. If we fail to timely file a patent application in any such country, we may be precluded from doing so at a later date. We cannot assure you that our patent applications will be approved or that patents will be granted. We also cannot assure you that the patents issued as a result of our foreign patent applications will have the same scope of coverage as our United States patents.
Many patent applications are maintained in secrecy for a period of time after they are filed, and since publication of discoveries in the scientific or patent literature tends to lag behind actual discoveries by several months, we cannot be certain that we will be the first creator of inventions covered by any patent application we make or that we will be the first to file patent applications on such inventions. There is also a risk that we could adopt a technology without knowledge of a pending patent application, which technology would infringe a third-party patent once that patent is issued.
We rely on our brand and trademarks to identify our solutions to our users and to potential users, and to differentiate our solutions from those of our competitors. While we aim to acquire adequate protection for our brand through trademark registrations in key markets, occasionally, third parties may have already registered or otherwise acquired rights to identical or similar marks for solutions that also address the software market, which could also impede the success of our or our partners’ efforts to market our brand in such markets. If we are unable to adequately protect our trademarks, third parties, including partners, may use brand names or trademarks identical or similar to ours in a manner that may cause confusion to our users or confusion in the market, or dilute our brand names or trademarks, which could decrease the value of our brand. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition, and could require us to devote resources for the advertising and marketing of new brands.
We rely on copyright laws to protect the works of authorship (including software) created by us. We have filed a number of applications to register our copyrights, however, we do not register the copyrights in all of our copyrightable works. Copyrights of U.S. origin must be registered before the copyright owner may bring an infringement suit in the United States. Furthermore, if a copyright of U.S. origin is not registered within three months of publication of the underlying work, the copyright owner is precluded from seeking statutory damages or attorney’s fees in any United States enforcement action, and is limited to seeking actual damages and lost profits. Accordingly, if one of our unregistered copyrights of U.S. origin is infringed by a third party, we will need to register the copyright before we can file an infringement suit in the United States, and our remedies in any such infringement suit may be limited.
Any of our pending or future patent, copyright or trademark applications, whether or not challenged, may not be issued with the scope of the claims we seek, if at all. We are unable to guarantee that additional patents, copyright registrations or trademark registrations will be issued to us from pending or future applications or that, if patents, copyrights or trademarks are issued to us, that they will not be challenged, invalidated or circumvented, or that the rights granted under the patents, registered copyrights or registered trademarks will provide us with meaningful protection or any commercial advantage.
From time to time, we may discover that third parties, including our partners, are infringing, misappropriating or otherwise violating our intellectual property rights. However, policing unauthorized use of our intellectual property and misappropriation of our technology is difficult and expensive, and we may therefore not always be aware of such unauthorized use or misappropriation, or have adequate resources to enforce our intellectual property rights.
Despite our efforts to protect our intellectual property rights, unauthorized third parties may attempt to use, copy or otherwise obtain and market or distribute our intellectual property rights or technology or otherwise develop solutions with the same or similar functionality as our solutions. If competitors infringe, misappropriate or otherwise misuse our intellectual property rights and we are not adequately protected, or if such competitors are able to develop solutions with the same or similar functionality as ours without infringing our intellectual property, our competitive position and results of operations could be harmed and our legal costs could increase.
We may become subject to claims for remuneration or royalties for assigned service invention rights by our contractors or employees, which could result in litigation and adversely affect our business.
We enter into assignment of invention agreements with our employees pursuant to which such individuals agree to assign to us all rights to any inventions created in the scope of their employment or engagement with us. Under the Israeli Patent Law, 1967, or the Patents Law, inventions conceived by an employee or a person deemed to be an employee during the scope of their employment with a company are regarded as “service inventions,” which are owned by the employer, absent a specific agreement between employee and employer giving the employee service invention rights. The Patents Law also provides that in the absence of an agreement between the employer and employee (or a person deemed to be an employee) that prescribes whether, to what extent, and on what conditions the employee is entitled to remuneration for his or her service inventions, the employee is entitled to refer the matter to the Israeli Compensation and Royalties Committee, a body constituted under the Patents Law, which will determine whether the employee is entitled to such remuneration. The Patents Law provides general guidelines for determining this Committee-enforced remuneration, which have not yet been applied by the Committee in its rulings. Although our contractors or employees, in Israel and in the other jurisdictions in which we operate, have agreed to assign to us service invention rights, depending on the jurisdiction and governing body of law, we may face claims challenging the ownership of such invention rights and the validity of the agreements and demanding remuneration in consideration for assigned inventions, and we cannot be certain that our practices are consistent with applicable regulations in our various locations. As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current or former contractors or employees, or be forced to litigate such claims, which could negatively affect our business.
We use open-source software in connection with our proprietary software and solutions, and we may face claims challenging the use of open-source software and/or compliance with open-source license terms.
We use open-source software in connection with our software development or software we purchase within the framework of an acquisition. In the past we have faced claims challenging the use of open-source software and/or compliance with open-source license terms, and we may be subject to such claims in the future. Given the rapid adoption of AI Technologies, which can be used to develop open-source software, the availability and integration of open-source software may increase in the future. Some open-source licenses require users who distribute software containing open-source to make available all or part of such software, which in some circumstances could include valuable proprietary code of the user. The terms of many open-source licenses to which we are subject have not been interpreted by U.S. or foreign courts. As there is little or no legal precedent governing the interpretation of many of the terms of these licenses, the potential impact of these terms on our business is uncertain and may result in unanticipated obligations regarding our solutions and technologies. We cannot provide assurances that our internal policy that restricts certain open-source licenses, ensures that open-source software is not used in a manner that would require us to disclose our proprietary source code or that would otherwise breach the terms of an open-source software license will be entirely effective at preventing the forced disclosure of our proprietary source code or the payment of damages for breach of contract, in particular as our business grows and we face additional challenges in monitoring our compliance with open-source license terms. It is our view that generally there is no distribution of software in connection with the majority of our services, since no download and/or installation of software is necessary to use our services and our editing and design platform is accessible solely through the cloud, and therefore we would not need to make available all or part of our software. Part of our services, such as our mobile application for example, however, are considered a distribution of software. In addition, making Software-as-a-Service products available over a network is also deemed to be software distribution under certain open-source licenses. In those instances, if a specific open-source license requires it, we may be obligated to disclose part of our proprietary code. Any requirement to disclose our proprietary source code or pay damages for breach of contract could be harmful to our business, brand, reputation, results of operations or financial condition, and could help our competitors develop products and services that are similar to or better than ours.
Risks Related to Other Legal, Regulatory and Tax Matters
Our business could be affected by the enactment of new governmental regulations regarding the Internet.
To date, government regulations have not materially restricted the use of the Internet in most parts of the world. The legal and regulatory environment pertaining to the Internet, however, is uncertain and may change. New laws may be passed, courts may issue decisions affecting the Internet, existing but previously inapplicable or unenforced laws may be deemed to apply to the Internet or regulatory agencies may begin to rigorously enforce such formerly unenforced laws, or existing legal safe harbors may be narrowed, both by U.S. federal or state governments and by governments of foreign jurisdictions. These changes could affect:
•the liability of online service providers for actions by customers, including fraud, illegal content, spam, phishing, libel and defamation, hate speech, infringement of third-party intellectual property and other abusive conduct;
•other claims based on the nature and content of Internet materials, including under the DSA;
•user data privacy and security issues;
•consumer protection risks, including those that may place disclosure and consent requirements on automatically renewing subscriptions, and require businesses to simplify the subscription cancellation process for consumers;
•competition laws, including the DMA;
•digital marketing aspects;
•taxation laws;
•our ability to automatically renew the premium subscriptions of our users;
•regulations relating to the use of AI;
•restrictions on the ability to make certain telephone calls or send text messages to mobile telephone numbers;
•child verification and safety issues;
•cross-border e-commerce and online payments issues; and
•ease of accessibility by our users to our platform, including in connection with federal or state governments in the United States, or foreign government bodies or agencies, which have in the past adopted, and may in the future adopt, laws or regulations requiring platforms to enhance their accessibility, and which we may not be fully in compliance with.
We may also become subject to claims, lawsuits (including class action or individual lawsuits), government or regulatory investigations, inquiries or audits, and other proceedings. These claims, lawsuits and proceedings could include labor and employment, wage and hour, commercial, antitrust, alleged securities law violations and other matters. We expect the number of legal disputes may increase as we grow larger, as our business expands in scope and geographic reach, and as our platform and solutions increase in complexity, and we expect we will continue to face additional legal disputes.
We also receive media attention, which could result in increased litigation or other legal or regulatory reviews and proceedings. The adoption of any new laws or regulations, or the application, enforcement, or interpretation of existing laws or regulations to the Internet, could hinder growth in the use of the Internet and online services generally, and decrease acceptance of the Internet and online services as a means of communications, e-commerce and advertising. In addition, such changes in laws could increase our costs of doing business, subject our business to increased liability for non-compliance, subject us to class action lawsuits, or prevent us from delivering our services over the Internet or in specific jurisdictions, thereby materially harming our business and results of operations. We evaluate litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we may establish reserves and/or disclose the relevant litigation claims or legal proceedings, as and when required or appropriate. These assessments and estimates are based on information available to management at the time of such assessment or estimation and involve a significant amount of judgment. As a result, actual outcomes or losses could differ materially from those envisioned by our current assessments and estimates. Our failure to successfully defend or settle any of these litigation claims or legal proceedings could result in liability that, to the extent not covered by our insurance, could have an adverse effect on our business, financial condition, and results of operations.
The development and integration of AI into our offerings may present regulatory and legal, risks, and result in reputational harm, liability, or other adverse consequences to our operations.
The regulatory framework around the development and use of emerging AI Technologies is rapidly evolving, and many federal, state and foreign government bodies and agencies have introduced, and are currently considering, additional laws and regulations related to the development and integration of AI, machine learning, large language models (LLMs), and additional emerging data technologies, including those designed to mitigate or control for bias and discrimination in the context of AI Technologies and machine learning. In the United States, the Trump administration has rescinded and may continue to rescind existing federal orders and/or administrative policies relating to AI Technologies, or may implement new executive orders and/or other rule making relating to AI Technologies in the future. Any such changes at the federal level could require us to expend significant resources to modify our products, services, or operations to ensure compliance or remain competitive. Legislation has also been promulgated on the state level. For example, the California Privacy Protection Agency is in the process of finalizing regulations under the CCPA regarding the use of automated decision making. California also enacted eighteen new laws in 2024 that further regulate the use of AI technologies and provide consumers with additional protections around companies’ use of AI technologies, such as requiring companies to disclose certain uses of generative AI. Other states have also passed AI-focused legislation, such as Colorado’s Artificial Intelligence Act, which will require developers and deployers of “high-risk” AI systems to implement certain safeguards against algorithmic discrimination, and Utah’s Artificial Intelligence Policy Act, which establishes disclosure requirements and accountability measures for the use of generative AI in certain consumer interactions. Such additional regulations may impact our ability to develop, use, procure and commercialize AI technologies in the future.
In Europe, the European Union’s Artificial Intelligence Act (the “EU AI Act”) entered into force in August 2024, establishing a comprehensive, legal framework for the regulation of artificial intelligence systems across the EU. The majority of obligations under the EU AI Act will apply from August 2026. Once fully applicable, the EU AI Act will have a material impact on the way artificial intelligence is regulated in the EU, including requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, general purpose artificial intelligence and foundation models, and introduces significant fines for non-compliance of up to 7% of worldwide annual turnover. In particular, organizations developing or deploying generative AI are required to ensure labelling and transparency of artificially generated content; regulatory guidance and codes of practice on these provisions are in the process of being developed, and the resulting legal uncertainty as these legal obligations continue to develop may require us to incur additional costs and/or adapt our products, services and operations to comply with the EU AI Act. Globally, legal frameworks on AI Technologies are ever-changing and inconsistent across jurisdictions, and we may incur additional expenses and costs associated with complying with such laws and regulations, as well as face heightened potential liability if we are unable to comply with these laws and regulations. The EU AI Act, together with developing guidance and/or decisions in this area, may affect our use of AI Technologies and our ability to provide, improve or commercialize our services, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition.
It is possible that further new laws and regulations will be adopted in the United States and in other non-U.S. jurisdictions, or that existing laws and regulations, including competition and antitrust laws, may be interpreted in ways that would limit our ability to use AI Technologies for our business, or require us to change the way we use AI Technologies in a manner that negatively affects the performance of our business and the way in which we use AI Technologies. We may need to expend resources to continue implementing AI governance and controls, adjust our products or services in certain jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions. Further, the cost to comply with such laws, regulations, or decisions and/or guidance interpreting existing laws, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI Technologies). Such an increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could adversely affect our business, financial condition and results of operations.
Activities of registered users or the content of their websites could render us liable as a provider of online services, damage our reputation and brand, or harm our ability to expand and retain our base of registered users and premium subscriptions, which could adversely affect our business, financial condition and results of operations.
Certain jurisdictions, including the United States and the European Union, have adopted laws relating to the liability of providers of online services for the activities of their users and other third parties, including with respect to defamation, threats or incitement to violence, the sale or purchase of illegal goods, exploitation of minors, terrorist activities, invasion of privacy and other torts, as well as copyright and trademark infringement. These laws include, among others, the Digital Services Act (“DSA”), which govern, our potential liability for illegal conduct or content on our services and may increase our compliance costs, require changes to our processes, operations and business practices and potentially subject us to significant fines if applied in a manner that does not allow to achieve compliance. In particular, we need to respond to take-down requests by users and third-parties, in a manner compliant with the specific requirements of the DSA. Certain actions of registered users that are deemed to be hostile, offensive or inappropriate to other users or to the public, or that are deemed to be infringing a third party’s intellectual property rights, or registered users acting under false or inauthentic identities or using our product to conduct illegal activities, could negatively affect our reputation and brand and impose liability on us. This particularly applies to our registered users who do not have premium subscriptions and who, therefore, maintain the “Wix” logo on their websites. Apart from monitoring selling activities of our users who elect to utilize our Wix Payments processing service and our attempts to scan and remove specific content such as content which may be deemed as child pornography or phishing patterns, we do not regularly monitor the appropriateness of the domain names our users register or the content of our registered users’ websites, and we do not have control over the activities in which our registered users engage. While we have adopted policies regarding illegal, infringing, or offensive use of our services by our registered users and retain authority to terminate domain name registrations and to take down websites that violate these policies, users could nonetheless engage in these activities without our knowledge, in particular if they utilize AI Technologies which could be leveraged to enable such activities at scale. The safeguards we have in place may not be sufficient to avoid liability on our part under applicable laws, including the EU Copyright Directive, the EU Directive on Electronic Commerce 2000/31 (“EU e-Commerce Directive”) and the DSA, or avoid harm to our reputation and brand, especially if such hostile, offensive or inappropriate use or use deemed to be an infringement of intellectual property rights was high profile, as this could adversely affect our ability to expand our registered user base, our business, and financial results.
Furthermore, when users elect to utilize our white-label payment processing service Wix Payments, we may act as a payment facilitator in certain cases. In addition, we are required to monitor our users’ activity to ensure their compliance with certain standards applied by our payment networks and/or our partner payment processors. We may fail to appropriately monitor our users’ activity and be subject to liability.
At present, we do not require that our registered users, apart from those connected to Wix Payments, post on their websites, or require their users to agree to, any terms of service, privacy policy, disclaimer or any other contractual documentation or policy. If our users do not post the appropriate documentation and policies on their websites and require their users’ consent to be bound by the terms of such documentation and policies, or should our users fail to take steps necessary to enjoy the benefits of certain statutory safe harbors, such as those set forth in Section 512 of the United States Digital Millennium Copyright Act and Section 230 of the Communications Act of 1934, as amended by the Communications Decency Act (“CDA”), the EU Copyright Directive, the EU e-Commerce Directive or the DSA, then they may expose themselves to civil and criminal liability under applicable law, for example, where their users post information or content which is libelous, defamatory, in breach of regulation concerning unacceptable content or publications, or in breach of any third-party intellectual property rights, including as a result of output from AI tools, or, for example, where they or their suppliers fail to process personal data in accordance with applicable law. It is possible that we could also be subject to liability in such cases based on certain actions by our users.
Additionally, in May 2025, the U.S. federal government enacted the 'Take It Down Act,' which establishes mandatory takedown procedures for non-consensual intimate images and other specified content. Under the act, online platforms and service providers may be required to respond to verified takedown requests from individuals and remove or restrict access to such content. Failure to comply with these obligations could subject us to civil liability, fines or regulatory enforcement. Moreover, because we do not pre-screen user content, we may face challenges in meeting the compliance timelines or verification obligations set forth in the act, particularly if user content is stored on distributed systems or served via third-party integrations.
Although these statutes and case law in the U.S. and elsewhere have generally shielded us from liability for user activities to date, court rulings in pending or future litigation or future regulatory or legislative amendments may narrow the scope of protection afforded to us under these laws, in particular given the uncertainty of copyright legislation with respect to content generated using AI. The CDA and the case law interpreting it generally provide that domain name registrars and website hosting providers cannot be liable for defamatory or obscene content posted by customers on registrars’ servers unless they participate in creating or developing the content. The Stop Enabling Sex Traffickers Act (SESTA) and Allow States and Victims to Fight Online Sex Trafficking Act of 2017 (FOSTA), which became effective in April 2018, amend certain portions of the CDA, which may limit the immunity previously available to us under the CDA. In the U.S., there have also been, and continue to be, various congressional and executive efforts to remove or restrict the scope of the protections available under Section 230, and courts likewise could narrow the scope of existing liability protections. If such changes occur, our current protections from liability for third-party content in the United States could decrease or change, potentially resulting in increased liability for third-party content and higher litigation costs. Such amendments to or reinterpretations of Section 230 could require significant changes to our products, business practices or operations. Any court ruling or other governmental action that imposes liability on providers of online services for the activities of their users and other third parties could harm our business. In such circumstances, we may also be subject to liability under applicable law in a way which may not be fully mitigated by the user terms of service we require our users to agree to. In addition, comparable legislation in Europe or other jurisdictions may conflict with U.S. statutes and case law, and we may not be able to benefit from safe harbors afforded by applicable law and may, in certain cases, be deemed non-compliant. Any liability attributed to us could adversely affect our brand, reputation, our ability to expand our user base and our financial position. Further, our indemnity from our registered users may also not be deemed valid in all jurisdictions or may not be fully effective as a matter of practice if any user does not have sufficient assets, insurance or other means to back that indemnity. In addition, rising concern about the use of the Internet for illegal conduct, such as the unauthorized dissemination of national security information, money laundering, AI generated deepfakes or supporting terrorist activities may in the future produce legislation or other governmental action that could require changes to our products, solutions or services, restrict or impose additional costs upon the conduct of our business or cause our registered users to abandon material aspects of our service. Any such adverse legal or regulatory developments could substantially harm our operating results and business.
As a domain name registrar, we are required to comply with industry regulations and could face liability from disputes over registration and transfer of domain names.
We are accredited by ICANN as a domain name registrar. ICANN oversees a number of Internet related tasks, including managing the Domain Name System (DNS), the allocation of IP addresses, the accreditation of domain name registrars and registries and the definition and coordination of policy development for all of these functions.
Our ability to offer domain name registration is subject to our ongoing relationship with, and continued accreditation by, ICANN.
Additionally, we continue to face the risks that:
•the terms of the Registrar Accreditation Agreement, or RAA, under which we are accredited as a registrar, could change in ways that are disadvantageous to us or under certain circumstances could be terminated by ICANN, thereby preventing us from operating our registrar service, or ICANN could adopt unilateral changes to the RAA that are unfavorable to us and inconsistent with our current or future plans, or that affect our competitive position;
•international regulatory or governing bodies, such as the International Telecommunications Union, a specialized agency of the United Nations, or the EU, may gain increased influence over the management and regulation of the domain name registration system, leading to increased regulation and oversight; and
•ICANN or any third-party registries may implement policy changes impacting or restricting our ability to operate as a domain name registrar.
Additionally, as a domain name registrar, we may become aware of disputes over ownership or control of user accounts, websites or domain names, and we could face potential liability for our role in the wrongful transfer of control or ownership of accounts, websites or domain names.
We could also face potential liability for our failure to renew a user’s domain. The safeguards and procedures we have adopted may not be successful in protecting us against liability from such claims in the future.
Additionally, following recent Indian court rulings and guidelines, mandatory e-KYC (electronic Know Your Customer) verification is now required for all new and existing domain name registrations in India. Those requirements may add a burden to our domain registration business in India, heightened liability risk, and may make .in domains less attractive to privacy-conscious customers, and create potential for penalties, domain suspensions, or loss of registrar accreditation for non-compliance.
We are subject to trade and economic sanctions and export laws that may govern or restrict our business, and we, and our directors and officers, may be subject to fines or other penalties for non-compliance with those laws.
Some of our business activities may be subject to various restrictions under U.S., Israeli and EU export controls and trade and economic sanctions laws.
U.S. Laws and Regulations
In the United States, we may be subject to U.S. and other export control and trade and economic sanctions laws and regulations, including the Export Administration Regulations, or EAR, administered by the U.S. Department of Commerce’s Bureau of Industry and Security, or BIS, and the various sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or OFAC, or collectively, U.S. Trade Controls. U.S. Trade Controls may prohibit or restrict our ability to, directly or indirectly, conduct activities or dealings in countries or territories that are the target of comprehensive U.S. sanctions, or collectively, U.S.
Sanctioned Countries, and with persons that are the target of U.S. Trade Controls-related prohibitions and restrictions. We endeavor to conduct our business in compliance with applicable U.S. Trade Controls, and have developed, implemented, and maintain policies and procedures designed to prevent unauthorized activities. However, we cannot guarantee that such protocols will be fully protective, and our failure to comply could result in adverse legal and business consequences, including civil or criminal penalties, government investigations, and reputational harm.
Russia’s annexation of Crimea, recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military action against Ukraine have led to sanctions and other measures being levied by the United States, the European Union, the United Kingdom, Canada, Switzerland, Japan and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including, among others, the agreement to remove certain Russian financial institutions from the SWIFT payment system, which can significantly hinder the ability to transfer funds in and out of Russia. As a result of the conflict in Ukraine, the United States, the European Union, the United Kingdom, and other countries may implement additional sanctions, export-controls or other economic and other measures against Russia or other countries, regions, officials, individuals or industries in the respective territories. Such sanctions and other measures, as well as any potential responses from Russia or other countries to such sanctions, tensions and military actions, could adversely affect the global economy and financial markets, including heightened inflation, cyber disruptions or attacks, higher energy costs and higher supply chain costs, and could adversely affect our business, financial condition and results of operations.
In response to these developments, we discontinued our commercial activities in Russia and restricted Russia-based users from accessing our platform, to the extent required under applicable sanctions regimes. We have no way to predict the progress or outcome of the conflict in Ukraine or its impacts in Ukraine, Russia, Belarus or other countries as the conflict, and any resulting government reactions, are beyond our control. The extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have substantial impacts on the global economy and/or our business for an unknown period of time. Any of the above mentioned factors could affect our business, financial condition and results of operations.
Israeli Laws and Regulations
The Israeli Trading with the Enemy Ordinance — 1939, or the Ordinance, prohibits any Israeli person from trading with enemy countries or with the residents of enemy countries. The Israeli Ministry of Finance, which is responsible for implementing the Ordinance, has currently determined enemy countries to be Iran, Lebanon and Syria (as well as Iraq which is temporarily exempt from the list), or Israeli Sanctioned Countries. The Ordinance was enacted in 1939 and does not expressly address online services. We therefore cannot state with certainty if or how the provisions of the Ordinance apply to the type of services that we provide.
Although the Ordinance allows Israeli persons to apply for a permit to trade with Israeli Sanctioned Countries or their residents, we are not aware of a permit being granted or denied in the past to a person providing the type of services that we provide.
We have ceased providing services to users with a GEOIP address in, or a top level domain of, a U.S. Sanctioned Country. Lebanon is the only Israeli Sanctioned Country that is not also a U.S. Sanctioned Country.
In addition, if it is determined by a competent court that sanctions under the Ordinance cover the type of services that we provide, then we, our officers and employees may be subject to criminal and/or civil actions.
The application of indirect taxes, other tax laws or regulations could adversely affect our business and results of operations
The application of indirect taxes, such as sales tax, use tax, value-added tax, gross receipts tax, and digital services tax, to our business is an evolving issue that requires ongoing judgment to evaluate our applicable tax obligations. U.S. states are becoming increasingly aggressive in asserting a nexus for business activity tax purposes and imposing sales/use taxes on products and services provided over the Internet. We and our subsidiaries could be subject to U.S. state and local taxation if a state tax authority asserts that our activities or the activities of our subsidiaries give rise to a nexus. We and our subsidiaries could also be liable for the collection of U.S. state and local sales/use taxes if a state tax authority asserts that distribution of our products over the Internet is subject to sales/use taxes. Further, if a state tax authority asserts that distribution of our products or services is subject to such sales/use taxes, our premium subscribers could also be subject to sales/use taxes, including towards their users, which may decrease the likelihood that such registered users would purchase or continue to renew their premium subscriptions and purchase business solutions. Additionally, sales of our solutions subject to value-added tax, or VAT, at the applicable rate in each jurisdiction worldwide, may increase and cause either our prices to increase or our bookings and revenue to decline. Tax collection responsibility and the additional costs associated with indirect tax collection, remittance, and audit requirements, in addition to reporting requirements, could create additional tax exposure for us and additional burdens for our users. New obligations to collect or pay taxes of any kind could substantially increase our cost of doing business.
Changes in tax laws could adversely affect our tax position and financial results.
New income or other tax laws or regulations could be enacted at any time, which could adversely affect our business operations and financial performance. Further, existing tax laws and regulations could be interpreted, modified, or applied adversely to us. For example, the Inflation Reduction Act, which was enacted in 2022, and the One Big Beautiful Bill Act, which was enacted in 2025, made multiple changes to U.S. federal income tax laws, which could have implications for us and also for investors. The U.S. government may continue to enact significant changes to the U.S. federal income taxation of business entities including, among others, the imposition of minimum taxes or surtaxes on certain types of income. To the extent that such changes or the related uncertainty have a negative impact on us, our suppliers or our consumers, these changes may materially and adversely impact our business, financial condition, results of operations and cash flow.
Furthermore, the base erosion and profit shifting, or BEPS, initiative undertaken by the Organization for Economic Cooperation and Development, or OECD, which contemplates changes to numerous international tax principles, as well as national tax incentives, may have adverse consequences on our tax liabilities, including the country-by-country reporting, permanent establishment rules, transfer pricing rules, tax treaties and taxation of the digital economy. In January 2019, the OECD announced further work in continuation of the BEPS project, focusing on two pillars. Pillar One focused on the profit allocation of large multinational enterprises (with revenue in excess of Euro 20 Billion and profitability of at least 10%) among taxing jurisdictions based on a market-based concept rather than the historical “permanent establishment” concept. Pillar Two Global Anti-Base Erosion (GloBE) is focused on developing a global minimum tax rate of at least 15% applicable to in-scope multinational enterprises (with revenue in excess of €750 million). As of 2025, GloBE rules have been enacted in most jurisdictions in which we operate through local entities. However, Pillar Two remains under negotiation and continues to evolve. In December 2025, the state of Israel enacted the Minimum Corporate Tax Law for Multinational Groups, aligning with the OECD Pillar Two framework. The law introduced a Qualified Domestic Minimum Top-Up Tax (QDMTT) mechanism, which ensures that profits of multinational group entities are subject to a minimum Effective Tax Rate in Israel. The QDMTT applies from January 1, 2026, to income generated from that date onward. For companies benefiting from tax incentives under the Encouragement of Capital Investments Law, 1959, the QDMTT framework may affect the manner in which such incentives are utilized and presented in the financial statements. In particular, certain incentives may not reduce the Effective Tax Rate below the minimum threshold set by the QDMTT for financial reporting purposes. At the same time, a proposed Israeli law has been introduced with the objective of preserving and enhancing Israel’s investment incentives while maintaining compliance with OECD guidelines. While we do not currently anticipate GLoBE to cause us to incur a material tax liability in 2025, we are monitoring developments from the OECD, governmental bodies, such as the EU, and tax authorities in the jurisdictions in which we operate, to evaluate the impact of changing global tax laws. Given these developments, we may be subject to higher tax reporting requirements, which may adversely affect our effective tax rate or result in higher cash tax liabilities.
Changes in our provision for income taxes or adverse outcomes resulting from examination of our income tax returns could adversely affect our results.
We are subject to income taxation in the United States, Israel and numerous other jurisdictions. Our provision for income taxes could be adversely affected by many factors, including, among other things, changes to our operating structure, including a review of our IP structure, changes in the amounts of earnings in jurisdictions with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws. Significant judgment may be required in applying the relevant income tax accounting guidance to determine the appropriate recognition and measurement of our income tax positions, including positions related to potential refunds of previously paid taxes. If these positions are ultimately resolved unfavorably, it could adversely affect our provision for income taxes
We are also subject to the regular examination of our income tax returns by the Israeli Tax Authority, the U.S. Internal Revenue Service and other tax authorities in various jurisdictions. Tax authorities may disagree with our intercompany charges, cross-jurisdictional transfer pricing, IP structure, determine that we have a permanent establishment in foreign jurisdictions, or other matters and assess additional taxes. While we regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes, there can be no assurance that the outcomes from these regular examinations will not have a material adverse effect on our results of operations and cash flow.
Further, we may be audited in various jurisdictions, and such jurisdictions may assess additional taxes against us. The final determination of any tax audits or litigation could be materially different from our historical tax provisions and accruals, which could have a material adverse effect on our results of operations or cash flow in the period or periods for which a determination is made.
Due to the global nature of our business, we could be adversely affected by violations of anti-corruption, anti -bribery, and anti-money laundering laws.
Due to our global business, we may be subject to various anti-corruption, anti-bribery, and anti-money laundering laws. The U.S. Foreign Corrupt Practices Act of 1977, as amended, or FCPA, the UK Bribery Act 2010, or UK Bribery Act, the Proceeds of Crime Act 2002, Chapter 9 (sub-chapter 5) of the Israeli Penal Law, 1977, the Israeli Prohibition on Money Laundering Law—2000 and similar anti-fraud, anti-money-laundering and anti-bribery laws in other jurisdictions generally prohibit companies, their employees, and their intermediaries from making improper payments to foreign government officials and other persons for the purpose of obtaining or retaining business, and from otherwise being involved in receiving and/or transferring the proceeds of criminal activities. In addition, companies are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls. We operate in areas of the world that experience corruption, and, in certain circumstances, compliance with anti-bribery laws may conflict with local customs and practices. We operate in several countries and provide our services to users around the world, which geographically stretches our compliance obligations. In addition, changes in laws could result in increased regulatory requirements and compliance costs which could adversely affect our business, financial condition and results of operations. We cannot assure that our employees, including those engaged in sales activities, agents, partners, or third-party representatives will not engage in prohibited conduct and render us responsible under the FCPA, the UK Bribery Act or any similar anti-bribery laws in other jurisdictions, or that we have the proper training and awareness measures for such employees. If we are found to be in violation of the FCPA, the UK Bribery Act or other anti-bribery laws (either due to acts or inadvertence of our employees, agents, partners, or third-party representatives or due to the acts or inadvertence of others), we could be faced with whistleblower complaints, suffer criminal or civil penalties or other sanctions, which could have a material adverse effect on our business, results of operations, cash flows, financial condition, reputation and ability to win future business or maintain existing contracts.
Existing federal, state and foreign laws and regulations governing the sending of commercial emails and other consumer protection laws, could impact the use of our products and potentially subject us and our users to regulatory enforcement or private litigation.
Certain regulatory regimes, such as the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act, establish specific requirements for commercial email messages and specific penalties for the transmission of commercial email messages that are intended to deceive the recipient as to source or content, and obligates, among other things, the sender of commercial emails to provide recipients with the ability to opt out of receiving future commercial emails from the sender.
In addition, certain states and foreign jurisdictions prohibit sending unsolicited emails unless the recipient has provided the sender with advance consent to receive such email. We may be found liable in the event we are deemed to have been non-compliant with any such requirements. Furthermore, the ability of our users to opt out from receiving commercial emails from us, or our ability to successfully deliver commercial emails due to third-party email providers limiting exposure to such communications, may decrease the effectiveness of our email marketing strategy and may subject us to legal exposure if we do not adequately honor the user’s opt out request.
Compliance with other consumer protection laws and regulations such as the Federal Restore Online Shoppers Confidence Act of 2010, or ROSCA, addressing disclosure requirements for subscription auto-renewals, refund policies and our terms of use, could increase our costs of doing business, could decrease customer satisfaction by reducing opportunities for us to engage in tailored retention efforts, subject our business to increased liability for non-compliance, and could materially harm our business and results of operations. We may also potentially be subject to further legal exposure in the event our users are non-compliant with any of the above laws, regulations and any regulatory and industry standards with respect to their users.
Risks Related to Our Ordinary Shares
Our share price may be volatile, and you may lose all or part of your investment.
Our ordinary shares were first offered publicly in our initial public offering, or IPO, in November 2013, at a price of $16.50 per share, and have subsequently traded as high as $362.07 per share and as low as $14.28 per share through February 16, 2026. From January 1, 2025 through February 16, 2026, our ordinary shares traded as high as $247.11 per share and as low as $67.66 per share. In addition, the market price of our ordinary shares could be highly volatile and may fluctuate substantially as a result of many factors, some of which are beyond our control, including, but not limited to:
•actual or anticipated fluctuations in our and our competitors’ results of operations, or the competitive landscape generally;
•variance in our and our competitors’ financial performance from the expectations of market analysts;
•announcements by us or our competitors or other global corporations of significant business developments, changes in service provider relationships, acquisitions or expansion plans;
•announcements of technological innovations by us or our competitors;
•changes in the prices of our solutions;
•developments concerning regulations that may impact our business, or our involvement in litigation, including regarding intellectual property rights;
•breaches of cyber security or privacy incidents, and the costs associated with any such incidents and remediation;
•our sale or purchase of ordinary shares or other securities in the future, or such sales or purchases by our significant shareholders, or executive officers or directors;
•market conditions in our industry;
•changes in key personnel;
•the trading volume of our ordinary shares;
•short selling activities;
•the commencement or termination of any share repurchase program;
•changes in the estimation of the future size and growth rate of our markets; and
•general economic and market conditions or other global circumstances beyond our control, such as elevated inflation, interest rates, currency fluctuations, changes in international trade policies or imposition of tariffs, instability of banking systems, the wars and hostilities between Israel and its neighboring countries and regions, and between Ukraine and Russia.
If the market for technology stocks experiences a loss of investor confidence, the trading price of our ordinary shares could decline for reasons unrelated to our business, operating results or financial condition. The trading price of our ordinary shares might also decline in reaction to events affecting other companies in our industry even if these events do not directly affect us.
In addition, the stock markets have experienced and may continue to experience extreme price and volume fluctuations. Broad market and industry factors may materially harm the market price of our ordinary shares, regardless of our operating performance. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted against that company. If we were involved in any similar litigation, we could incur substantial costs and our management’s attention and resources could be diverted.
Our failure to meet our financial guidance or any component thereof in any given quarter or year may result in a decline in the market price of our ordinary shares.
We may release guidance in our quarterly earnings conference calls, quarterly earnings releases, analyst days or otherwise, based on predictions by management, which are necessarily speculative in nature. Our guidance, which may be multi-year in nature, may vary materially from actual results for a variety of reasons.
If our revenue, bookings, free cash flow, or other operating results or profitability measures, or the rate of growth of such measures, fall below the expectations of our investors, or below any forecasts or guidance we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our ordinary shares could decline substantially.
Such a stock price decline could occur even when we have met our own or other publicly stated revenue, bookings, free cash flow, or earnings forecasts. Our failure to meet our own or other publicly stated revenue, bookings, free cash flow or other forecasts, or even when we meet our own forecasts but fall short of securities analyst or investor expectations, could cause our stock price to decline and expose us to lawsuits, including securities class action suits. Such litigation could impose substantial costs and divert management's attention and resources.
We cannot guarantee that we will obtain the required approval for future increases to our repurchase program, if applicable, or that we will repurchase any of our ordinary shares pursuant to our announced repurchase program or that our repurchase program will enhance long-term shareholder value.
In July 2024, our board of directors authorized a repurchase program under which up to a total of $200 million was available to purchase our ordinary shares and/or convertible notes. Subsequently, our board of directors approved, in February 2025, a new repurchase program under which up to a total of $200 million was available to purchase our ordinary shares and/or convertible notes, and in August 2025 the Board authorized an increase to such program by an additional amount of $200 million. In January 2026, the Board authorized a two-year program to repurchase the Company’s securities (ordinary shares and/or convertible notes) in an aggregate amount up to $2 billion (inclusive of any unused amounts under the prior repurchase program). As of March 4, 2026, the aggregate amount available under the repurchase program is $2 billion. As more fully described in Item 5.E. “Operating and Financial Review and Prospects—Recent Developments,” on March 5, 2026, we announced that we commenced a “modified Dutch Auction” tender offer to purchase up to $1,750 million in aggregate purchase price of our ordinary shares. The specific timing and amount of repurchases under the repurchase program, whether pursuant to such tender offer or otherwise, will depend upon several factors, including market and business conditions, the trading price of our ordinary shares, and the nature of other acquisition or investment opportunities. In addition, our ability to repurchase may be limited by law, action by creditors, regulatory authority or agreements with third parties.
In addition, we need liquidity sufficient to fund payments of repurchases of ordinary shares and/or convertible notes. Repurchases of our ordinary shares and/or convertible notes pursuant to our repurchase program could affect the market price of our ordinary shares or increase its volatility, and could potentially reduce the market liquidity for our ordinary shares. Additionally, our repurchase program could significantly diminish our cash reserves or increase our debt leverage, which may impact our ability to respond to unforeseen liquidity needs, finance future growth, repay debts, and to pursue possible future strategic opportunities and acquisitions due to constrained capital. There is no assurance that our repurchase program will enhance long-term shareholder value, and short-term share price fluctuations could reduce the repurchase program’s effectiveness.
Future sales of our ordinary shares by our principal shareholders or directors and officers, or the perception that such sales could occur, may cause the market price of our ordinary shares to decline.
If our existing shareholders, particularly our largest shareholders, our directors, their affiliates, or our executive officers, sell a substantial number of our ordinary shares in the public market, the market price of our ordinary shares could decrease significantly. This includes sales by our four largest shareholders who, as of January 31, 2026, beneficially owned approximately 28.2% of our ordinary shares in the aggregate. We cannot predict what effect, if any, future sales of our ordinary shares, or the availability of our ordinary shares for future sale, will have on the market price of our ordinary shares. Sales of substantial amounts of our ordinary shares in the public market by us or these shareholders, or the perception that such sales could occur, could adversely affect the market price of our ordinary shares, may make it more difficult for investors to sell ordinary shares at a time and price which such investors deem appropriate, and could impair our future ability to obtain capital, especially through an offering of equity securities.
As of January 31, 2026, 5,977,396 ordinary shares are subject to outstanding options, performance share units (“PSUs”), and restricted share units (“RSUs”), awards granted to employees, office holders, and other service providers under our share incentive plans, of which 2,619,367 are ordinary shares issuable under currently exercisable share options.
Upon issuance, such shares may be freely sold in the public market, except for shares held by affiliates who have certain restrictions on their ability to sell.
In addition, as discussed in Item 5.E. “Operating and Financial Review and Prospects—Recent Developments,” upon the closing of the Private Placement, we issued and sold to the Purchasers an aggregate of 3,266,699 ordinary shares (equal to approximately 5.9% of our outstanding ordinary shares as of January 31, 2026) and, additionally, Warrants in respect of 816,674 underlying ordinary shares. If exercised, Warrants will be settled by net share settlement or cash settlement, at our election, so the ultimate number of ordinary shares that can be issued will depend on a number of factors, including the market price of our ordinary shares at the time, and cannot be ascertained at this time, but may be significant. In connection with the Private Placement, the Purchasers have entered into lock-up agreements with us pursuant to which they have agreed that they will not, among other things, and subject to certain exceptions, sell, transfer, or otherwise dispose of the ordinary shares, and Warrants issued to them in the Private Placement, or any ordinary shares that may be issuable to them upon the exercise of the Warrants, during the period ending one year after the closing date of the Private Placement, without our prior written consent. Following the expiration of the lock-up period, these ordinary shares issued to the Purchasers, and any additional ordinary shares that may be issued to the Purchasers upon exercise of the Warrants, may be freely sold in the public market. Furthermore, pursuant to the Purchase Agreement, we may be required to file a registration statement registering the resale of the ordinary shares issued to the Purchasers in the Private Placement and any additional ordinary shares issuable to the Purchasers upon the exercise of the Warrants. As a result, this may cause dilution to our shareholders’ equity, which may decrease the market price of our ordinary shares.
Our business could be negatively affected as a result of the actions of activist shareholders, and such activism could impact the trading value of our securities.
In recent years, U.S. and non-U.S. companies listed on securities exchanges in the United States have been faced with governance-related demands from activist shareholders, unsolicited tender offers and proxy contests. Although as a foreign private issuer we are not subject to U.S. proxy rules, responding to any action of this type by activist shareholders could be costly and time-consuming, disrupting our operations and diverting the attention of management and our employees. Such activities could interfere with our ability to execute our long-term and short-term strategic plans. In addition, a proxy contest for the election of directors at our annual meeting would require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our board of directors. The perceived uncertainties arising from such actions of activist shareholders also could affect our brand, reputation, and the price of our securities.
As a foreign private issuer whose shares are listed on the NASDAQ Global Select Market, we may follow certain home country corporate governance practices instead of certain NASDAQ requirements, and the loss of foreign private issuer status could adversely affect us.
As a foreign private issuer whose shares are listed on The NASDAQ Global Select Market, or NASDAQ, we are permitted to follow certain home country corporate governance practices instead of certain requirements of the rules of NASDAQ. We currently follow home country practice regarding quorum requirements, the distribution of annual and interim reports and the determination if shareholder approval is required before issuing securities or adopting or amending equity-based compensation plans. In the future, we may elect to follow home country practice in Israel for other matters, such as the NASDAQ requirement to have separate executive sessions of independent directors without management present or the NASDAQ requirement for the timing of annual shareholder meetings. Accordingly, our shareholders may not be afforded the same protection as provided under NASDAQ corporate governance rules. Following our home country governance practices as opposed to the requirements that would otherwise apply to a United States company listed on NASDAQ may provide less protection than is accorded to investors of U.S. domestic issuers. See Item 16G. “Corporate Governance.”
As a foreign private issuer, we are not subject to U.S. proxy rules or Regulation FD and are exempt from filing certain Exchange Act reports, and the loss of foreign private issuer status could adversely affect us.
As a foreign private issuer, we are exempt from the rules and regulations under the United States Securities Exchange Act of 1934, as amended, or the Exchange Act, related to the furnishing and content of proxy statements, our principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act, and our officers and directors are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act. We are also exempt from Regulation FD, which prohibits issuers from making selective disclosures of material non-public information. In addition, we are not required under the Exchange Act to file annual, quarterly and current reports and financial statements with the SEC, as frequently or as promptly as domestic companies whose securities are registered under the Exchange Act.
In order to maintain our current status as a foreign private issuer, more than 50% of our outstanding voting securities must not be directly or indirectly owned by residents of the U.S., or we must not have any of the following: (i) a majority of our executive officers or directors being U.S. citizens or residents, (ii) more than 50% of our assets being located in the U.S., or (iii) our business being principally administered in the U.S. Although we have elected to comply with certain U.S. regulatory provisions, our loss of foreign private issuer status would make such provisions mandatory. In addition, if we were to no longer qualify as a foreign private issuer, the regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly higher. If we did not qualify as a foreign private issuer, we would be required to file periodic reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer, and we also could be required to modify certain of our policies to comply with good governance practices associated with U.S. domestic issuers, which would involve additional costs. The loss of foreign private issuer status could eliminate our ability to rely upon exemptions from certain NASDAQ corporate governance requirements that are available to foreign private issuers.
In June 2025, the SEC issued a concept release, seeking public comment on the definition of foreign private issuer. The SEC is considering revisions that could significantly impact which foreign companies qualify for the more-relaxed U.S. reporting requirements afforded to foreign private issuers. The concept release outlines several potential approaches to revising the “foreign private issuer” definition, including updating existing eligibility criteria, adding a foreign trading volume requirement and incorporating an assessment of foreign regulation. The comment period expired in September 2025. There is currently no indication of any timing on any related proposed rulemaking. If the SEC amends the definition of “foreign private issuer” to include requirements with which we do not currently comply, we would lose our status as a foreign private issuer.
If a United States person is treated as owning at least 10% of our shares (including constructively through the ownership of our 2030 Convertible Notes), such holder may be subject to adverse U.S. federal income tax consequences.
If a United States person is treated as owning (directly, indirectly or constructively through the ownership of our 2030 Convertible Notes) at least 10% of the value or voting power of our shares, such person may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our group (if any). Because our group includes one or more U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated as controlled foreign corporations regardless of whether we are treated as a controlled foreign corporation. A United States shareholder of a controlled foreign corporation may be required to report annually and include in its U.S. taxable income its pro rata share of the controlled foreign corporation’s “Subpart F income,” “global intangible low-taxed income” and investments in U.S. property, regardless of whether the controlled foreign corporation makes any distributions. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation. Failure to comply with these reporting obligations may subject you to significant monetary penalties and may prevent the statute of limitations with respect to your U.S. federal income tax return for the year for which reporting was due from starting. We cannot provide any assurances that we will assist investors in determining whether any of our non-U.S. subsidiaries are treated as a controlled foreign corporation or whether such investor is treated as a United States shareholder with respect to any of such controlled foreign corporations or furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations.
The U.S. Internal Revenue Service has provided limited guidance on situations in which investors may rely on publicly available information to comply with their reporting and tax paying obligations with respect to foreign-controlled controlled foreign corporations. A United States investor should consult its advisors regarding the potential application of these rules to an investment in our ordinary shares.
We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. Holders of our ordinary shares.
We would be classified as a passive foreign investment company, or PFIC, for any taxable year if, after the application of certain look-through rules, either: (i) 75% or more of our gross income for such year is “passive income” (as defined in the relevant provisions of the Internal Revenue Code of 1986, as amended, or the Code), or (ii) 50% or more of the value of our assets (determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income. Based on the trading price of our ordinary shares and the composition of our income, assets, and operations, we do not expect to be treated as a PFIC for U.S. federal income tax purposes for the taxable year that ended on December 31, 2025, and we do not expect to be treated as a PFIC for our current taxable year. However, this is a factual determination that must be made annually after the close of each taxable year. Moreover, the value of our assets for purposes of the PFIC determination generally will be determined by reference to the trading price of our ordinary shares, which could fluctuate significantly. Therefore, there can be no assurance that we will not be classified as a PFIC in any taxable year. Certain adverse U.S. federal income tax consequences could apply to a U.S. Holder (as defined in Item 10.E. below) if we are treated as a PFIC for any taxable year during which such U.S. Holder holds our ordinary shares. Accordingly, each U.S. Holder of our ordinary shares should consult its own tax advisor as to the potential effects of the PFIC rules. See Item 10.E. “Additional Information—Taxation—United States Federal Income Tax Considerations.”
Provisions of Israeli law and our articles of association may delay, prevent or make undesirable an acquisition of all or a significant portion of our shares or assets.
Provisions of Israeli law and our articles of association could have the effect of delaying or preventing a change in control and may make it more difficult for a third party to acquire us or our shareholders to elect different individuals to our board of directors, even if doing so would be considered to be beneficial by some of our shareholders, and may limit the price that investors may be willing to pay in the future for our ordinary shares. Among other things:
•Israeli corporate law regulates mergers and requires that a tender offer be effected when more than a specified percentage of shares in a company are purchased;
•Israeli corporate law does not allow public companies to adopt shareholder resolutions by written consent, thereby requiring all shareholder actions to be taken at a general meeting of shareholders;
•our articles of association divide our directors into three classes, each of which is elected once every three years;
•our articles of association generally require a vote of the holders of a majority of our outstanding ordinary shares entitled to vote at a general meeting of shareholders and voting in person or by proxy at the meeting, and the amendment of a limited number of provisions, such as the provision dividing our directors into three classes or the removal of a director, requires a vote of the holders of 662/3% of our outstanding ordinary shares entitled to vote at a general meeting and voting in person or by proxy at the meeting;
•our articles of association require that director vacancies may only be filled by our board of directors; and
•our articles of association prevent “business combinations” with “interested shareholders” for a period of three years after the date of the transaction in which the person became an interested shareholder, unless the business combination is approved in accordance with our articles of association by a general meeting of our shareholders or satisfies other requirements specified in our articles of association.
Further, Israeli tax considerations may make potential transactions undesirable to us or to some of our shareholders whose country of residence does not have a tax treaty with Israel granting tax relief to such shareholders from Israeli tax. With respect to mergers, Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfillment of numerous conditions, including a holding period of two years from the date of the transaction during which certain sales and dispositions of shares of the participating companies are restricted. Moreover, with respect to certain share swap transactions, the tax deferral is limited in time, and when such time expires, the tax becomes payable even if no actual disposition of the shares has occurred. See Item 10.B. “Additional Information—Memorandum and Articles of Association.”
Risks Relating to Our Incorporation and Location in Israel
The War and Other Conditions in Israel could adversely affect our business.
We are incorporated under Israeli law and our principal executive offices are located in Israel. Accordingly, political, economic and military conditions in Israel directly affect our business. Since the State of Israel was established, a number of armed conflicts have occurred between Israel and its Arab neighbors.
On October 7, 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Following the attack, Israel’s security cabinet declared war against Hamas, and a military campaign against Hamas commenced in parallel to continued rocket and terror attacks by Hamas. Following the attacks by Hamas, Hezbollah, a terrorist organization based in Lebanon, and Iran, both directly and through proxies like the Houthi movement in Yemen, armed groups in Iraq and other terrorist organizations, also launched attacks against Israel. Additionally, following the fall of the Assad regime in Syria, Israel has conducted limited military operations targeting the Syrian army, Iranian military assets and infrastructure linked to Hezbollah and other Iran-supported groups. On February 28, 2026, Israel and the United Stated launched a joint attack on Iran, targeting key officials, military commanders and facilities, including the assassination of the Iran’s Supreme Commander and other key officials and military commanders. In retaliation, Iran launched hundreds of ballistic missiles and drones against civilian targets in Israel and against U.S. military bases, civilian aviation facilities and other civilian targets in several countries in the Persian Gulf, including Jordan, Kuwait, Bahrain Qatar, Iraq, Saudi Arabia and United Arab Emirates. The war has also led to widespread airspace closures in the region.
The intensity and duration of Israel’s war and hostilities against Hamas, Hezbollah, Iran, and other neighboring countries and regions is difficult to predict, as are economic implications on our business and operations and on Israel's economy in general.
In the event that the situation escalates into an even greater regional conflict or our facilities are damaged as a result of hostile actions, or hostilities otherwise disrupt our ongoing operations, our ability to provide services could be materially and adversely affected. Our commercial insurance does not cover direct losses that may occur as a result of events associated with the security situation in the Middle East, such as damages to our facilities resulting in disruption of our operations. Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks or acts of war, we cannot assure you that this government coverage will be maintained or will be adequate in the event we submit a claim.
During war and hostilities with Israel and its neighboring countries and regions, the Israel Defense Force (IDF) has called up several hundred thousand of its reserve forces to serve. Certain of our employees (including key employees) and/or their family members were called to active military reserve duty. The war and possibility of escalation may require a significant number of our Israeli employees to serve in active reserve duty, and as a result, our operations could be disrupted for extended periods of time. The absence of our employees due to their military service in the future could materially adversely affect our business and results of operations, especially if we are unable to replace these key employees with other personnel qualified in information technology and data optimization.
These events may be intertwined with wider macroeconomic indications of a deterioration of Israel’s economic standing that may involve an additional downgrade in Israel’s credit rating by rating agencies, which may have a material adverse effect on our company and its ability to effectively conduct its operations.
The global perception of Israel and Israeli companies, influenced by actions by international judicial bodies, may lead to increased sanctions and other negative measures against Israel, as well as Israeli companies and academic institutions. There is also a growing movement among countries, states, activists, and organizations to boycott Israeli goods, services and academic research, restrict business with Israel, or divest from Israeli companies. If these efforts become widespread, along with any future rulings from international tribunals against Israel, they could significantly and negatively impact our business operations.
Additionally, a number of countries, principally in the Middle East, still restrict doing business with Israel and Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies if hostilities in Israel or political instability in the region continue or increase, including as a result of the war which may further agitate the hostilities. These restrictions may significantly limit our ability to distribute our products to users in these countries or establish distributor relationships with companies operating in these regions. Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners, or significant downturn in the economic or financial condition of Israel, could adversely affect our operations, cause our revenues to decrease and adversely affect the share price of publicly traded companies having operations in Israel, such as us. Moreover, individuals in certain geographical regions may refrain from doing business with Israel and Israeli companies as a result of their objection to Israeli foreign or domestic policies. We may also continue to be targeted by cyber-terrorists because of being an Israeli company.
Finally, the current Israeli government is pursuing extensive changes to Israel’s judicial system. In response to the foregoing developments, certain individuals, organizations and institutions, both within and outside of Israel, have indicated that such proposed changes, if adopted, or the impact thereof, may individually or in the aggregate adversely affect the Israeli economy and our ability to do business, financial condition, results of operations, growth prospects, and ability to raise additional funds, if deemed necessary by our management and board of directors.
The tax benefits that are available to us require us to continue to meet various conditions and may be terminated or reduced in the future, which could increase our costs and taxes.
The Israeli Law for the Encouragement of Capital Investments, 1959, referred to as the Investment Law, was amended as part of the Economic Efficiency Law that became effective on January 1, 2017, or Amendment 73, under which a new incentive regime would apply to “Preferred Technological Enterprises” and “Special Preferred Technological Enterprises” that meet certain conditions stipulated under Amendment 73. In 2023 and 2024, we did not utilize the tax benefits under the Investment Law, as we had carry-forward losses for Israeli tax purposes. In 2025, we are expected to generate taxable income in Israel, and we expect to be eligible for benefits as a “Preferred Technological Enterprise”. As a result, the applicable corporate tax rate is expected to be reduced to 12%, and dividend distributions will be subject to a 20% withholding tax. In order to be eligible for the tax benefits for “Preferred Technological Enterprises,” we must continue to meet certain conditions stipulated in the Investment Law and its regulations, as amended. Further, in the future these tax benefits may be reduced or discontinued. If these tax benefits are reduced, cancelled or discontinued, our Israeli taxable income would be subject to regular Israeli corporate tax rates. The standard corporate tax rate for Israeli companies is 23%. Additionally, if we increase our activities outside of Israel through acquisitions, for example, our expanded activities might not be eligible for inclusion in future Israeli tax benefit programs. See Item 10.E. “Additional Information—Taxation—Israeli Tax Considerations and Government Programs.”
It may be difficult to enforce a U.S. judgment against us, our officers and directors and the Israeli experts named in this annual report in Israel or the United States, or to assert U.S. securities laws claims in Israel or serve process on our officers and directors and these experts.
We are incorporated in Israel. Only some of our directors and none of our executive officers are resident in the United States. Our independent registered public accounting firm is not a resident of the United States. Most of our assets and the assets of these persons are located outside the United States. Therefore, it may be difficult for an investor, or any other person or entity, to enforce a U.S. court judgment based upon the civil liability provisions of the U.S. federal securities laws against us or any of these persons in a U.S. or Israeli court, or to effect service of process upon these persons in the United States. Additionally, it may be difficult for an investor, or any other person or entity, to assert a claim based on U.S. securities laws in original actions instituted in Israel. Israeli courts may refuse to hear a claim based on an alleged violation of U.S. securities laws on the grounds that Israel is not the most appropriate forum in which to bring such a claim. Even if an Israeli court agrees to hear a claim, it may determine that Israeli law and not U.S. law is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing the matters described above.
Your rights and responsibilities as our shareholder are governed by Israeli law which may differ in some material respects from the rights and responsibilities of shareholders of U.S. corporations.
Since we are incorporated under Israeli law, the rights and responsibilities of our shareholders are governed by our articles of association and Israeli law. These rights and responsibilities differ in some material respects from the rights and responsibilities of shareholders of U.S. corporations. In particular, a shareholder of an Israeli company has a duty to act in good faith and in a customary manner in exercising its rights and performing its obligations towards the company and other shareholders and to refrain from abusing its power in the company, including, among other things, in voting at the general meeting of shareholders on certain matters, such as an amendment to the company’s articles of association, an increase of the company’s authorized share capital, a merger of the company and approval of related party transactions that require shareholder approval. A shareholder also has a general duty to refrain from discriminating against other shareholders. In addition, a controlling shareholder or a shareholder who knows that it possesses the power to determine the outcome of a shareholders’ vote or to appoint or prevent the appointment of an office holder in the company or has another power with respect to the company, has a duty to act in fairness towards the company. However, Israeli law does not define the substance of this duty of fairness. See Item 6.C. “Directors, Senior Management and Employees—Board Practices.” Some of the parameters and implications of the provisions that govern shareholder behavior have not been clearly determined. These provisions may be interpreted to impose additional obligations and liabilities on our shareholders that are not typically imposed on shareholders of United States corporations.
Additionally, the quorum requirements for meetings of our shareholders are lower than is customary for U.S. domestic issuers. As permitted under the Companies Law, pursuant to our articles of association, the quorum required for an ordinary meeting of shareholders will consist of at least two shareholders present in person, by proxy or by other voting instrument in accordance with the Companies Law, who hold at least 25% of our outstanding ordinary shares (and in an adjourned meeting, with some exceptions, any number of shareholders). For an adjourned meeting at which a quorum is not present, the meeting may generally proceed irrespective of the number of shareholders present at the end of half an hour following the time fixed for the meeting (unless the meeting was called pursuant to a request by our shareholders, in which case the quorum required is the number of shareholders required to call the meeting according to the Companies Law).
ITEM 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
Our History
Wix was founded in late 2006 on the belief that the Internet should be accessible to everyone to develop, create and contribute. We are a leading, global, web development platform for millions of users, including self-creators, agencies, enterprises and more with industry-leading infrastructure, performance, and security, delivering our solutions through a Software-as-a-Service (SaaS) model.
Since our founding, we have developed and launched multiple innovative products, services, and business solutions that empower any business, organization or brand worldwide to create, manage and grow a fully integrated and dynamic digital presence.
Wix’s vision is to simplify complex technologies and deliver the best tools for every type of user and business to create online. Powered by advanced AI and enterprise-grade infrastructure, Wix is trusted by hundreds of millions of users worldwide. Founded in 2006 and strengthened by the 2025 acquisition of Base44, the no-code application platform, Wix is continuing to build for the future of the internet.
In November 2013, we listed our shares on the NASDAQ Global Market. We are a company limited by shares organized under the laws of the State of Israel. We are registered with the Israeli Registrar of Companies. Our registration number is 51-388117-7. Our principal executive offices are located at Wix Campus, Building B, 5th Floor, Tel Aviv 6936024, Israel, and our telephone number is +972 (3) 545-4900. Our website address is www.wix.com. We use our website as a means of disclosing material non-public information. Such disclosures will be included on our website in the “Investor Relations” sections. Accordingly, investors should monitor such sections of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. Information contained on, or that can be accessed through, our website does not constitute a part of this annual report and is not incorporated by reference herein. We have included our website address in this annual report solely for informational purposes. Our SEC filings are available to you on the SEC’s website at http://www.sec.gov. This site contains reports and other information regarding issuers that file electronically with the SEC. The information on that website is not part of this annual report and is not incorporated by reference herein. Our agent for service of process in the United States is Wix.com, Inc., located at 100 Gansevoort Street, New York, NY 10014, telephone number (707) 235-1726.
Principal Capital Expenditures
For a description of our principal capital expenditures and divestitures for the three years ended December 31, 2025, and for those currently in progress, see Item 5.B. “Operating and Financial Review and Prospects—Liquidity and Capital Resources.”
B. Business Overview
We are a leading global cloud-based web development platform for millions of registered users and creators worldwide. Wix was founded on the belief that the Internet should be accessible to everyone and with the mission to enable anyone to express themselves online and for businesses and organizations to take their businesses, brands and workflows online to create and manage a fully integrated and dynamic digital presence. As of December 31, 2025, we empower approximately 304.2 million registered users worldwide who began the website building process with us. The Wix platform combines advanced AI, flexible web design, domains, hosting, templates and robust business and commerce solutions to help users build stronger brands, connect with their audiences, and scale their businesses online. Wix is shaping the future of how digital experiences are built with its intuitive AI-powered website builder and no-code application creation through Base44, making sophisticated creation accessible. We offer our solutions through a freemium SaaS business model (free and premium services), and as of December 31, 2025, we had approximately 6.1 million premium subscriptions. We also promote our services and solutions through our partners.
Our platform consists of several web creation products, with different purposes and primary audiences. Wix Harmony and Wix Editor, intended for full website creation targeted at users with basic, average or above average technological skills, and Wix Studio, intended for advanced users such as design agencies, professionals, and enterprises.
In January 2026, we released Wix Harmony, the company’s new flagship AI website builder designed for ease, speed, and professional‑grade results. Wix Harmony uniquely combines vibe coding with drag-and-drop design control. Within Wix Harmony, users work with Aria, an AI agent specialized in building high‑quality websites. Aria understands natural language and the full context of a site, so users can describe what they want and Aria can execute it.
The Wix Editor is a drag-and-drop visual development and website editing environment complete with high quality templates, graphics, image galleries and fonts. With our platform, Wix registered users can create and manage a professional quality digital presence tailored to their business and brand’s specific look and feel and that is accessible across all major browsers and the most widely used desktop, tablet and mobile devices. The Wix Editor personalizes the web creation process for each user’s intent, enhanced by AI Technologies.
Wix Studio is a unified website development platform that enables the creation of advanced websites at scale. Wix Studio offers powerful design and layout capabilities for complete design control, multi-site workflow management and other advanced capabilities, including a robust code environment with Wix online VS Code-based IDE and customizable applications. These features combined with tailored AI Technologies, including responsive design AI and an AI-powered code assistant, enable professionals and agencies to complete complex projects faster and more efficiently. Additionally, design professionals can easily transform their Figma designs into dynamic Wix websites with a Figma to Wix Studio plug-in launched in June 2024. Wix Studio represents an evolution from our previous professional level design product, Editor X, which was sunset in 2024. Through Wix’s web creation products and tools, users have access to a broad and expanding set of AI-powered capabilities designed to simplify and enhance the website creation and management experience. By combining Wix’s proprietary technologies and third-party AI models, including those from leading providers, we embed intelligence across the platform to help users generate, design, customize, and manage their online presence more efficiently. These AI capabilities support everything from building and structuring websites to creating content, visuals, branding elements, and customer interactions, as well as automating common business operations. With these solutions, Wix enables users of all skill levels to create professional, high-quality websites and operate their businesses more effectively and with ease.
Our platform also includes a full-stack, no-code/low-code development environment called Velo by Wix, through which users can combine the products and solutions our platform offers with advanced developer capabilities to create content-rich websites and web applications. Velo by Wix provides the ability to use databases to manage content, expose users application via application programming interfaces, or APIs, create server function to connect with external services, and custom code to create custom interactions. This may significantly reduce the need for developers and designers to juggle updating themes, hosts, content management systems (“CMSs”), plugins, content delivery networks (“CDNs”) and other third-party products.
We also offer several vertical-specific applications that business owners can use to operate mission critical aspects of their business online, such as selling goods, taking reservations and scheduling and confirming appointments. These applications provide our users with a custom front-end for users of their website, as well as a robust back-end management dashboard. We have developed these software applications for businesses in specific verticals, including retail and online stores, services, event planners and management, hotel and property management, fitness, music, photography and restaurants, among other verticals. These vertical applications are integrated into our website templates or can be installed on any existing website and set up with minimal effort by the user and without the need to write code.
We also offer a variety of additional products and services to further complement and enhance our users’ business or branding needs, most notably Payments by Wix, a payment platform that helps our users receive payments from their customers through their Wix website, and Paid Ad Campaigns, which allows businesses to run dynamic online ad campaigns on online ad platforms. Wix is also one of the largest resellers globally of Google Workspace, a productivity solution from Google, which is offered as an integrated productivity solution that enables people and businesses to safely connect, create and collaborate.
In addition, we provide a range of complementary services to meet user needs, including our App Market, which enables registered users to easily install and uninstall a variety of free and paid web applications developed by us or identified and selected through third-party developers based on user demands. These applications add functionality and are easily integrated into registered users’ websites with a few clicks, without the need for any coding, and include social plug-ins, online marketing and customer relationship management tools, contact forms and transactional and payment processing capabilities. Additional complementary services include, among others, the Wix Marketplace, an online marketplace which connects users with talented web experts; the Wix Owner App, a native mobile application enabling users to manage their websites and Wix operating systems on the go; and Branded App, which gives users the ability to create a fully branded native mobile application for their business.
Our cloud-based platform is accessed through a hosted environment, allowing our registered users to update their site and manage their business or organization at anytime from anywhere with an internet connection. We provide our users with flexibility and scalability, allowing them to expand their digital presence as their business, organizational, professional or individual needs change and grow.
Our scale and reach makes us an attractive partner for companies interested in distributing their own solutions to our audience. As we expand our platform through partnerships, we are able to increase our value proposition for existing users and more easily attract new users.
We are removing not only technological, but also geographic and linguistic barriers to web development, to empower almost anyone to create and manage a digital presence in their own language. We currently enable our users to create their online presence in any language and offer our platform in 22 languages — English, French, Spanish, Portuguese, Italian, Russian, German, Japanese, Korean, Polish, Dutch, Turkish, Norwegian, Swedish, Danish, Czech, Traditional Chinese, Thai, Ukrainian, Vietnamese, Hindi, and Indonesian.
In June 2025, we acquired Base44, an Israeli early-stage startup which offers an AI-powered platform enabling users to build fully functional web and mobile applications via natural-language prompts, automatically generating front-end, back-end, databases, authentication and deployment infrastructure, without the need for manual coding.
In May 2025, we acquired Hour One AI Ltd., a company specializing in generative-AI–based media creation and scalable video production for web and content platforms. The acquisition strengthens the company’s AI capabilities and accelerates its roadmap toward more immersive, AI-driven digital experiences, including advanced video and visual content creation tools that can be integrated into our existing product ecosystem.
Industry Background
As consumers have moved almost all forms of commerce online and onto mobile devices, businesses, organizations and professionals need not only a website, but also a dynamic digital presence with tools to manage operations in real time. Artificial intelligence is transforming how users are interacting with customers, suppliers, partners and employees online. These AI-powered interactions include back-end activities like invoicing, customer relationship management and payment processing, as well as front-end activities such as communications, online marketing, reservations and scheduling, and social media integration, all increasingly enhanced by AI-driven automation and data intelligence.
Use of dynamic web content and advanced digital services for high-level customer engagement is becoming increasingly prolific, fueled by AI capabilities that enable personalization, predictive analytics and conversational interfaces. However, building this presence is becoming more challenging for businesses, organizations, and professionals due to costs, time constraints, lack of skills and language barriers. The complexities of web creation and focus on design needs also create challenges for professionals who build web content, such as our partners. We believe there is a significant opportunity to provide an elegant cost-effective, AI-driven solution that caters to the accelerating demands of anyone who needs to create a dynamic, professional digital presence or application. Further, we also believe that there is a significant opportunity to provide solutions that help bring efficiencies to web development and further help businesses manage operations and grow online through vertical Enterprise Resource Planning (ERP), marketing, mobile, customer management and communication products and tools.
The Wix Platform
Our web development technology is built based on HTML5 and offers HTML5 compatible capabilities, web design and layout tools, domain registration and hosting, and other marketing and work flow management applications and services. Our hosting ensures sites are up and running and requires no installation. We consider website security as one of our highest priorities and strive to offer multi-layered security processes and practices to keep websites safe and secure.
Free Products and Services
Our registered users receive access to hundreds of free design templates for personal and business use, free web hosting, free usage of select AI tools, free access to our App Market, which offers a variety of free and paid applications, and blog support. The websites developed using our free product contain Wix advertisements in the footer and/or header, and tags, or metadata, which contain our name. Our name is also contained in the URL of the user’s website.
Our free product and service offerings include the following features and capabilities:
Creation Products
By registering with our service, our users gain free access to Wix’s web creation products: Wix Harmony, our flagship AI website builder; Wix Editor, an intuitive, flexible solution for individuals and businesses; Wix Studio, built for professional creators and agencies requiring advanced design, development, and collaboration capabilities; and Wixel, our standalone AI-powered visual design platform. These creation products enable our users to design and manage as many websites as they choose to establish or enhance their digital presence. No installation of software is necessary to use these web editors, as our advanced editing and design platform is accessible through the cloud directly from our website. Our web editors allow registered users to optimize their existing Wix sites for viewing on mobile devices. Our mobile site technology is also based on HTML5 and allows registered users to customize their sites for different mobile devices, yet share design elements and all site data between the different variants. We do not currently charge for gaining access to a mobile presence through our platform.
Base44 offers a free, limited, credit-based plan to users that provides access to core features, including AI-powered app building, authentication, database, analytics, and hosting. This free offering is well suited for testing, experimentation, and small projects. Designed for speed and simplicity, Base44 enables users to turn ideas into functional apps through a conversational interface. The platform automatically generates both the user interface and backend infrastructure, eliminating the need to manage separate tools or services.
Velo by Wix
Velo by Wix is a powerful no code/low code development platform that allows users to extend the functionality of their online presence. With Velo, creators, designers and developers can take advantage of a server-less development environment that features an array of advanced functions to create content-rich, custom websites and web applications. This product combines our creation products - Wix Editor and Wix Studio - with a powerful set of development capabilities. Starting with our creation products, users can design a front end (client-side), then employ Velo developer tools to add advanced functionality and capabilities to the back end. Velo includes features that are built into the platform and do not require code for their implementation. Velo enables easier web application creation, providing the ability to use databases to manage content, APIs to connect with external services and the ability to expose the web application as an API. This significantly reduces the need for website managers to coordinate between updating themes, hosts, CMSs, plugins, CDNs and other third-party products. Velo provides an all-in-one platform, hosted on the Wix cloud, that allows users to spend their time on creation, rather than on complicated setup and maintenance. These capabilities are coupled with the Wix OS backend to manage all operational aspects of a website or application.
Our Git integration enables developers to create and manage sites as a team, use any integrated development environment (“IDE”), integrate with CI/CD workflows and incorporate automated testing and verification tools. The Wix Git integration allows developers to work within a more stable and standard environment and provides more transparency to better mitigate problems.
Wixel is a standalone AI-powered visual design platform, bringing advanced visual design capabilities into a single intuitive interface. Built to democratize visual design, Wixel enables anyone to effortlessly bring their ideas to life, producing high-quality results with ease.
The platform integrates cutting-edge artificial intelligence with an intuitive user interface and powerful features to offer a seamless visual design experience.
Hopp is a platform by Wix designed specifically for social-first businesses looking to amplify their brand and scale their operations on social networks. The Hopp ecosystem boasts a variety of helpful features, but its signature offering is its link in bio tool.
Additional Complementary Products and Services
In addition to our creation products and development environment, multiple complementary products and services are available for users to create and manage their digital presence using Wix.
The Wix App Market offers our registered users a large variety of free and paid web applications for building, growing, and managing their businesses. The web applications available in the App Market, which are developed by us, or by third-party developers, meet many of our users’ business needs in marketing, support, bookings, accounting, design, social and media apps, and more.
Wix Marketplace connects users who need help creating and managing a website with experienced web professionals on the platform, offering a wide range of services to bring their ideas to life. Users can submit a detailed brief and get matched with the most suitable professional based on their needs, or browse hundreds of vetted experts filtered by service type, location, and budget, and review portfolios to find the right fit. In 2024, we expanded the Marketplace to include Wix Studio template sales, opening new opportunities for professionals to monetize their expertise while giving users high-quality, ready-to-use solutions. This addition further strengthens a thriving ecosystem built on creativity, innovation, and collaboration.
Our native mobile applications are available in iOS and Android. The Wix App allows users to fully manage their websites and Wix operating systems on the go and run their businesses, wherever they are, in real time. It is an interface that streamlines the day-to-day mobile management that businesses need to operate e-commerce, marketing, customer service, bookings and communications with customers and site visitors. We also offer Spaces by Wix, a dedicated mobile app that serves as an interface between the site owner and their customers. Spaces by Wix serves as a mobile native business front for buying products, ordering services, registering to attend events and more. Customers use Spaces by Wix to communicate with the business owner or between themselves as a community. Both apps are available for download for free in the Apple App Store and Google Play. In conjunction with the launch of Wix Studio, our cornerstone web and application development platform for professionals, we introduced the Wix Studio App. The Wix Studio mobile app allows agencies building on Wix Studio to manage all of their sites, projects, and clients on the go.
Our users have access to a set of tools to manage their site and business directly from a back-office dashboard that displays helpful information regarding the user’s site and business and data insights through Wix Analytics.
Wix Customer Care
Wix Customer Care provides support and guidance to our users throughout the Wix platform. Users can find answers through our self-service offerings (our Help Center and Helpmate) or engage with our Customer Care experts across multiple channels (calls, chat, or email) in numerous languages.
We have a global department of Customer Care teams that are located across the United States (primarily in Cedar Rapids, Iowa) and EMEA (Kyiv, Krakow, Tel Aviv, and Dublin). In addition, we partner with multiple offshore Business Process Outsourcing (BPO) teams in order to provide 24/7 coverage and ongoing support for most of our markets. We provide customized care in 13 languages.
Our Customer Care solution enables our experts to retrieve user details, see all previous interactions with Customer Care, and access useful information that can help resolve our users’ issues and assist them in achieving their online business goals.
Our experts are expected to resolve users’ issues and also encouraged to provide next-level service by using their vast knowledge and experience to provide meaningful suggestions that help steer our users to success. This approach is applied to all interactions with our users, both free and premium.
We also use data models developed by our team to identify and proactively contact new users so that we can help them set up and launch their online presence, as well as harness AI technology to improve the efficiency of our Customer Care capabilities.
Paid Products and Services
Wix Premium Subscriptions
Our premium subscriptions are purchased by businesses, organizations and professionals in a variety of fields, such as art, finance, entertainment, music, photography, tourism, beauty, sports, food services, property management or publishing. Premium subscriptions may also be purchased by creators such as our partners that, in some cases, are engaged by their customers to build web content.
Our premium subscriptions offer select AI tools, Velo by Wix, and other complementary products and services. Our premium services also include top-requested business tools, such as social posts, promotional videos and invoice management. Premium subscriptions also include the ability to connect a custom domain name, which can be purchased and managed directly through the Wix platform or purchased and connected to Wix from a third party, the removal of Wix branded ads on the site. Certain premium subscribers also benefit from priority level customer care.
As part of our effort to expand our AI capabilities to help our users create, design, and grow their online presence, we introduced AI Credits which can be utilized as part of our premium subscriptions across Wix’s AI‑powered tools and features. Premium subscriptions will be able to utilize AI Credit limits in accordance with the package they purchase.
In addition, users can purchase or use products and services to further manage and grow their online business on Wix:
Payments by Wix
Payments by Wix enables our users to accept payments for goods and services both online and in-person (through point of sale (“POS”)) from their customers, either from third-party payment processors or from Wix Payments, our proprietary fully integrated payments service. Users can select one or more payment methods available to appear on their checkout page, depending on their geographic location and type of goods and services they offer. Users must purchase a premium subscription to accept online payments.
Wix Payments allows users to set up and accept payments, in an automated and streamlined onboarding process made entirely within the Wix platform. Wix Payments also includes a dashboard to view the history of online and in-person transactions, from sales to payouts, in a single place, solving a significant challenge with doing business online. Many types of businesses, including e-commerce retailers, service providers, musicians, photographers, hotels, restaurants, and many more are able to take advantage of the efficiency provided by Wix Payments. Wix Payments is currently active in Brazil, the U.S., Canada, the UK, and several European countries.
Email Marketing Subscriptions
We offer stand-alone packages of email marketing features to help users engage with their audience, convert leads and boost traffic.
Users can purchase email marketing packages on a monthly, yearly, or multi-year subscription basis, and can choose between various price points based on the number of required emails sent per month. We also offer a free base package of limited email marketing capabilities.
Paid Ad Campaigns
An integrated marketing tool that allows businesses to run dynamic online ad campaigns that reach customers they want to target on online ad platforms such as Facebook and Google.
Wix Logo Maker
Wix Logo Maker generates a customizable, high-resolution logo in minutes, including through the use of AI, providing users with a critical piece for building an online brand. Through Wix Logo Maker, users can design a stunning logo, get downloadable professional vector files in a variety of sizes and color formats, custom design and order business cards with their customized business logo, and build a website based on the styles and colors of their customized business logo.
Domains
We offer our users the ability to choose and connect their own domain name to their website to better enhance their brand, through third parties that offer domain names, or through our offering as an ICANN accredited domain name registrar. Domain names are offered as a stand-alone product, and also are included, on a limited basis, as part of our premium subscription offerings. Registered users without a premium subscription are assigned a free URL which includes the Wix site address.
Google Workspace
We sell Google’s Google Workspace application as an integrated solution, which allows our users to create a personalized Gmail email address using their Wix-connected domain name, to enable them to send professional emails from their business address, create group mailing lists for sales, support, email marketing and more, and access other related features through their Wix’s site management dashboard. Since the beginning of 2025, users have had access to Gemini and NotebookLM to automate certain tasks using AI, including writing emails and search engine optimization (“SEO”) keyword research.
Wix POS
As part of our extended commerce offering, we offer to users who utilize Wix Payments, Wix POS, an end-to-end omnichannel solution unifying online and in-person sales directly from the Wix platform. With Wix POS, users who have an online store and a physical shop are able to manage their business easily while having a single product catalog, one inventory channel and a unified sales history.
Gift Cards
We provide users a fully native solution to manage gift cards. Gift cards can be used by brands and businesses to attract new customers, increase purchase frequency and retain existing customers.
Branded App by Wix
We offer a native mobile app builder that provides users with the ability to create and customize their own tailor-made application without a single line of code. In 2024, we launched an AI chat experience for our mobile app builder for global users in English. Through a conversational AI chat experience with the user to understand intent and goals, our AI Technologies generate a fully branded and customizable mobile app for the desired business.
Base44
Base44, an AI-powered platform that enables anyone to build fully functioning apps in minutes using natural language, offers a tiered subscription model for AI-powered app development. Base44 uses a dual-credit system: message credits are consumed when users interact with the AI to create or edit an application, effectively metering the development process, while integration credits are used when end users interact with the live application. All paid plans include unlimited apps, AI model selection, and in-app code editing.
Wixel
Wixel is a new standalone AI-powered visual design platform. Built to democratize visual design, the platform enables anyone to effortlessly bring their ideas to life, producing high-quality results with ease. The platform integrates cutting-edge artificial intelligence with an intuitive user interface and powerful features to offer a seamless visual design experience.
Wix Commerce Solutions
We offer a robust and comprehensive commerce platform for all types of business owners. As each business segment faces a unique set of challenges, we developed a commerce platform on top of which we offer tailored products and solutions to address specific business needs. This strategy allows us to build on this solid foundation by adding more layers and enhancements that cater to the specific needs of each industry and provides an easy and affordable way for these businesses to bring mission critical workflow online. Current vertical solutions that offer commerce functionality include Wix Stores, Wix Services, Wix Restaurants, Wix Events, Wix Fitness, Wix Hotels, Wix Music, Wix Showcase, Wix Video, Wix Blog, Wix Forms, Wix Groups, Wix Proposals, and Wix Donations.
Wix is also focused on agentic commerce to prepare merchants for the shift from traditional search-based shopping to AI-driven purchasing.
In late 2025, Wix announced partnerships with Stripe and PayPal to introduce tools that promote user product discoverability, which can be bought directly through AI agents. We intend to continue introducing additional solutions, once we are able to identify a need for such solutions, that are tailored to specific businesses.
Wix Stores
Wix Stores is our e-commerce platform that offers merchants professional tools and services to establish, design, manage and grow their e-commerce business. The platform allows merchants to sell their products across various channels, including online stores, native mobile apps, physical point-of sale, external e-commerce marketplaces, and social media platforms. Wix Stores enables merchants to manage their e-commerce operations from end-to-end, covering activities such as sourcing products, managing inventory, accepting payments, fulfilling and shipping orders, and obtaining detailed analytics and reporting. Additionally, merchants can leverage a wide-spectrum of marketing and e-commerce tools. The platform also includes numerous integrated third-party-apps, and is built to be extended by both developers and merchants to further customize the solutions and create unique e-commerce experiences at scale.
Wix Services
Wix Services is an end-to-end online booking solution, giving businesses an easy and effective way to showcase their services and allow online scheduling of appointments, classes and courses, as well as manage their own schedule by synchronizing with their primary Apple Calendar, Microsoft Outlook, and Google Calendar, reducing no-shows by sending auto-reminder emails to customers, selling memberships and packages, and customizing products.
Wix Restaurants
Wix Restaurants provides various solutions for restaurateurs, including Wix Restaurants Menus and Wix Restaurants Reservations. Wix Restaurants Menus enables restaurateurs to easily create a menu on their Wix website, using professionally created layouts offered on our site. Wix Restaurants Orders is an online ordering solution for restaurateurs enabling them to receive takeout and delivery orders through their desktop and mobile Wix websites and to consequently grow their business and maintain a direct relationship with their customers. Wix Restaurants Reservations allows restaurant owners to take online table reservations from their restaurant site and confirm and manage reservations via their Wix dashboard.
Wix Events
Wix Events is an application which enables users to create and manage their events on both desktop and mobile. Users can create their venue map, send invites, collect RSVPs, sell tickets and manage a guest list. Wix Events provides ready-made reports to track event sales to registrations. It can be used for conferences, meetups, concerts, shows, weddings, parties, and more. Users can use Wix Events to promote their events on social media and use third-party integrations for virtual events. We charge a ticket service fee from our Wix Events users on a sales of tickets sold through Wix Events.
Wix Fitness
Wix Fitness enables fitness instructors and studio owners to manage each aspect of their businesses from their website and the Wix Fit App. Fitness professionals can create a website using designed templates and customize the Wix Fit App, manage their calendars and classes, allow their customers to book classes, connect with their community, stream and sell videos, take payments and obtain analytics to help grow their business. Wix Fitness offers bookings, subscriptions, e-commerce including coupons, as well as a chat interface that allows for real-time interactions with customers.
Wix Hotels
Wix Hotels, by HotelRunner, is a full suite of professional tools for every touchpoint needed to launch, manage, and grow a hospitality business and maximize revenue.
Wix Hotels offers a comprehensive booking engine that is fully integrated into a Wix website for hotels, B&Bs and vacation rentals, making it simple to build and maintain the room inventory complete with pricing, booking, reservation and payment management capabilities. Through their dashboards, hotel owners can easily add reservations made elsewhere and manage their entire room inventory in one place and accept and manage bookings that come through many online travel agencies and marketplaces.
Wix Music
Wix Music is a comprehensive solution for musicians and entertainers that includes a music player, an easy-to-use digital asset management system, concert promotion and ticketing, fan management and communication tools and a range of specifically designed music website templates.
Wix Showcase
Wix Showcase is a comprehensive solution for maintaining media online, from both desktop and mobile, comprised of (i) Wix Portfolio (ii) Wix Pro Gallery, and (iii) Wix Photo Albums. Our Wix Portfolio offering enables users to easily create professional online portfolios. Students and professionals in the arts, entertainment, science and technology, fashion, architecture and building and other industries can display their work online with uniquely designed and customizable layouts for project collections of all sizes.
The Wix Pro Gallery provides designer-class tools to manage and showcase media online. From customizable layouts and professional settings to pixel perfect display controls, Wix Photo Albums gives users beautiful stand-alone albums for their client’s photos. Each album can be personalized with branding and shared directly with clients.
Wix Video
Wix Video allows our users to showcase, promote and sell videos on their Wix website. Users can create their own video channels, upload and stream videos in the highest quality, or easily add videos from YouTube, Vimeo and Facebook. Wix Video allows users to live stream and charge access for live events from desktop. Additional features include selling video downloads, customizable interactive cards placed on top of the videos, automatic sites for vloggers via Wix Editor and direct syndication of videos to YouTube and Facebook.
Wix Blog and Wix Forms
Wix Blog enables users to easily create a blog and grow an online community. Users can choose from several beautiful layouts with built-in social features. Readers can join the blog, create member profiles, and comment with images and videos. In addition, users have the option to set up a paywall and charge for access to selected content. In 2024, we announced a suite of AI-powered tools that generate the content and images for a user’s target audience, quickly turning ideas into engaging, near-ready articles.
Wix Forms enables users to easily create forms to get subscribers, generate leads and collect the information they need. Users can choose from multiple templates, such as contract, subscription and payment forms, or create their own form from scratch, using a variety of form fields. Users can add their forms to their Wix website or create standalone forms to share with a unique link. After receiving submissions, users can view their data in an easy to read table or export it to view offline.
Wix Groups
Wix Groups enables users to create an online community directly on their Wix site. The Wix Groups users can become members, join conversations, follow posts, upload videos, write comments and more. Users can choose from a variety of layouts and customize them to their needs. In addition, users have the option to set up a paywall and charge for access to select content.
Wix Proposals
Wix Proposals, powered by Prospero, is a comprehensive solution for managing long-term contractual or financial engagements. By using Wix Proposals, business owners can seamlessly create, customize, and finalize proposals tailored to their unique needs as well as work more efficiently with automated invoices. Prospero's proposal templates are seamlessly integrated with Wix's business management tools, providing users with a powerful and versatile proposal creation and management experience.
Wix Donations
Wix Donations enables nonprofits and fundraisers worldwide to easily establish an online presence, collect donations, attract donors, and manage their entire operation right from the Wix platform.
Artificial Intelligence and Generative AI Technologies
We offer a comprehensive suite of AI- and generative AI-powered web creation and business enablement tools, which are available to all of our users. Wix Artificial Design Intelligence (“ADI”), launched in 2016, was a first of its kind AI-based site creation platform. We have since developed and launched multiple products and solutions leveraging AI Technologies. We deploy hundreds of AI and generative AI models on our platform, both leveraging third-party models from OpenAI and other partners as well as our own proprietary algorithms. Harnessing AI Technologies simplifies the user experience and streamlines the website building process, allowing businesses to move online more quickly and easily. We also deploy AI models to improve our internal workflows and development velocity.
We have a large suite of AI-powered tools and features for web design, eCommerce, online marketing and advertising, and analytics. This includes, but is not limited to:
Wix AI Website Builder
The AI Website Builder generates a fully tailor-made site created with a layout, theme, text, images and business solutions such as scheduling, eCommerce, event management, and more, after participating in an in-depth dialogue about their intent and goals with our AI chatbot. Users have the ability to refine and customize the site by regenerating it or changing its look, feel, structure and layout. Furthermore, users can seamlessly continue to edit their site in the Wix Editor. The websites created using the AI Website Builder are fully optimized with Wix's reliable infrastructure including security and performance, as well as built-in marketing, SEO, CRM & analytic tools.
Kleo, Wix’s AI Marketing Agent
The AI Marketing Agent, also called Kleo, proactively creates marketing content and optimizes sites for SEO, helping users grow their business, reach new audiences, and save time. By connecting Wix’s powerful marketing tools, including SEO, social media, email marketing, and paid ads, and more, Kleo delivers a personalized strategy with ready-to-use content and recommendations tailored to specific users goals.
Aria, Wix’s AI-Powered Business Assistant
Aria simplifies the user experience by allowing users to query and perform various business and back-office tasks directly from the chat interface. Integrated throughout the dashboard, Aria allows users to ask questions, optimize site settings, complete tasks, and discover useful features. By guiding users toward relevant tools and add-ons, Aria is expected to drive app installations, increase package upgrades, and encourage the adoption of premium features, ultimately improving collections and helping reduce churn.
Wix AI Text Creator
The AI Text Creator is designed specifically for website creation. Upon a user entering inputs about the desired text, the AI Text Creator creates custom content ranging from a catchy title to a product description of an eCommerce product listed on the website and other detailed text that is precisely formulated for the website.
Business Launcher
In the beginning of 2025, we announced the launch of the Business Launcher, an AI-powered tool that helps users create new business initiatives from concept to execution. The Business Launcher guides users through various steps of starting a new business, offering personalized ideas, actionable plans, and essential tools to create a website and launch a business.
Wix AI Image Generator
The AI Image Generator generates high-quality, personalized image content quickly and cost-effectively. Upon the user providing a descriptive prompt about the desired image and the preferred image style, the AI Image Generator creates multiple versions of a custom image, ready to be added to the user’s website.
Alternative Layouts
The Alternative Layouts tool gives users the ability to redesign parts of a website in a single click.
AI Visual Sitemap and Wireframe Generator
Wix Studio’s AI-powered Visual Sitemap and Wireframe Generator creates tailored sitemap structures and bespoke wireframes with pages, sections, and relevant business applications from the user’s inputted project details. Once generated and further refined as needed, users can export the visual sitemap and share with clients for proposals, and access the Studio editor to edit and design the wireframes, pre-injected with content suggestions.
Auto Background Removal and Auto Enhance
The Auto Background Removal and Auto Enhance tools allow users to refine photos and upgrade the quality of their photos to match the look and feel of a website more seamlessly.
AI Theme Assistant
Through a conversational chat embedded directly within the Wix Editor, the AI Theme Assistant provides personalized guidance and real-time suggestions for the design theme of a website.
Auto-Generated Trailer
The Auto-Generated Trailer tool quickly transforms a user’s video file into a professional-looking informational trailer for site visitors.
AI Meta Tags Creator
The AI Meta Tags Creator is a natively developed built-in SEO tool that enables users to instantly generate optimized tailored title tags and meta descriptions based on their page data and content. This tool allows users to generate and customize SEO-friendly tags that align to SEO best practices for each website page in real-time, enabling users to create search-optimized and customized content more efficiently and effectively.
AI for Google Ads
The AI for Google Ads is an added layer of AI for Google Ads streamlines campaign creation with a single click. Users can quickly generate high-quality, effective titles and descriptions that align with relevant keyword themes and geographical locations, based on the campaign’s brief.
AI Portfolio Creator
Wix’s Portfolio Creator allows users to easily bulk upload media and organize them into collections for their online portfolio. Using AI image clustering technology, Wix will swiftly group images and suggest titles and descriptions for each project.
Product Recommendations
The Product Recommendations tool enables eCommerce users to proactively predict their customers’ needs and suggest relevant items based on customer history, improving business success.
AI Site-Chat
Wix’s AI Site-Chat serves as a virtual agent for the customers of our users. AI Site-Chat enables businesses to connect with visitors 24/7, answer their questions, and provide relevant information in real time, even when business owners are not available. Our AI Site-Chat is designed to detect the intent behind every query, then use live data from your website, support database and other internal resources to make precise recommendations.
AI Code Assistant
Wix Studio’s AI Code Assistant provides users working in the Wix Online VS Code-Based IDE with an AI-powered code assistant that helps developers write cleaner code and detect errors automatically.
Base44
Base44 is an AI-powered platform that enables anyone to build fully functioning apps in minutes using natural language. From personal productivity tools and internal workflows to customer portals and enterprise-grade products, Base44 turns ideas into ready-to-use applications with no integrations required.
HourOne
Hour One is a pioneer in generative AI media creation. It develops technology that enables the effortless creation of studio-quality content at scale. The platform supports personalized video and interactive experiences that merge storytelling with real-time engagement. At the core of Hour One’s offering is a proprietary cloud-based infrastructure that integrates generative AI inference with advanced 3D rendering.
Selling and Marketing
Our selling and marketing efforts focus primarily on online and offline advertising, and on sales teams and account management teams focused on meeting the needs of our partners that may utilize our products and services for their own needs or to serve their own customers.
We market our solutions and applications to businesses, organizations, and professionals, including entrepreneurs and freelancers, as well as through partners. We are able to attract a high volume of registered users, including those that purchase premium subscriptions, by offering free solutions and services, as well as upgrades and additional features and solutions that are offered under our premium subscriptions.
User Acquisition
We engage in online and offline advertising, with a focus on acquiring new users to our platform, converting these users into purchasing premium subscriptions, and increasing our revenue from them by selling them our business solutions. A majority of our premium subscriptions are generated from traffic to our website, primarily through search engine optimization or direct traffic, meaning visitor traffic that reached our website, Wix.com, via unpaid search results or by typing the URL of our website in their browser. We also acquire a small amount of free traffic through our participation on social networking sites and the banner advertisements we place on our non-paying registered users’ websites. In order to increase our exposure and optimize organic, or free, search engine results, we constantly test our search engine optimization strategy to ensure that our website is relevant to those potential customers seeking web development and design products. Furthermore, we continually evaluate our marketing spending and its effectiveness and invest in those activities that are most likely to maximize our return by generating premium subscriptions which will drive high revenues.
In addition to our online and offline marketing activities to acquire new users, we also acquire new users by engaging with partners that sell our solutions to, or purchase our solutions on behalf of, their customers. We accomplish this outreach with our sales and account management teams as well as through marketing content, online communities and organized events and conferences.
We believe that our branding efforts have accounted for a significant portion of users who come directly to our website, through typing our URL directly into their browsers, or through searching for “Wix” or a term related to the establishment of a digital presence. We believe that these users are also attracted due to referrals from other users, and via word-of-mouth regarding our products and services. Our marketing acquisition strategy benefits from the brand we have built as a leading web development and design platform for businesses, organizations, professionals, and individuals and also benefits from our use of A/B testing on our website, a marketing approach that aims to identify changes to our website, which may increase or maximize user interest and acquisition.
Our Design Studio and product development teams change the layout of our website and product interface from time to time, and engage in A/B testing to determine which layouts and graphics are the most successful in maximizing user acquisition.
Our marketing approach for our Wix offering focuses on higher-intent users. In doing so, we significantly reduce investment in acquisition marketing, which has meaningfully improved return on these investments until today, while new user cohort bookings increased. We believe the driver of this success is the strength of our Wix brand and further believe that our investments in building a global, scaled brand since our inception have made Wix synonymous with relevant general keywords on the internet.
Our marketing expenditures directed to advertising were $243.6 million in 2025, $175.6 million in 2024 and $142.8 million in 2023. Our marketing expenditures are primarily directed toward search engine advertising, advertising on social networks, video advertising and traditional media advertising.
We also maintain the Wix Affiliate Program, a program where our affiliates receive a commission for directing visitors to our website, by placing Wix ads on their own websites. From time to time, we also hold webinars, promotional contests, user meet-ups and public relations events.
We also maintain an active online presence using social networking sites and web design influencers for our Wix Studio brand.
Business to Business Sales and Marketing
We have enhanced our sales efforts to attract partners, including to large and enterprise-level users, and to those who sell premium subscriptions and additional business solutions to their customers at scale. We have established dedicated sales, marketing, and customer success teams to facilitate the use of our services by these partners.
User Retention
Once we attract visitors to our website, our preliminary goal is to register them as registered users. Once they are registered, we distribute marketing and promotional emails and support tools to help our registered users build their site. These materials are created by our Wix content team, which complements our marketing efforts by focusing on the consistency of our branding message online, in our in-person merchandise and at our community events. We constantly seek to generate premium subscriptions from our registered users and to maximize our revenue from such subscriptions by offering them enhanced functionalities through business solutions. Registered users who purchase premium subscriptions gain access to additional features based on the subscription they choose, which may include Wix ad removal, domain connectivity, e-commerce and payment solutions. In the beginning of 2026, we expanded our AI ecosystem to help our users create, design, and scale their business with unprecedented efficiency by integrating AI Credits directly into our premium subscriptions for new purchases, providing extra capabilities and a more powerful way for users to manage their digital presence and growth. We offer a 14-day refund to introduce registered users to these additional products and solutions. Registered users can choose between monthly, yearly or multi-year premium subscriptions, and, as of December 31, 2025, 83% of our premium subscriptions were for a one-year period or more and 17% were monthly. We seek to increase the number of premium yearly and multi-year subscriptions by offering promotions and discounts on these subscriptions. We also send emails to our yearly and multi-year premium subscribers, reminding them that their subscriptions are about to renew, as well as other discounts on products and services to maximize our revenue from such premium subscriptions. We seek to retain premium subscriptions by offering upgrades for our premium products, business solutions, and free and paid applications in our App Market.
We further retain premium subscriptions by developing relationships with subscribing users through our Customer Care team, with which we address our users’ technological needs and concerns. Through our Customer Care operations, we help our users with premium subscriptions to discover additional business solutions to enhance their subscription and, as a result, their engagement in our platform. We seek to maintain goodwill with all of our registered users, and retain them as registered users, even if they do not choose to subscribe to, renew or enhance their premium subscriptions.
We further expect to retain premium subscriptions and maximize our revenue from our partners by providing improved support, account management and additional business solutions to them, as well as back-office functionality required by our partners.
Our Technology and Infrastructure
Our cloud-based platform provides our registered users with a suite of web design, development and workflow management products and applications, as well as hosting for our registered users’ sites. All of these tools are accessible directly through our platform. In order to enhance our suite of products, we also conduct product and quality assurance testing on new and existing technology integrated into our platform.
Wix Cloud
We use a flexible hybrid cloud, comprised of both cloud-based storage and data centers, to host our products and our applications, and the websites that our registered users create. We rely on collocated servers, cloud service providers and other third-party hardware and infrastructure to support our operations. Our primary data centers are located in two geographically separate locations in the United States, one located on the East coast and the other located on the West coast, each of which is capable of running individually, and we have additional CDN providers worldwide and a hosting data center in Europe to improve our performance and provide backup in case of failure of our primary data centers. The vast majority of our data is located in our primary data centers in the United States hosted by Amazon Web Services by Amazon.com, Inc. and Google, Inc., as well as by additional providers as required or for specific purposes, and we also use cloud storage from Google, Inc. and Amazon.com, Inc. Our network equipment is stored in data centers leased from Equinix, Inc, and connected to cloud storage providers such as Google, Inc. and Amazon.com. To date, we have not experienced any material outages or service interruptions. This highly scalable multi-tenant technology infrastructure enables us to serve all of our users simultaneously and consistently, and scales based on overall traffic and capacity. As a result, our platform is not affected or slowed down by growth in the number of users whose data is stored in our cloud. Our cloud technology is also capable of full resource sharing, meaning that our registered users can access information via their individual website database easily over the Internet without the need for manual download, with content delivery provided by international cloud delivery network vendors. To further reduce the possibility that data of our registered users will be lost, and that our platform will not experience material downtime, we also use Google and Amazon cloud services as well as additional providers, to back up our users’ data. We apply industry standard data security measures to protect against potential vulnerabilities in our technology.
HTML5-Based Design Capabilities
HTML5 is the latest and most advanced markup language available for structuring and presenting dynamic content on the Internet. Websites using HTML5 can seamlessly incorporate video, audio, fonts, graphics and animations. Because of these advanced capabilities, we use HTML5 as the basis for our products. We developed our HTML5-based technology by leveraging our many years of experience in developing web development and design tools.
Style Engine and Smart Layout Technology
Our style engine technology provides registered users with advanced customization capabilities, making all aspects of a registered user’s website customizable. Our technology, which uses dropdown lists and customized color palettes, allows the user to quickly brand or re-brand their website with just a few clicks in our editor. In one click, users can customize backgrounds, banners, buttons, fonts and font sizes using a dropdown list. Registered users can customize colors using a color palette. One click also allows a user to simultaneously apply all color and style changes to all elements on the user’s website. This type of customization is generally time-consuming and requires knowledge of advanced HTML5 and CSS3 coding skills. However, with our style engine technology, our registered users can change their websites’ style and branding in moments.
Our editors include the Wix Editor’s Smart Layout technology that offers both functionality and customization. Our technology provides for dynamic layout and content, meaning that no one component box on a registered user’s website is static or incapable of being moved to other areas of the user’s page. Component boxes added to our registered users’ websites identify the user’s site structure and automatically adapt to the size and style of other component boxes within the site.
These capabilities allow the registered user full control over the layout of their website, allowing the user to create a design-rich, professional website. Through Wix Studio, which offers advanced design and layout capabilities, we allow users and design professionals, through its wide, flexible canvas, to use modern CSS technologies to accurately and proportionally scale elements at every viewpoint. Additionally, the Alternative Layout tool provided under our suite of AI Technologies give users the ability to redesign the composition of their website in a single click.
Web Service Creation Environment
We provide a software development platform with a software development kit, or SDK, REST APIs, and webhooks that enable third-party developers to build applications for Wix websites. Applications may include widgets (also called site components) that are embedded on users' sites. Developers configure and publish these applications through the Wix Developer Center using tools such as the Wix CLI. Widgets are embedded on users' sites through various integration methods. For integrations that need to receive website events, such as order management and financial services , applications access site data through set permissions and webhooks that deliver real-time event notifications. The Wix App Market is the primary distribution channel where users can browse and install third party applications to add functionality to their website. Applications may display widgets as embedded UI components within pages, in modals or popups, or as dashboard panels, depending on the application's design. Widgets that provide meaningful content and include dedicated, SEO endpoints can have their content indexed by search engines as part of the site’s SEO view.
Wix Databases
Our application development and data technology, Wix Databases, is a platform that allows our registered users and developers to create their own applications and work management tools, such as contact forms and FAQ lists. This platform uses our AI engine, drag-and-drop, style engine and smart layout technology, so that the user or developer may create professional-looking applications and tools with customized styles, colors and layouts. The applications and tools created through Wix Databases can be fully integrated into our registered users’ websites through publishing on the Wix Editor platform.
Infrastructure
Our operations, including marketing and delivery, are efficient since the vast majority of them are online-based and, as such, provide us with flexibility and scalability. Our hybrid cloud and content delivery network enables our registered users to purchase and use our products and services online, through our website. As a result of these efficiencies, we have built a large registered user base, while limiting the number of physical offices required for conducting our business. Our marketing and customer support operations are supported by online marketing tools such as CPC advertising, SEO and email distributions, and by customer support tools such as online forums and an advanced user self-service support system using online ticketing and a database of questions and answers.
We currently process all of the payments for use of our paid services by our users using a billing system that enables our registered users to submit information of credit, debit card and other alternative payment methods for payment processing. This system interfaces with a number of different payment gateway providers who then link to payment card processors and/or acquiring banks, based on the registered user’s jurisdiction. With this system, we are not materially dependent on any single gateway provider or payment card processor in any of our main markets.
Our infrastructure includes servers and bandwidth capacity collocated from third parties located in the United States, as well as in Europe, and any other locations as required, including CDNs from Fastly, Google, and Amazon, and cloud storage from Google and Amazon as well as additional providers as required or for specific purposes. We mostly use third-party cloud services to run our research and development activities (such as Amazon, Google, GitHub and BuildKite) and to operate our office applications. Our use of servers in different locations to back up our registered users’ data and to serve our registered users, protects against accidental data loss and reduces disruption to our operations from server outages or physical damage to a server. We aim to maintain industry standard server operations, which will provide our growing registered user base with industry standard reliability to access our products and consistent service provisions.
Research and Development
As of December 31, 2025, we had 2,530 employees and contractors focused on research and development. Our research and development team, which also includes our design team and our quality assurance team, is comprised of individuals with experience in web development, AI Technologies, design, data management and data analysis. Our principal research and development activities are conducted from our headquarters in Tel Aviv, Israel. We also engage teams of developers in Beer-Sheva, Israel, Lithuania, Germany, the U.S., UK, Poland, Ireland, Brazil, the Netherlands, Japan, Australia, Canada, and Ukraine to benefit from the significant pool of talent that is more readily available in those markets. Our research and development personnel focus primarily on enhancing our technology, improving our products, and developing new products and solutions, including AI.
Our research and development spending was $645.5 million in 2025, $495.3 million in 2024 and $481.3 million in 2023. We invest in research and development to enhance and expand our product and service offerings, tailor our marketing efforts, and expand our registered user base. Our development strategy is focused on identifying updates and enhanced features for our existing offerings, developing new offerings that are tailored to our registered users’ and our partners’ needs and often arise out of their suggestions or new technological advancements such as AI Technologies, and improving the performance, quality, security, resilience, and scalability of our platform. For this, we rely heavily on sophisticated tools, such as automated process systems which, for example, enable our registered users to request new product features and upgrades, which then enables us to quickly react to our registered users’ requests. We also engage in A/B testing to measure the effectiveness of our upgrades and new product features.
In addition to our organic efforts at recruiting through our career portal, we aim to recruit talented individuals for our research and development team through a variety of techniques, including cooperation with local universities, work programs for students, and recruiting events. We are a member of key industry organizations and regularly attend and participate in industry events, where our employees frequently speak. We also engage with potential talents by publishing professional blog posts, videos and research articles as well as hosting technology meet-ups in our headquarters and regional offices.
Intellectual Property
Our success depends, among other things, upon our ability to protect our core technology and intellectual property. We rely on a combination of patent, trademark, copyright, industrial design and trade secret laws, as well as licensing agreements and third-party nondisclosure and assignment agreements to protect our intellectual property and know-how. We have filed a number of patent applications and continue to file for patents to protect our inventions. We have pending patent applications in the United States as well as in several additional jurisdictions worldwide. We also have pending Patent Cooperation Treaty, or PCT, applications that may lead to additional patent applications. Certain of our applications have been accepted and patents were granted. However, we cannot be certain that all our applications will issue as patents or of the scope of protection any issued patent would provide. We actively monitor innovation within our company so as to properly consider whether to file additional patent applications. In addition, we have registered and filed a number of applications to register our copyrights, however, we do not seek to register the copyrights in all of our copyrightable works. We enter into confidentiality and proprietary rights agreements with our employees, consultants, business partners and other third parties to whom we may disclose confidential information, and we control access to and distribution of our proprietary information.
The Wix brand, and the brands of other solutions within our overall offering, such as Base44, are central to our business strategy, and we believe that maintaining, protecting and enhancing these brands is important to expanding our business. We have obtained trademark registrations in certain jurisdictions for trademarks that we consider material to the marketing of our products, including the WIX® mark and the Wix logo, as well as the Wix Studio® mark and logo. We also have trademark applications pending for additional marks that we use to identify certain product collections used for certain of our products. While we expect to submit additional trademark applications and expect our pending applications to mature into registrations, we cannot be certain that we will obtain such registrations.
We have also registered and continue to register rights to our typeface font, MADEFOR, available in 10 weights and all the Latin languages in the U.S., EU, UK, and Brazil.
Our in-house know-how is an important element of our intellectual property. The development of our web development and design software and management of our data analysis and marketing programs, requires sophisticated coordination among many specialized employees. We believe that duplication of this coordination by competitors or individuals seeking to copy our software offering would be difficult. This risk is further mitigated by the fact that our product and service offerings are cloud-based such that most of the core technology operating on our systems is never directly exposed to our users or to our competitors.
Competition
We enable our registered users to create a customizable, fully integrated and professional digital presence through an attractive web-based software platform with various marketing and workflow management capabilities. We believe that the key competitive factors in our market include, simplicity and ease of use, functionality, product breadth, integration of multiple solutions, price, design quality, global scope, security and reliability, and brand recognition and reputation.
We believe that we compete favorably on these factors because of the unique combination of our comprehensive suite of design and digital presence software, advanced technology and product integration, efficiencies in operations, brand recognition and marketing expertise, longstanding customer, designer and developer relationships, large user base, and track record of successfully attracting new users to our website and products.
The market for providing web-based website design and management software is evolving and highly fragmented today. We believe no provider currently offers a comprehensive, customizable, fully integrated workflow solution to create and manage a professional digital presence comparable to ours. However, some providers currently offer separate products or technologies that overlap with parts of our solution and could try to integrate these with other products to offer a more comprehensive solution in the future. Providers of these point products vary and include:
•DIY template-based and other website design companies that enable website creation such as Squarespace and Webflow;
•Versatile, web-based, and app-based graphic design platforms such as Canva and Figma;
•offerings that provide e-commerce software enabling a merchant to sell goods online such as Shopify and BigCommerce;
•software that enables a business to take and manage appointments and/or reservation schedules online, such as Mindbody;
•content management systems that help users build and manage content for a website such as WordPress.org and Drupal;
•solutions that help businesses market themselves online such as search engine marketing, or SEM, and SEO providers, e-mail marketing solutions and online directory listing services; and
•“vibe coding” solutions for developers, such as Claude Code, Cursor and Replit, and AI-powered low-code/no-code application builders, such as Lovable, Google AI Studio, Bolt.new, and V0 which may be competitive with our Base44 offering.
Additionally, several large service companies that primarily offer domain registration and hosting services, such as GoDaddy, provide the ability for a business owner to build a website using their tools or have one built by their workforce. Moreover, newly emerging technologies that utilize AI may also offer services that overlap with certain solutions we offer, including the emergence of generative AI website builders.
Environmental, Social and Governance (ESG) Practices
Underpinning our Company’s strategy is the belief that the internet is meant to be safe and accessible to all. Therefore, our platform is here to make a difference, to create a better world for everyone and to provide opportunities for any type of user or business, regardless of their size, age, economic status, skill level, location, vision or any other factor. To achieve this, we aim to create a culture in which any person can be successful, is treated equally and fairly and is a partner in the success of the Company, sharing in the responsibility of building and improving it, while being attentive to and supporting one another.
Our three core pillars that influence the specific ways in which we are making positive change in our communities and the key issues that we believe are important to our business and stakeholders:
Our Users
We promote and support fair, accessible, social and economic opportunities in the professional services global market. We invest resources into data privacy and how we can protect our users by, among other things, building key infrastructures and policies to help safeguard the data on our platform and the privacy of our users. We are also committed to maintaining the integrity of the transactions performed on our platform.
Our People
Our work environment seeks to foster a culture where our employees feel empowered, challenged, and in possession of the tools to thrive at work and in their personal lives. We are continuously learning and looking at ways to continue to create an environment that is an inclusive place of work.
We believe personal and professional growth is imperative to the well-being of our employees. Such growth requires us to provide opportunities to acquire new skills and to develop through exploration, experience and learning. Our company and guild structure is one of the main tools that allows and encourages development. The guild enables knowledge sharing, promotes professional development and provides mentorship.
In addition, we provide learning and development programs and have multiple specialized teams focused on developing great learning and growth platforms for our people worldwide.
As part of our continued emphasis on satisfaction and retention, we have teams dedicated to supporting our employees’ physical and mental health. We offer well-being benefits (that may vary by location) like health insurance, fitness sessions and subsidized psychology sessions.
We actively encourage our people to support their local communities, and we recognize and respect our employees’ passions about engaging with their communities by creating initiatives like the “Wix Playground Academy” (a program hosted by Wix employees that helps young creatives looking to enrich their professional skill sets, interact with industry leaders and network with other designers), “Wix Karma” (a global initiative that gives our employees the opportunity to help others in any way they can), and “Wix Tomorrow” (a platform that provides teachers with a dedicated online system built for students, alongside curriculum and resources to teach web creation in the classroom).
Our Company
We recognize the importance of making sustainable choices. We initiated our longer-term environmental goals with the way we built our new headquarters, which is LEED GOLD certified.
Our ESG reports that detail our philosophy and the various initiatives under each of the pillars above are available on our investor relations website at https://investors.wix.com/esg; neither the reports nor the content of our website are incorporated by reference into this annual report.
Government Legislation and Regulation
Actions of our Users and Other Third Parties
In many jurisdictions, including the United States and countries in Europe, laws relating to the liability of providers of online services for activities of their users and other third parties are evolving and are currently being tested by a number of claims, including actions based on defamation, breach of data protection and data privacy rights and other torts, unfair competition, copyright and trademark infringement, and other theories based on the nature and content of the materials searched, the ads posted, or the content uploaded by users. These laws, and court or regulatory interpretations of these laws (including their limitations and safe harbors), may shift quickly in the United States and worldwide.
In the EU, the DSA imposes content moderation obligations, notice obligations, transparency obligations, advertising restrictions and other onerous requirements. The DSA may increase our compliance costs, require changes to our processes, operations and business practices, which may adversely affect our ability to attract, retain and provide our services to customers, and may otherwise adversely affect our business, operations and financial condition. Failure to comply with the DSA can result in fines of up to 6% of total annual worldwide turnover, and recipients of services have the right to seek compensation from providers in respect of damage or loss suffered due to infringement by the provider to comply with the DSA. Similar legislation is being considered or is in process in other jurisdictions relevant to our business.
User Data
We hold certain personal data of our registered users, primarily, username, email address and billing details that are provided by our registered users and by our users who have purchased premium subscriptions, and may store certain personal data of the users of our registered users’ websites. We are subject to the data protection and storage laws of the State of Israel, as well as certain industry standards. In addition, we are subject to local data privacy legislation in the areas where we operate, including Europe and the U.S. We operate in accordance with the terms of our terms of use and privacy policy, which describe our practices concerning the use, transmission and disclosure of user data and personal data.
United States
A number of legislative proposals pending before the U.S. Congress and various state legislative bodies, concerning data privacy and data protection, including changing regulatory guidelines and interpretations, could affect us and our business, our products and our services. Additionally, some states have passed proactive, as well as reactive, data privacy and information security legislation. More generally, some observers have noted that such legislation could mark the beginning of a trend toward more stringent United States federal privacy legislation, which could increase our potential liability and adversely affect our business. Regulatory enforcement actions and trends in consumer class actions against other online companies suggest a trend that regulators and judges may require such companies to adopt certain minimum data privacy protections and data security measures to protect personal data. We have a dedicated team that implements relevant measures in relation to applicable data privacy and information security laws, and assesses the impact of other such laws that may apply to us in the future. The costs of compliance with these laws, best practices and regulatory guidance may increase in the future as a result of changes in regulatory guidelines and interpretation.
Europe
We are subject to the GDPR and to the UK GDPR, which impose a comprehensive and strict data protection compliance regime in relation to our collection, control, processing, sharing, disclosure and other use of data relating to an identifiable living individual (personal data of UK and EEA residents), including obligations in relation to data breaches, extensive data subject/individual rights, and restrictions on international transfers of personal data, as well as introducing significant fines and other penalties for breach. Additionally, the GDPR and UK GDPR have an extra-territorial effect and regulate the covered data processing activities of businesses regardless of their location or the locations of their servers. We are subject to the GDPR and the UK GDPR as a “controller” of certain information (primarily in relation to our users and our employees) and as a “processor” of certain other information (primarily personal data collected by our registered users themselves through the websites that we host for them). The GDPR and UK GDPR impose obligations on both controllers and, to a lesser extent, processors. Regulatory guidance and enforcement on the extent and application of these obligations is quickly evolving. The company has a dedicated team that seeks to take the necessary measures in order to maintain compliance with the GDPR, UK GDPR and other applicable data protection regulations.
We are also subject to EEA and UK privacy laws on cookies, web beacons and similar tracking technologies, and e-marketing, including obligations to, among other things, obtain consent to store information or access information already stored on an individual’s terminal equipment (e.g., computer or mobile device). Prior to providing such consent, individuals must receive clear and comprehensive information, in accordance with applicable laws.
We are also subject to the EU AI Act, which entered into force in 2024 and classifies AI systems according to risk, imposing transparency and governance obligations on providers and deployers of AI systems.
Israel
In addition, we are also subject to the Israeli Privacy Protection Law 5741-1981 (“PPL”), and its regulations, including the Israeli Privacy Protection Regulations (Data Security) 2017 (“Data Security Regulations”), which came into effect in Israel in May 2018 and impose obligations with respect to the manner certain personal data is processed, maintained, transferred, disclosed, accessed, and secured, as well as the guidelines of the Israeli Privacy Protection Authority (“IPPA”). In this respect, material changes to the Data Security Regulations may require us to adjust our data protection and data security practices, information and other technical and organizational security measures, certain organizational procedures and supervisory roles. Failure to comply with the PPL, its regulations, and guidelines issued by the IPPA may expose us to administrative fines, civil claims (including class actions), and in certain cases criminal liability, and compel us to take certain remedial actions to rectify any irregularities, which may increase our costs. Starting from August 2025, Amendment 13 to the PPL will introduce stricter sanctions for non-compliance, potentially reaching millions of NIS. The IPPA may initiate administrative inspection proceedings, from time to time, without any suspicion of any particular breach of the PPL, as it has done in the past with respect to dozens of Israeli companies in various business sectors.
Artificial Intelligence
The regulatory framework for AI Technologies is rapidly evolving as many federal, state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations. Already, certain existing legal regimes (e.g., relating to data privacy) regulate certain aspects of AI Technologies, and new laws regulating AI Technologies have been enacted in the EU and are expected to enter into force in the United States in 2026.
In the United States, the Biden administration issued the 2023 AI Order, emphasizing the need for transparency, accountability and fairness in the development and use of AI. However, as previously described, the Trump administration has rescinded the 2023 AI Order and issued the 2025 AI Order that, among other things, requires certain agencies to develop and submit to the President action plans to “sustain and enhance America’s global AI dominance,” and to specifically review and, if possible, rescind rule making taken pursuant to the rescinded 2023 AI Order. Thus, the Trump administration may continue to rescind other existing federal orders and/or administrative policies relating to AI Technologies, or may implement new executive orders and/or other rule making relating to AI Technologies in the future. Agencies, such as the Department of Commerce and the Federal Trade Commission, have issued proposed rules governing the use and development of AI Technologies. Legislation related to AI Technologies has also been introduced at the federal level and is advancing at the state level. Any such changes at the federal or state level could require us to expend significant resources to modify our products, services, or operations to ensure compliance or remain competitive. For example, California has enacted numerous laws regulating the use of AI Technologies, such as requiring companies to disclose certain uses of generative AI. Other states have also passed AI-focused legislation, such as Colorado’s Artificial Intelligence Act, which will require developers and deployers of “high-risk” AI systems to implement certain safeguards against algorithmic discrimination, and Utah’s Artificial Intelligence Policy Act, which establishes disclosure requirements and accountability measures for the use of generative AI in certain consumer interactions. Such additional regulations may impact our ability to develop, use, procure and commercialize AI Technologies in the future.
In Europe, the European Commission enacted a regulation establishing a comprehensive, risk-based governance framework for AI in the EU market, the EU AI Act. The EU AI Act applies to companies that develop, use and/or provide AI in the EU and, depending on the AI use case, includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security and accuracy and introduces significant fines for noncompliance.
Facilities
Our principal facilities are located in Tel Aviv, Israel, and consist of approximately 80,000 square meters (approximately 861,112 square feet) in our corporate headquarters at the Wix Campus. The lease for our headquarters is for an initial period of 10 years commencing on the transfer of possession (which occurred on October 14, 2022), and we have the option to extend the lease period for additional periods of up to 15 years, subject to the conditions of the lease agreement. We began occupancy of the first stage of our offices in October 2022, and the second stage on October 9, 2023. A portion of our headquarters is sub-leased to sub-tenants. We also lease additional office space in Beer-Sheva, Israel totaling approximately 1,766 square meters (approximately 19,010 square feet). These facilities accommodate our principal executive, research and development, marketing, design, business development, human resources, finance, legal information technology, customer support and administrative activities.
In the United States, we maintain offices in New York City, Miami, and Cedar Rapids, Iowa. In New York, we lease approximately 23,074 square feet under a lease that will terminate in September 2026, and will begin a new lease for approximately 24,339 square feet under a lease that will expire in March 2037. In Miami, we hold a lease totaling 12,644 square feet (of which 9,008 are subleased) that expires in July 2032. In Cedar Rapids, we occupy a total of 13,679 square feet with a lease that expires in November 2027.
In Lithuania, we maintain offices in Vilnius; in Germany, we maintain an office in Berlin; in Ireland, we maintain an office in Dublin; in Brazil, we maintain an office in Santana de Parnaiba near the city of Sao Paulo; in Japan, we maintain an office in Tokyo; in Poland, we maintain an office in Krakow and Warsaw; and in Ukraine, we maintain offices in Kyiv, Lvov and in Dnipro.
Legal Proceedings
See Item 8. “Financial Information—Consolidated Financial Statements and Other Financial Information—Legal proceedings.”
C. Organizational Structure
The legal name of our company is Wix.com Ltd., and we are organized under the laws of the State of Israel. Our key subsidiaries are: Wix.com Brasil Serviços De Internet Ltda. (Brazil), Wix.com, Inc. (Delaware, United States), Wix.com Luxemburg S.a.r.l (Luxemburg), Wix.com UAB (Lithuania), Wix Online Platform Limited (Ireland), and Wix.com Japan K.K. (Japan).
Our subsidiary Wix.com Inc. wholly owns DeviantArt, Inc. (Delaware), which wholly owns Wix Payments Canada Inc. (Canada).
D. Property, Plants and Equipment
For a discussion of property, plants and equipment, see Item 4.B. “Information on the Company—Business Overview—Facilities.”
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Company Overview
We are a leading, global platform for creating, managing, and growing a complete digital presence. We empower millions of users including self-creators, agencies, enterprises and more with industry-leading infrastructure, performance, and security, delivering our solutions through a Software-as-a-Service (“SaaS”) model. Our platform combines advanced AI, flexible web design, domains, hosting, templates and robust business and commerce solutions to help users build stronger brands, connect with their audiences, and scale their businesses online. Wix’s vision is to simplify complex technologies and deliver the best tools for every type of user and business to create online. Powered by advanced AI and enterprise-grade infrastructure, Wix is trusted by hundreds of millions of users worldwide. Founded in 2006 and strengthened by the 2025 acquisition of Base44, the no-code application platform, Wix is continuing to build for the future of the internet.
Overachievement of Three-Year Financial Plan
During our Analyst and Investor Day in August 2023, we presented a three-year financial plan and long-term financial framework (the “Three-Year Plan”) as well as an update on our product strategy, including generative AI plans and our new groundbreaking professional website development platform, Wix Studio. The Three-Year Plan detailed our expectations for achieving profitability targets, specifically increasing free cash flow margins and the path to positive GAAP net income. We have fully achieved our expectations set out in the Three-Year Plan by achieving positive GAAP net income in 2023, two years earlier than anticipated, and notably achieved the “Rule of 40”, a year earlier than anticipated, primarily by outperforming our free cash flow target.
In 2025, we continued to benefit from the expansion of our product and service offerings as well as the expansion of our total addressable market. Our total revenue in 2025 was $1.99 billion, an increase of 13% over 2024. Our Creative Subscriptions Revenue was $1.41 billion, which represented an increase of 11% from 2024. Our Business Solutions Revenue was $583.3 million in 2025, which represented an increase of 18% from 2024. See “How We Generate Revenues” below. Our Creative Subscriptions Revenue represented 71% of our total revenue in 2025, and our Business Solutions Revenue represented 29% of our total revenue in 2025. Our future growth will depend, in part, on our ability to generate new premium subscriptions, retain existing premium subscriptions, increase the adoption of our business solutions, and increase the revenue we generate from existing and new premium subscriptions, including from partners. It will also depend, in part, on our continued ability to manage our infrastructure effectively and adapt to changes to technologies used in our solutions, such as the use of AI Technologies. Strong top-line growth coupled with a diligent operating cost base enabled us to generate nearly $600 million of free cash flow in 2025, meaningfully above the ~$500 million target set in our Three-Year Plan.
How We Generate Revenues
Our total revenues are comprised of Creative Subscriptions Revenues and Business Solutions Revenues.
Creative Subscriptions Revenue
We generate Creative Subscriptions Revenue from the sale of monthly, yearly and multi-year premium subscriptions for our website and application solutions, including vertical solutions when purchased in a bundled subscription, from the sale of domain name registrations and other minor creative product subscriptions we offer, as well as through our Base44 offering.
Our website and application solutions are offered through a freemium model in which users can register with an e-mail address and build, launch and manage a digital presence for free, for an unlimited amount of time. Premium subscription plans are offered for various periods, such as monthly, yearly, or multi-yearly, and at various price points depending on functionality and capabilities.
Users can also purchase a domain name registration from us, as an ICANN accredited domain registrar, or in our capacity as a domain reseller of third-party registration services. For those users who purchase a premium package, a voucher is provided that may be redeemed for a new domain registration free of charge for the first year of subscription. The domain can be registered under yearly or multi-year periods. We also allow our users to connect existing domains purchased from external providers to sites upgraded to one of the multiple premium plans we offer.
Yearly and multi-year subscriptions provide benefits to our operating model because we are able to collect cash up front, increase overall retention rates and have greater visibility into revenues. We provide incentives to drive yearly and multi-year subscriptions, including a lower average monthly price relative to a monthly subscription. As of December 31, 2025, 83% of our overall premium subscriptions were yearly or multi-year subscriptions and 17% were monthly subscriptions.
To increase Creative Subscriptions Revenue, we focus on growing our registered user base by providing our registered users with a high-quality user experience and more products and solutions, including AI-enabled capabilities, so that they become more engaged on our platform, can create and complete the project they desire, and are therefore more inclined to purchase a premium subscription. We provide different pricing plans based on the needs of our users who are looking to purchase a premium subscription. In addition, we also focus on attracting new partners and maintaining our current partners, who use our platform to service their customers, by providing them with products and solutions suitable for their needs, including high quality products, such as our website development platform for professionals, Wix Studio, personal account management services, and the ability to benefit from revenue sharing programs with us under specified conditions.
We further focus on increasing the amount of revenue per subscription by adding features and functionality to our offerings for which we can charge higher prices, and by optimizing packaging and pricing by geographic region.
Business Solutions Revenue
We generate Business Solutions Revenue from the sale of various products and services that we offer to help users and partners manage and grow their business online, on top of their Creative Subscriptions. These products and services include, among others, applications that are developed by us and by third parties and sold both through our App Market or elsewhere on our platform. Applications include Google Workspace, which is our most frequently sold application. Other components of Business Solutions Revenue include the sale of payments services through Payments by Wix, Paid Ad Campaigns, Email marketing, Wix POS, Wix Logo Maker, DeviantArt (our wholly-owned subsidiary), and other products.
We increase Business Solutions Revenue by offering additional business solutions to our users and partners to manage and grow their business online and be more successful. We believe the more products and services we can provide our users and partners, the more successful they can be online, driving higher retention and loyalty, and in turn our revenue.
The combination of growing our registered user base, growing and retaining our premium subscription user base and increasing the revenue we generate per premium subscription are all key factors to our success.
User Acquisition Investment
Our user acquisition strategy is based on the significant amounts of data that we have accumulated regarding the behavior of users that we acquire from different sources and the amount of bookings and revenue we generate through the sale of creative subscriptions and business solutions. We extrapolate from this historical user behavior data to predict future user behavior and make investment decisions regarding our marketing expenditures. In order to grow our registered user base and, in turn, our creative subscriptions and increase our revenue and bookings per premium subscription, we consider the time period over which we seek to return an amount of bookings equal to the marketing expenditures used to attract a specific group of registered users, which we refer to as a cohort, during a particular period. In order to achieve the targeted time for return on those marketing investments, we adjust the paid marketing channels that we use and the amounts that we pay to acquire new registered users in addition to considering those registered users that come from organic and direct sources. For example, we could pay a substantially identical amount to acquire fewer registered users that generate creative subscriptions at a higher rate, or that generate creative subscriptions at a lower rate but with a higher revenue or bookings per subscription, versus acquiring more registered users that generate creative subscriptions at a lower rate or with lower revenue or bookings per subscription.
In addition to our online and offline marketing activities to acquire new users, we also acquire new users by engaging with partners that use our platform for their own work and as resellers for their clients. We accomplish this outreach with our sales and account management teams, as well as through marketing content, online communities and organized events and conferences.
To track our growth, progress and execution of marketing efforts, including achievement of our targeted time for return on marketing investment, we regularly review the relationship between origination of our registered users, origination of our creative subscriptions and the amount of revenue and bookings we generate from these creative subscriptions.
A. Operating Results
The information contained in this section should be read in conjunction with our consolidated financial statements for the year ended December 31, 2025 and related notes and the information contained elsewhere in this annual report. Our financial statements have been prepared in accordance with U.S. GAAP.
For a discussion of our results of operations for the year ended December 31, 2024, including a year-to-year comparison between 2024 and 2023, refer to Item 5. “Operating and Financial Review and Prospects” in our Annual Report on Form 20-F for the year ended December 31, 2024, filed with the SEC on March 21, 2025.
Components of Statements of Operations
Revenues
Sources of Revenues and Revenue Recognition
Our total revenues are comprised of revenues we generate from Creative Subscriptions and revenues we generate from Business Solutions.
Creative Subscriptions Revenue
We generate Creative Subscriptions Revenue from the sale of monthly, yearly and multi-year premium subscriptions for our website and application solutions.
Revenues from premium subscriptions are recognized ratably over the term of the service period. We offer new Wix premium subscription packages with a 14-day refund period during which the registered user can cancel the subscription and receive a full refund. We classify such amounts collected from new subscriptions as customer deposits until the end of the 14-day refund period. After the 14-day refund period has ended, we recognize premium subscription revenues ratably over the term of the service period, either monthly, annually or longer.
We also derive our Creative Subscriptions Revenue from selling domain name registrations. Revenues from domain name registrations accounted for approximately 5% of total revenues in both 2025 and 2024. We recognize revenues from domain registration sales at a point of time upon collection. We do not offer trial periods for domain name registrations, unless required by applicable laws.
Business Solutions Revenue
We generate Business Solutions Revenue from the sale of various products and services that we offer to help users manage and grow their business online. These products and services include, among others, applications, both sold through our App Market or elsewhere on our platform, Google Workspace, Payments by Wix, Paid Ad Campaigns, and Email marketing.
Our Business Solutions Revenue in 2025 includes revenue that was generated by Payments by Wix. Revenues related to our Wix Payments product earned from processing payments are recognized at the time of the transaction, and fees are determined based in part on a percentage of the Gross Payment Volume (“GPV”) processed plus a per transaction fee, where applicable. When payment methods other than Wix Payments are used, we may also generate revenues from revenue - share arrangements which we have in place, based on the GPV. We recognize revenues generated from Payments by Wix upon collection, the majority of which we recognize on a gross basis.
In addition, our Business Solutions Revenue in 2025 includes revenue that was generated through the sale of applications. Google Workspace, which we sell as an integrated solution and which allows our users to create a personalized Gmail email address using their Wix-connected domain name alongside additional functionalities, comprised the majority of application sales in 2025. Google Workspace subscriptions are sold on a monthly or yearly basis, and we recognize revenue ratably over the subscription period, on a gross basis.
Applications revenue is also generated by applications sold through our App Market by third-party developers for which we receive a portion of the sales price paid by our registered users. For applications developed by third-party application developers, we typically account for revenues on a net basis by recognizing only the commission we retain from each sale.
We also generate applications revenue from the sale of self-developed applications, and this revenue is recognized mainly over the service period.
Geographic Breakdown of Revenues
The following table sets forth the geographic breakdown of revenues for the periods indicated:
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Year Ended December 31, |
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2025 |
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2024 |
| North America |
60% |
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60% |
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| Europe |
25% |
|
25% |
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| Latin America |
4% |
|
4% |
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| Asia and Others |
11% |
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11% |
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| Total |
100% |
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100% |
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The percentage of revenue that is derived from each geographic region is partly based on the amount of marketing investment we choose to make in specific countries. Revenue generated by geographic region is also influenced by fluctuations in foreign currency exchange rates. Adoption of our solutions and services in geographic regions outside of North America is driven by our ability to offer our platform in local languages and offer local billing solutions. When introducing our products to new markets, we first focus on establishing an operational online billing system, if needed, prior to launching and investing in local marketing activities. We currently offer our platform in 22 languages: English, French, Spanish, Portuguese, Italian, Russian, German, Japanese, Korean, Polish, Dutch, Turkish, Norwegian, Swedish, Danish, Czech, Traditional Chinese, Ukrainian, Thai, Vietnamese, Hindi, and Indonesian.
Costs and Expenses
Cost of Creative Subscriptions Revenue
Cost of Creative Subscriptions Revenue consists primarily of the allocation of costs associated with the provision of website and application creation and services, namely, hosting costs for our platform, related Customer Care costs along with domain name registration costs. Cost of Creative Subscriptions Revenue also consists of personnel and the related overhead costs, including share-based compensation. Our Cost of Creative Subscription revenue increased during 2025, mainly due to hosting and revenue related costs (including AI costs). We expect our cost of Creative Subscriptions Revenue to increase in 2026 due to the increase in the number of registered users, both for Wix and Base44 as well as increased sales of domain registrations and the respective hosting, AI, and Customer Care costs to support the growth.
Cost of Business Solutions Revenue
Cost of Business Solutions Revenue consists primarily of the allocation of hosting and support costs associated with the provision of the components that comprise Business Solutions Revenue. Cost of Business Solutions Revenue also consists of revenue share payments according to our agreements with third-party providers, including Google for the Google Workspace application. It also includes costs that we incur when transactions are processed through Payments by Wix, such as credit card interchange and network fees (charged by credit card providers such as Visa, MasterCard and American Express) as well as third-party processing fees and additional services. We expect our cost of Business Solutions Revenue to increase as more users purchase these products and services and as a larger volume of payments are transacted through Payments by Wix.
Research and Development
Research and development expenses consist primarily of personnel, overhead costs, and share-based compensation, related to our solutions and service development activities including new initiatives, quality assurance and other related development activities. We expect research and development costs as a percentage of revenues to increase, mainly due to earn out payments related to the Base44 acquisition, however, we expect that they will continue to increase on an absolute basis as we develop new solutions and add functionalities to our existing solutions and services and expand our offerings, including solutions that incorporate AI Technologies.
Selling and Marketing
Our primary operating expense is selling and marketing. A significant component of our selling and marketing expenses are user acquisition costs, which consist primarily of fees paid to third parties for our cost-per-click advertising, social networking and marketing campaigns and other media advertisements. We intend to continue our user acquisition efforts to drive revenue growth while focusing on our return-on-investment targets. In addition, we direct a portion of our marketing expenses towards a more traditional advertising activity. Other selling and marketing expenses also consist primarily of data scientists and data engineering, marketing personnel, including personnel who engage with our partners, and the related overhead costs, including share-based compensation. Our marketing expenses also include billing costs in connection with the processing fee of our bookings.
General and Administrative
General and administrative expenses primarily consist of personnel and overhead related costs, including share-based compensation, for our executive, finance, legal, human resources and administrative personnel. General and administrative expenses also include acquisition related expenses, legal, accounting and other professional service fees, and other corporate expenses. We also incur costs associated with being a public company in the United States, including compliance under the Sarbanes-Oxley Act of 2002 and rules promulgated by the SEC and NASDAQ, and director and officer liability insurance.
Financial Income (Expenses), Net
Financial income (expenses), net consists of interest income from investments in marketable securities and deposits as well as income from the changes in the valuation of our holdings in public and private companies. Financial income (expenses), net also includes amortization of convertible debt issuance costs and costs related to derivative instruments we enter into for foreign exchange transactions to hedge a portion of our payments in NIS and revenue transactions denominated in Euros, British pounds and other currencies, as well as income and expenses related to the change in the fair value of such derivative instruments. In addition, financial income (expenses), net includes the fluctuation in value due to foreign exchange differences between our monetary assets and liabilities denominated in NIS and other non-USD currencies.
Income Tax Benefit (Expense)
Income tax benefit (expense) consists of current taxes, including those related to our international activities, and deferred taxes arising from temporary differences between the accounting and tax bases of assets and liabilities. In 2025, we generated taxable income in Israel, and given that at the end of 2025 we fully utilized our net operating loss carryforwards for Israeli tax purposes, we are eligible for certain tax benefits in Israel under the Law for the Encouragement of Capital Investments, 1959, or the Investment Law. Accordingly, our preferred technological taxable income in Israel, should be subject to tax at the rate of 12%. We expect to be eligible for tax benefits as a Preferred Technological Enterprise. For more information regarding the tax benefits available to us, see Item 10.E. “Additional Information—Taxation.” Our taxable income generated outside of Israel or derived from other sources in Israel will be subject to the regular corporate tax rate.
Comparison of Period to Period Results of Operations
The following table sets forth our results of operations in dollars and as a percentage of revenues for the periods indicated:
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Year Ended December 31, |
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2025 |
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2024 |
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Amount |
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% of Revenues |
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Amount |
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% of Revenues |
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(In USD thousands) |
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| Revenues |
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| Creative Subscriptions |
1,409,727 |
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|
70.7 |
% |
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1,264,975 |
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71.8 |
% |
| Business Solutions |
583,317 |
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29.3 |
% |
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495,675 |
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|
28.2 |
% |
| Total |
1,993,044 |
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|
100.0 |
% |
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1,760,650 |
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|
100.0 |
% |
| Cost of revenues |
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Creative Subscriptions
|
237,288 |
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|
11.9 |
% |
|
213,422 |
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|
12.1 |
% |
| Business Solutions |
399,065 |
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20.0 |
% |
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351,213 |
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19.9 |
% |
| Total |
636,353 |
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31.9 |
% |
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564,635 |
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32.1 |
% |
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Gross profit
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1,356,691 |
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68.1 |
% |
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1,196,015 |
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67.9 |
% |
| Operating expenses: |
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| Research and development |
645,501 |
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32.4 |
% |
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495,281 |
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28.1 |
% |
| Selling and marketing |
514,280 |
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25.8 |
% |
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425,457 |
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24.2 |
% |
| General and administrative |
195,158 |
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9.8 |
% |
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175,136 |
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9.9 |
% |
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| Total operating expenses |
1,354,939 |
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68.0 |
% |
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1,095,874 |
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62.2 |
% |
| Operating income |
1,752 |
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0.1 |
% |
|
100,141 |
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5.7 |
% |
| Financial income (expense), net |
(5,015) |
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(0.3) |
% |
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51,820 |
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2.9 |
% |
| Other income (expenses) |
4,352 |
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0.2 |
% |
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(36) |
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— |
% |
| Income before taxes on income |
1,089 |
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0.1 |
% |
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151,925 |
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8.6 |
% |
| Income tax benefit (expense) |
51,047 |
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2.6 |
% |
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(13,603) |
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(0.8) |
% |
| Loss from equity method investment |
(1,490) |
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(0.1) |
% |
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— |
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— |
% |
| Net income |
50,646 |
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2.5 |
% |
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138,322 |
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7.9 |
% |
Year Ended 2025 Compared to Year Ended 2024 Revenue and Bookings
Revenue increased by $232 million, or 13%, from $1.76 billion in 2024 to $1.99 billion in 2025. Revenue growth this year was driven in part by solid performance in our Creative Subscriptions business as Creative Subscriptions ARR increased 13% year over year to $1.52 billion at the end of 2025, and Business Solutions ARR increased 18% year over year to $312.4 million at the end of 2025. This increase was also driven by an increase in average revenue per premium subscriptions (“ARPS”) and the increasing availability of our new products and solutions. ARPS growth was driven by the onboarding and retention of high quality users that purchase higher priced packages, better adopt Business Solutions, and drive compounding GPV as well as the price increase implemented in early 2024, partially offset by macroeconomic pressure on small to mid-sized business users, which were headwinds to GPV growth during 2025. Our Creative Subscriptions Revenue was $1.41 billion in 2025, which represented an increase of 11% from 2024. Our Business Solutions Revenue was $583.3 million in 2025, which represented an increase of 18% from 2024.
Bookings increased by 13%, from $1.83 billion in 2024 to $2.07 billion in 2025, primarily driven by an increase in average bookings per premium subscription. Our Creative Subscriptions Bookings were $1.48 billion in 2025, which represented a 12% increase from 2024. Our Business Solutions Bookings were $593.4 million in 2025, which represented 15% growth over 2024.
Costs and Expenses
Cost of Creative Subscriptions Revenue
Cost of Creative Subscriptions Revenue increased by $23.9 million, or 11%, from $213.4 million in 2024 to $237.3 million in 2025. This increase was primarily attributable to an increase of $13.9 million in revenue-related costs, $6.4 million increase in hosting costs, $4.5 million in domain cost, $1.6 million in amortization costs and $0.2 million in acquisition-related costs. This increase was partially offset by a decrease of $2.6 million in payroll expenses, consisting of $2 million decrease due to lower average headcount throughout 2025, and a $0.6 million decrease in share-based compensation expenses, and an additional decrease of $0.2 million related to allocated overhead expenses and other costs.
Cost of Business Solutions Revenue
Cost of Business Solutions Revenue increased by $47.9 million, or 14%, from $351.2 million in 2024 to $399.1 million in 2025. This increase was primarily attributable to an increase of $47.3 million in revenue-related costs, $2 million in hosting costs and $0.2 million in amortization costs. This increase was partially offset by a decrease of $0.8 million in payroll expense consisting of $1.1 million decrease due to lower average headcount throughout 2025 and $0.3 million increase in share-based compensation expenses, and a decrease of $0.9 million related to allocated overhead expenses and other costs due to reduced activities.
Research and Development
Research and development expenses increased by $150.2 million, or 30%, from $495.3 million in 2024 to $645.5 million in 2025. This increase was primarily attributable to an increase of $113.8 million in acquisition-related expenses mainly attributed to our acquisition of Base44, $22.4 million in payroll expenses, consisting of $21.4 million due to high average headcount throughout 2025 and a $1 million increase in share-based compensation expenses. Research and development expenses were also affected by an increase of $14.3 million related to allocated overhead expenses and other development costs, offset by a decrease of $0.2 million in hosting costs.
Selling and Marketing
Selling and marketing expenses increased by $88.8 million, or 21%, from $425.5 million in 2024 to $514.3 million in 2025. The increase was primarily attributable to an increase of $74.1 million in user acquisition costs and other marketing activities mainly due to Base44 marketing expenses, from $175.6 million in 2024 to $243.6 million in 2025. In addition, the increase in selling and marketing expenses was attributable to an increase of $8.7 million related to allocated overhead expenses and other selling and marketing expenses, $4.7 million in processing costs paid to our payments processors, $2.2 million on payroll expenses, consisting of $4 million due to high average headcount throughout 2025 and a $1.8 million decrease in share-based compensation expense, and an increase of $0.3 million in acquisition related expenses. This was partially offset by a decrease of $1.0 million in amortization expenses.
General and Administrative
General and administrative (“G&A”) expenses increased by $20.0 million, or 11%, from $175.1 million in 2024 to $195.2 million in 2025. This increase was primarily attributable to an increase of $17.3 million in acquisition-related expenses, an increase of $7.2 million related to allocated overhead expenses and other G&A activities. This was partially offset by a decrease of $4.4 million in payroll expenses, consisting of a decrease of $2 million due to lower average headcount and a decrease of $2.4 million in share-based compensation expenses.
Financial Income (Expenses), Net
Financial expenses, net in 2025 decreased by $56.8 million from financial income, net of $51.8 million in 2024 to financial expenses, net of $5.0 million in 2025. Financial expenses, net in 2025 primarily related to $43.1 million of expenses related to hedging activities, expenses of $8.1 from currency exchange rate differences and bank charges, and expenses of $3.8 million related to the amortization of convertible debt issuance costs. This was partially offset by $48.9 million of income from deposit interest and certain investments and income of $1.1 million from evaluation of our holdings in privately held companies.
Financial income, net in 2024 primarily related to $42.0 million of income from deposit interest and certain investments and income of $2.5 million from evaluation of our holdings in a publicly held company, and income of $6.5 million related to hedging activities. In addition we recorded expenses of $3.2 million related to the amortization of convertible debt issuance costs and net income of $4.0 million due to exchange rate differences and bank charges.
Income Tax Benefit (Expense)
Income tax benefit increased by $64.7 million from expenses of $13.6 million in 2024 to benefit of $51.0 million in 2025. The increase in income tax benefit in 2025 compared to 2024 is primarily attributable to the release of valuation allowance on our deferred tax assets, reflecting our transition to profitability on a cumulative GAAP basis and our expectations of future taxable income.
Key Financial and Operating Metrics
We monitor the following key operating and financial metrics to evaluate the growth of our business, measure the effectiveness of our marketing efforts, identify trends affecting our business, formulate financial projections and make strategic decisions.
Bookings
Bookings include cash receipts for creative subscriptions purchased by registered users as well as cash we collect for business solutions, as well as payments due to us under the terms of contractual agreements for which we may have not yet received payment. Bookings is calculated by adding the change in deferred revenues and the change in unbilled contractual obligations we secure from third parties for a particular period to revenues for the same period. Unbilled contractual obligations are commitments of third parties to make certain payments, which are recognized as revenue as we fulfill our obligation under the terms of the contractual agreement. The commitment amount for the upcoming 12 months is recognized as short-term accounts receivable and deferred revenue, and the remaining commitment amount will be recorded in our bookings as unbilled contractual obligations. We believe that bookings is a leading indicator of our revenue growth and the growth of our overall business. Bookings is a non-GAAP financial measure. The following tables reconcile bookings to revenue, the most directly comparable U.S. GAAP measure, for the periods presented:
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Year Ended |
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December 31, |
| Reconciliation of Revenues to bookings: |
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2025 |
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2024 |
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(in USD thousands) |
| Revenues |
|
$ |
1,993,044 |
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|
$ |
1,760,650 |
|
| Change in deferred revenues |
|
103,895 |
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|
74,450 |
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| Change in unbilled contractual obligations |
|
(27,050) |
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|
(5,048) |
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| Bookings |
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$ |
2,069,889 |
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$ |
1,830,052 |
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Year Ended |
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|
December 31, |
| Reconciliation of Creative Subscriptions Revenue to bookings: |
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2025 |
|
2024 |
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|
(in USD thousands) |
| Creative Subscriptions Revenues |
|
$ |
1,409,727 |
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|
$ |
1,264,975 |
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| Change in deferred revenues |
|
93,854 |
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|
55,518 |
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| Change in unbilled contractual obligations |
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(27,050) |
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|
(5,048) |
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| Creative Subscriptions Bookings |
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$ |
1,476,531 |
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$ |
1,315,445 |
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Year Ended |
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December 31, |
| Reconciliation of Business Solutions Revenue to Bookings: |
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2025 |
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2024 |
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(in USD thousands) |
| Business Solutions Revenues |
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$ |
583,317 |
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$ |
495,675 |
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| Change in deferred revenues |
10,041 |
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|
18,932 |
|
| Business Solutions Bookings |
$ |
593,358 |
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|
$ |
514,607 |
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Annualized Recurring Revenue
Creative Subscriptions Annualized Recurring Revenue (ARR) is calculated as Creative Subscriptions Monthly Recurring Revenue (MRR) multiplied by 12. Creative Subscriptions MRR is calculated as the total of (i) the total monthly revenue of all Creative Subscriptions (including Base44) in effect on the last day of the period, other than domain registrations; (ii) the average revenue per month from domain registrations multiplied by all registered domains in effect on the last day of the period; and (iii) monthly revenue from other partnership agreements including enterprise partners, in effect in the last month of the period. We believe that ARR is a leading indicator of our anticipated Creative Subscription revenues as it captures both the growth we generate from the number of premium subscriptions as well as the amount of revenue we generate per premium subscription. Our Creative Subscriptions ARR increased to $1.52 billion in 2025 compared to $1.34 billion in 2024, an increase of 13%, driven by a significant increase in our revenue per premium subscription.
Business Solutions Annualized Recurring Revenue (ARR) is calculated as Business Solutions Monthly Recurring Revenue (MRR) multiplied by 12. Business Solutions MRR is calculated as the total monthly revenue of Business Solutions subscriptions in effect on the last day of the period. Business Solutions subscriptions include subscriptions such as Google Workspace, Email Marketing, recurring paid ads and more. Including recurring Business Solutions ARR the overall ARR at the end of 2025 was $1.84 billion.
Free cash flow
We define free cash flow as net cash provided by operating activities less capital expenditures. We believe that free cash flow is useful in evaluating our business because free cash flow reflects the cash surplus available or used to fund the expansion of our business after the payment of capital expenditures relating to the necessary components of ongoing operations. Capital expenditures consist primarily of investments in leasehold improvements for our office space and the purchase of computers and related equipment. Free cash flow is a non-GAAP financial measure.
The following tables reconcile free cash flow to net cash provided by operating activities, the most directly comparable U.S. GAAP measure, for the periods presented:
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|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2025 |
|
2024 |
|
|
(in USD thousands) |
| Reconciliation of net cash provided by operating activities to free cash flow: |
|
|
|
|
| Net cash provided by operating activities |
|
582,858 |
|
|
497,415 |
|
| Capital expenditures |
|
(9,901) |
|
|
(19,336) |
|
| Free cash flow |
|
572,957 |
|
|
478,079 |
|
Number of registered users at period end
We define this metric as the total number of users, who are registered with Wix.com or Base44 with a unique e-mail address and begin the process of building a website on Wix.com or an application on Base44, at the end of the period. The length of time that users take following registration to design and publish a website varies significantly from hours to years, and many registered users never publish a website. We view the number of registered users at the end of a given period as the strength of our pipeline that can generate premium subscriptions over time and enable us to increase our revenues. Total registered users were 304.2 million at the end of 2025 compared to 282.4 million at the end of 2024, an increase of 8%. These numbers exclude users who use and/or purchase stand-alone products such as Wix Logo Maker and users of DeviantArt or other subsidiaries, until they begin the process of building a website with Wix.
Number of premium subscriptions at period end
We define this metric as the total monthly, yearly and multi-year premium subscriptions as of the end of the period. A premium subscription can be purchased by a user or by one of our partners for their own use or on behalf of a user. A single registered user can purchase multiple premium subscriptions. We believe that the performance of our Creative Subscriptions segment, which is mostly comprised of revenues generated from the sale and retention of premium subscriptions, is best reflected using the ARR metric that combines both the effect of our premium subscription growth and the growth of our revenues per subscription. Total premium subscriptions were 6.1 million as of December 31, 2025 compared to 6.2 million as of December 31, 2024, a decrease of 1%. Our strategic focus on higher-value users resulted in fewer gross subscription additions. Given our continued transition toward higher long-term value users, we believe total number of premium subscriptions at year end is no longer the best measure to reflect the underlying strength of our business. While we may provide updates at certain points in the future, we will no longer provide our total number of premium subscriptions on a regular basis.
B. Liquidity and Capital Resources
We have financed our operations primarily through the proceeds from the issuance of our securities and cash flows from operations. In November 2013, we closed our IPO, resulting in net proceeds to us of approximately $93.6 million, and in June and July of 2018, we sold $442.75 million aggregate principal amount of our Convertible Notes due 2023 (the “2023 Convertible Notes”) (which were fully repaid as of July 1, 2023), and in August of 2020, we sold $575.0 million aggregate principal amount of our Convertible Notes due 2025 (the “2025 Convertible Notes”) (which were fully repaid as of August 15, 2025). In September 2025, we sold $1.15 billion aggregate principal amount of 0.00% Convertible Senior Notes due 2030 (the “2030 Convertible Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act (all of which were outstanding as of December 31, 2025). As discussed below under “—Recent Developments,” on March 5, 2026, we issued an aggregate of 3,266,699 ordinary shares and Warrants in respect of an additional 816,674 ordinary shares (which are to be settled by net share settlement or cash settlement, at our election, upon exercise) to the Purchasers in the Private Placement for gross proceeds of approximately $260.0 million (upsized from the $250.0 million previously announced), before deducting placement agent fees and offering expenses. Also as discussed below under “—Recent Developments,” on March 3, 2026, we entered into a Credit Facility Agreement, which provides for a revolving facility in an aggregate amount of $500 million to be drawn in up to two draws from April 1, 2026 to March 31, 2027.
As of December 31, 2025, we had $311.4 million of cash and cash equivalents, $5.5 million in restricted cash and $385.3 million in short-term deposits with a maturity date of less than one year. In addition, we had $0.2 million as restricted deposits that consisted of restricted bank deposits for our leases and also deposits to secure our online merchant activity with one of our billing processors, and we had $958.1 million in short and long-term investments in marketable securities.
A substantial source of our cash provided by operating activities is our cash collections from our premium subscriptions, a portion of which is reflected in our deferred revenues, which is included on our consolidated balance sheet as a liability. Deferred revenues consist primarily of the unrecognized portion of upfront payments from our premium subscriptions as well as domain name registration sales, and certain business solutions. We assess our liquidity, in part, through an analysis of the anticipated recognition of deferred revenues into revenues, together with our other sources of liquidity. As of December 31, 2025, we had positive working capital of $211.4 million, which included $737.3 million of short-term deferred revenues. These deferred revenues remain unrecognized generally for one to 12 months, and will be recognized as revenues ratably over the term of the service period when all of the revenue recognition criteria are met in accordance with our revenue recognition policy.
We believe our existing cash and cash equivalents, short-term deposits and marketable securities, and cash from operations will be sufficient to fund our operations and meet our requirements for at least the next 12 months and for the foreseeable future. For more information regarding our Three-Year Plan, see Item 5. “Operating and Financial Review and Process—Company Overview—Three-Year Financial Plan.”
Our capital expenditures for fiscal years 2025, 2024 and 2023 amounted to $9.9 million, $19.3 million and $66.0 million, respectively. We expect to spend between approximately $25 million to $30 million in 2026 for capital expenditures. In September 2030, our 2030 Convertible Notes will mature, and, depending on the price of our ordinary shares, we may need to pay the principal amount in cash. As of December 31, 2025, we had $1.15 billion aggregate principal amount of our 2030 Convertible Notes outstanding. For information regarding our convertible notes, including their maturity profile and interest rate structure, see Note 10 of our audited consolidated financial statements included in Item 18 of this annual report.
As of December 31, 2025, our future capital and working capital requirements will depend on many factors, including our rate of revenue growth and the timing and extent of our spending on selling and marketing activities and research and development efforts. We will be required to pay corporate income taxes derived from our business activity. We may also seek to invest in or acquire complementary businesses or technologies. To the extent that existing cash and cash equivalents, short-term deposits and marketable securities, cash from operations and net proceeds from the 2030 Convertible Notes are insufficient to fund our future activities, we may need to raise additional funding through debt and/or equity financing. Additional funds may not be available on favorable terms or at all. In addition, our available capital and liquidity will be restricted by our “modified Dutch Auction” tender offer, which is further discussed under “—Recent Developments.”
As of December 31, 2025, we had a lease commitment of approximately $415 million over the course of 18 years related to our new headquarters offices in Tel Aviv. We began occupying a portion of our headquarters in October 2022 and took occupancy of the entire headquarters in October 2023. The initial term of the lease agreement is 10 years commencing on the transfer of possession with an option to extend the lease for additional periods of up to 15 years, subject to the conditions of the lease agreement. See the description of the lease agreement in Note 11 of the audited financial statements included in Item 18 of this annual report.
We believe our levels of working capital are sufficient for our present requirements.
Cash Flows
The following table presents the major components of net cash flows for the periods presented:
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|
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|
|
|
|
|
|
Year Ended December 31, |
|
2025 |
2024 |
2023 |
|
(in USD thousands) |
Net cash provided by operating activities |
582,858 |
|
497,415 |
|
248,246 |
|
Net cash provided by (used in) investing activities |
(902,148) |
|
(35,466) |
|
566,714 |
|
Net cash used in financing activities |
(42,998) |
|
(406,726) |
|
(450,024) |
|
Net Cash Provided by Operating Activities
Net cash provided by operating activities increased by $85.4 million in 2025 compared to 2024, primarily resulting from improvement in our cost efficiency during the year. Our primary source of cash from operating activities has been cash collections from our premium subscriptions. Our primary uses of cash from operating activities have been selling and marketing expenses, personnel and related overhead costs and other costs related to the provision of our services. We expect cash inflows from operating activities to be affected by increases in sales and the timing of bookings. We expect cash outflows from operating activities to be affected by increases in marketing and increases in personnel costs as we grow our business.
For the year ended December 31, 2025, operating activities provided $582.9 million in cash, primarily resulting from $323.2 million as an adjustment of non-cash charges, primarily related to share-based compensation expenses, depreciation and amortization, an increase of $155.8 million in accrued expenses, prepaid expenses and other current liabilities, and an increase of $103.9 million in short- and long-term deferred revenue balances due to an increase in bookings from our premium subscriptions.
For the year ended December 31, 2024, operating activities provided $497.4 million in cash, primarily resulting from increases of $74.5 million in short- and long-term deferred revenue balances due to an increase in bookings from our premium subscriptions, and $410.8 million as an adjustment of non-cash charges, primarily related to share-based compensation expenses, and from a decrease in the value of our investment in a publicly held company, depreciation, net income and amortization, and changes of $12.1 million in accrued expenses, prepaid expenses and other current liabilities.
Net Cash Provided by (Used in) Investing Activities
Net cash provided by (used in) investing activities was $(902.1) million, $(35.5) million and $566.7 million in 2025, 2024 and 2023, respectively. Investing activities have consisted primarily of investment and proceeds from available-for-sale marketable debt securities and trading marketable debt securities, and investment and proceeds from short-term and restricted deposits. In addition, during 2025, the Company purchased two new companies for a total of $23.9 million.
Net Cash Used in Financing Activities
Net cash used in financing activities was $43.0 million, $406.7 million and $450.0 million in 2025, 2024 and 2023, respectively. Financing activities in 2025 consisted primarily of net proceeds of $1.05 billion from the issuance of convertible senior notes and proceeds from the exercise of share options and from the Employee Stock Purchase Plan (“ESPP”) of $54.8 million, offset by repayment of 2025 Convertible note of $575.0 million and purchase of treasury shares of $575.0 million.
We do not believe there are any legal or economic restrictions on the ability of our subsidiaries to transfer funds to us in the form of cash dividends, payments from customers, loans or advances.
C. Research and Development, Patents and Licenses, etc.
Our research and development activities are primarily located in Israel, with additional employees and contractors engaged in research and development activities in Lithuania, the United States, Poland, Japan, Netherlands, Canada, Australia, Ukraine, and Germany. As a result of the military invasion of Ukraine by Russian forces that began in February 2022, some of our Ukrainian team members have relocated to other countries, and some have relocated within Ukraine. Our research and development department is comprised of 2,530 employees and contractors.
In 2025, research and development costs accounted for approximately 32.4% of our total revenues.
We employ a strategy of seeking patent protection for some of our technologies. We have filed a number of patent applications and continue to file for patents in the United States as well as in several additional jurisdictions worldwide to protect our inventions as well as PCT applications that may result in additional national applications. As of December 31, 2025, we have (together with our subsidiaries) a total of 356 issued patents (105 in the United States and 251 in other jurisdictions) and 190 pending patent applications (68 in the United States and 122 filed under PCT or in additional regions). We also have 28 issued design patents and 3 pending design patent applications. No patent or patent application is material to the overall conduct of our business. For a description of our research and development policies, see Item 4.B. “Information on the Company—Business Overview—Research and Development.”
The Investment and Development Authority for Economic and Industrial Development
The Investment and Development Authority for Economic and Industrial Development, or the Investment Authority, works to help and encourage employers to absorb new employees through different employment incentive programs. One of these programs is intended to incentivize employers in national priority areas to create high wage manufacturing and computing jobs. The grants are subject to meeting certain conditions, among others, that: (1) the company must be engaged in certain economic sectors; (2) the company's overall sales turnover in the two years preceding the application date must exceed NIS 15 million, which is approximately $4.7 million; (3) the company must hire at least 15 new employees during the program period; (4) the average monthly wage must be between one to two and a half times the median market wage to be paid during the periods as provided in each high wage employment program; and (5) 60% of the new employees engaged under the program must reside in Jerusalem and/or in national priority areas. We are not required to pay royalties to the Investment Authority.
We have one active high wage employment grant program from the Investment Authority and may apply for additional grants in the future.
During 2025, we did not receive any grants from any institution.
D. Trend Information
Other than as disclosed elsewhere in this annual report, including in Item 3.D. “Key Information—Risk Factors” and Item 5. “Operating and Financial Review and Prospects,” we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2025, that are reasonably likely to have a material effect on our total revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
E. Recent Developments
Credit Facility
On March 3, 2026, we entered into a Credit Facility Agreement with Hapoalim Bank Ltd. (the “Bank”), which provides for a $500 million credit facility, available to be drawn in up to two tranches between April 1, 2026 and March 31, 2027 (the “Credit Facility Agreement”), with the tenor of each drawdown to be determined on the date of the withdrawal.
Interest under the Credit Facility Agreement accrues at a variable rate based on monthly SOFR plus the TFSI Basis Bid plus an applicable margin. For the first $400 million drawn, the applicable margin until July 31, 2026 is 0.30% per annum and from August 1, 2026 until March 31, 2027 is 0.40%, and for the final $100 million drawn, the applicable margin is 1.05% per annum until July 31, 2026 and from August 1, 2026 until March 31, 2027 is 1.15%. Interest is payable monthly based on the then-outstanding amount, and principal is repaid upon the tenor of each drawdown. A commitment fee of $30,000 per month is payable until the final $100 million is drawn or cancelled.
We have the right to cancel the credit line at any time upon seven days’ notice to the Bank without penalty. We also have the right to prepay any outstanding amount at any time upon 30 days’ notice to the Bank.
The Credit Facility Agreement includes a financial covenant requiring the Company to maintain a Bank Debt to Free Cash Flow ratio not exceeding 2.0x.
"Bank Debt" is defined in the Credit Facility Agreement as the outstanding bank credit balance not secured by full cash collateral (credit exposure on the Company), excluding lease liabilities, guarantees, rent obligations, intercompany debt, and credit secured by full deposits.
"Free Cash Flow" is defined in the Credit Facility Agreement as cash flows from operating activities (as presented in the Company's financial statements) less capital expenditures, excluding one-time/non-recurring expenses.
As collateral, we are required to (i) maintain 1 billion NIS in Bank of Israel Bills deposited with the Bank, and (ii) maintain an existing $120 million cash deposit at the Bank, both held in a designated account. The Credit Facility Agreement also contains a negative pledge provision under which the Company agrees not to create a general floating charge on all or substantially all of its assets.
Private Placement
As previously disclosed, on March 4, 2026, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with one or more funds managed or advised by Durable Capital Partners LP (“Durable”)and certain other purchasers (collectively, the “Purchasers”).
Pursuant to the Purchase Agreement, on March 5, 2026, the Company issued and sold 3,266,699 units at a purchase price of $79.591 per unit. Each unit consists of one ordinary share and one warrant to purchase 0.25 of one ordinary share (the “Warrants”). In total, we issued an aggregate of 3,266,699 ordinary shares and Warrants in respect of 816,674 additional ordinary shares (which are to be settled by net share settlement or cash settlement, at our election, upon exercise) for gross proceeds of approximately $260.0 million (upsized from the $250.0 million previously announced, and including gross proceeds of approximately $162.5 million from the 2,041,688 ordinary shares and Warrants in respect of 510,422 additional ordinary shares issued to Durable), before deducting placement agent fees and offering expenses (the “Private Placement”).
Pursuant to the warrant agreement entered into by the Company with the Purchasers as the initial holders of the Warrants (collectively, the “Holders”), each Warrant has an exercise price per ordinary share equal to $104.73 per share, subject to customary anti-dilution adjustments. The exercise price and the number of ordinary shares issuable upon exercise of each Warrant is subject to appropriate adjustments in the event of certain share dividends and distributions, share splits, share combinations, reclassifications or similar events affecting our ordinary shares. The Warrants are exercisable from, and including May 5, 2026, to, and including the third anniversary of the closing date of the Private Placement (the “Closing Date”). Upon the exercise of each Warrant, the Company will pay or deliver, as applicable, to such Holder either (1) cash equal to the “in-the-money” value of such Warrant, if any, or (2) a number of ordinary shares equal to the “in-the-money” value such Warrant, if any, at the Company’s election. In the event that a Warrant is exercised during a specified period following the occurrence of customary “make-whole fundamental change” events, the Holder will receive an additional number of ordinary shares or the cash value of such ordinary shares, depending on the settlement method selected by the Company. The foregoing summary of the Warrants does not purport to be complete and is qualified in its entirety by reference to the Form of Warrant Agreement, filed as Exhibit 4.7 to this annual report.
Pursuant to the Purchase Agreement, on or after the date that is ten months after the Closing Date, a Purchaser may make a written request to the Company to file with the Securities and Exchange Commission a registration statement registering the resale of the ordinary shares issued to such Purchaser in the Private Placement and any ordinary shares issuable to such Purchaser upon the exercise of such Purchaser’s Warrants. We agreed to file such registration statement within 30 calendar days after the date of such request (or, in the case of a registration statement on Form F-1, 45 calendar days), provided that if we are a well-known seasoned issuer at such time and propose to file an automatically effective registration statement on Form F-3ASR, we will not be required to file such registration statement prior to the last business day immediately preceding the one-year anniversary of the Closing Date.
We also agreed to use commercially reasonable efforts to have such registration statement declared effective as soon as practicable after filing, provided that we will not be required to have such registration statement declared effective prior to the last business day immediately preceding the one-year anniversary of the Closing Date. We also agreed, among other things, to indemnify each Purchaser, each person, if any, who controls such Purchaser, each affiliate of such Purchaser, and each broker, placement agent or sales agent to or through which such Purchaser effects or executes the resale of any of the registered securities from certain liabilities.
In connection with the Private Placement, the Purchasers have entered into lock-up agreements pursuant to which they have agreed that they will not, among other things, and subject to certain exceptions, sell, transfer, or otherwise dispose of the ordinary shares and Warrants issued to them in the Private Placement, or any ordinary shares that may be issuable to them upon the exercise of the Warrants, during the period ending one year after the Closing Date, without the Company’s prior written consent.
In addition, each of our directors and executive officers have entered into lock-up agreements pursuant to which they have agreed that they will not, among other things, and subject to certain exceptions, sell, transfer, or otherwise dispose of any ordinary shares, or any securities convertible into or exercisable or exchangeable for ordinary shares during the period ending 90 days after the Closing Date without the Purchasers’ prior written consent.
The Private Placement was exempt from registration pursuant to Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering. The Purchasers have represented to us that they have acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends have been affixed to the securities issued in this transaction.
Tender Offer
On March 5, 2026, we commenced a “modified Dutch Auction” tender offer to purchase up to $1.75 billion in aggregate purchase price of our issued and outstanding ordinary shares, or such lesser aggregate purchase price of our ordinary shares as are properly tendered and not properly withdrawn, at a price not greater than $92 nor less than $80 per share to the tendering holder in cash, less any applicable withholding taxes and without interest. The tender offer is scheduled to expire at one (1) minute after 11:59 p.m., New York City time, on April 1, 2026, unless the offer is extended or terminated. The tender offer is subject to a number of terms and conditions.
F. Critical Accounting Estimates
Our accounting policies and their effect on our financial condition and results of operations are more fully described in our consolidated financial statements included elsewhere in this annual report. We have prepared our financial statements in conformity with U.S. GAAP, which requires management to make estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent assets and liabilities. These estimates are prepared using our best judgment, after considering past and current events and economic conditions. While management believes the factors evaluated provide a meaningful basis for establishing and applying sound accounting policies, management cannot guarantee that the estimates will always be consistent with actual results. In addition, certain information relied upon by us in preparing such estimates includes internally generated financial and operating information, external market information, when available, and when necessary, information obtained from consultations with third parties. Actual results could differ from these estimates and could have a material adverse effect on our reported results.
We believe that the accounting policies discussed below are critical to our financial results and to the understanding of our past and future performance, as these policies involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations.
Revenue Recognition
Our total revenues consist of Creative Subscriptions Revenues and Business Solutions Revenues. Arrangements with our customers do not provide the customers with the right to take possession of the software supporting our platform at any time and are therefore accounted for as service contracts. Our revenue recognition policy is consistent for sales generated directly with end customers and indirect sales generated through partners.
We recognize revenue when control of the promised products or services is transferred to a customer, in an amount reflecting the consideration we expect to be entitled to in exchange for these products or services. Revenue is recognized net of allowances for refunds, consideration payable to customers, and any taxes collected from customers, which are subsequently remitted to governmental authorities.
Our arrangements with customers may include multiple performance obligations. For arrangements with multiple distinct performance obligations, we allocate consideration to each distinct performance obligation based on its relative stand-alone selling price (“SSP”). We generally determine SSP based on observable selling prices.
We follow the guidance provided in ASC Topic 606, Revenues from Contracts with Customers (“ASC 606”), for determining whether we are a principal (i.e., report revenues on a gross basis) or an agent (i.e., report revenues on a net basis) in arrangements with customers that involve another party that contributes to providing specified products or services to a customer. We determine whether the nature of our promise is to provide the specified products or services itself (as a principal) or to arrange for those specified products or services to be provided by another party (as an agent), based on whether we control the specified products or services before they are transferred to the end customer. In making this determination, we evaluate indicators such as which party is primarily responsible for fulfillment and has discretion in determining pricing. This determination is reviewed for each specified service promised to the customer and may involve significant judgment. Revenues generated from the sale of domain name registrations and the sale of certain integrated solutions, including Google Workspace and Wix Payments, are typically recorded on a gross basis, meaning the amounts billed to customers are recorded as revenues and expenses incurred are recorded as cost of revenues, since we have determined that we control the promised products or services before they are transferred to the end customer. Revenues generated from the sale of third-party software applications are typically recognized on a net basis, as we have determined that we act as an agent in these arrangements.
Business Combinations
We account for business combinations in accordance with ASC Topic 805, Business Combinations (“ASC 805”). ASC 805 requires us to recognize the assets acquired, liabilities assumed and any non-controlling interests as of the acquisition date at their respective fair values. Any excess of the purchase price over the fair value of the identifiable net assets acquired is recorded as goodwill. If applicable, we recognize a contingent consideration liability at fair value as of the acquisition date and include it in the purchase price. The fair value of contingent consideration is estimated using a Monte Carlo simulation model, which incorporates significant unobservable inputs, including projected revenue-related metrics and revenue volatility. We remeasure the contingent consideration liability to fair value each reporting period based on updated assumptions, with changes recognized in the statement of comprehensive income within general and administrative expenses. Because these estimates involve significant judgment and are based on inherently uncertain forecasts, actual results may differ from our estimates.
During the measurement period, which may extend for up to one year from the acquisition date, we may record adjustments to the provisional fair values of the assets acquired and liabilities assumed, with a corresponding adjustment to goodwill. Upon the earlier of the end of the measurement period or the final determination of the fair values of the assets acquired and liabilities assumed, any subsequent adjustments are recorded in the statement of comprehensive income.
Income Taxes
We account for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”), using the liability method, whereby deferred tax assets and liabilities account balances are determined based on the differences between financial reporting and the tax basis for our assets and liabilities and for carry-forward tax losses, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We recognize a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value, if it is more likely than not that some portion of the entire deferred tax asset will not be realized.
In making such a determination, we consider all available positive and negative evidence, including results of recent operations, future reversals of existing taxable temporary differences, and projected future taxable income. We classify all deferred tax assets and liabilities as non-current on the consolidated balance sheets.
We recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. We recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A. Directors and Senior Management
The following table sets forth the name, age and position of each of our executive officers and directors as of March 5, 2026:
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Name |
Age |
Position |
Executive Officers |
|
|
Avishai Abrahami |
54 |
Co-founder, Chief Executive Officer, Director and Honorary Chairman |
Lior Shemesh |
56 |
Chief Financial Officer |
Nir Zohar |
48 |
President |
Omer Shai |
48 |
Chief Marketing Officer |
| Yaniv Even-Haim |
51 |
Chief Technology Officer |
| Shelly Meyer |
60 |
Chief People Officer |
| Directors |
|
|
Mark Tluszcz (4) |
59 |
Chairman of the Board |
Deirdre Bigley (1)(2)(3)(4) |
61 |
Director |
Allon Bloch (4) |
56 |
Director |
Francesco de Mojana (1)(4) |
56 |
Director |
Ron Gutler (1)(2)(3)(4)(5) |
68 |
Director |
Gavin Patterson (2)(4) |
58 |
Director |
Ferran Soriano (4) |
58 |
Director |
____________
(1) Member of our audit committee
(2) Member of our compensation committee
(3) Member of our nominating, governance and environmental committee
(4) Independent director under the rules of NASDAQ
(5) Lead independent director
Executive Officers
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Avishai Abrahami
Co-founder, CEO and Director
Age: 54
Director Since 2006
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Qualifications and Expertise
As co-founder of Wix, Mr. Abrahami has significant institutional knowledge of its operations over his 19 years as Chief Executive Officer. In addition, he has co-founded other software companies, where he has developed, scaled and brought innovative solutions to market. His broad experience helps the board of directors provide effective oversight of the Company’s business strategy in a fast-evolving software market.
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Experience
Wix.com Ltd.
•Co-founder, Chief Executive Officer (2006 – Present)
•Co-Chief Executive Officer (2006 – 2010)
•Board Chair (2013 – 2016), Honorary Chair (2016)
Arel Communications & Software Ltd.
•VP of Strategic Alliances (2004 – 2006) of a private Israeli communication technology company
Sphera Corporation
•Co-founder, Chief Technology Officer (1998 – 2000) of a private company that develops software for managing data centers
•VP of Product Marketing (2000 – 2003)
AIT Ltd.
•Co-founder, Chief Technology Officer (1993 – until its sale in 1997) of a private Israeli software company
Outside Boards
Public Companies
•Director, Monday.com Ltd. (2012 – Present), a work management and productivity app
•Director, SodaStream International Ltd. (2016 – until its sale to PepsiCo Inc. in 2017)
Other
•Israeli Defense Forces’ elite computer intelligence unit (1990 – 1992)
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Lior Shemesh
Chief Financial Officer
Age: 56
Chief Financial Officer Since 2013
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Qualifications and Expertise
With over 20 years of financial leadership experience, Mr. Shemesh is a driving force behind the Company's financial strategy and operational excellence.
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Experience
Wix.com Ltd.
•Chief Financial Officer (2013 – Present)
Alvarion Ltd.
•Chief Financial Officer (2010 – 2013)
•Vice President of Finance (2008 – 2010)
Veraz Networks Inc.
•Vice President of Finance (2003 – 2008) of a provider of softswitch, media gateway and digital compression solutions
ECI Telecom Ltd.
•Associate Vice President of Finance of the Broadband division (2000 – 2003) of a network infrastructure provider
Outside Boards
Public Companies
• Director, eToro Group Ltd. (2025 – Present), a trading and investing platform
Education
B.A. in Accounting and Economics from Bar-Ilan University
M.B.A. from Bar-Ilan University
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Nir Zohar
President
Age: 48
President Since 2013; Chief Operating Officer from 2008 until 2025
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Qualifications and Expertise
Mr. Zohar is known for his exceptional leadership skills and collaborative approach, fostering a culture of innovation, teamwork, and accountability throughout the organization. His strategic mindset and ability to execute complex initiatives have been instrumental in driving growth and profitability for the Company.
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Experience
Wix.com Ltd.
•President (2013 – Present)
•Chief Operating Officer (2008 – 2025)
M.B. Contact Ltd.
•Budget and Production Manager (2005 – 2007) of a private Israeli event production company
The Israeli Scouts
•Central Leader and Regional Headquarters Senior Staff (2001 – 2005)
The Israeli Navy
•Lieutenant Commander and Chief Engineer (1995 – 2001)
Outside Boards
Public Companies
•Fiverr International Ltd. (2014 – Present), a global online marketplace for freelance services
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Omer Shai
Chief Marketing Officer
Age: 48
Chief Marketing Officer Since 2013
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Qualifications and Expertise
Mr. Shai is recognized for his creativity, strategic vision, and ability to drive marketing initiatives that resonate with target audiences. He has a deep understanding of consumer behavior and market trends, enabling him to identify opportunities for growth and differentiation in competitive landscapes.
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Experience
Wix.com Ltd.
•Chief Marketing Officer (2013 – Present)
•Vice President of Marketing (2010 – 2013)
Hyperactive
•Co-Founder (2005 – 2008) of a digital design company
Hackersoftware
•Marketing Director (2000 – 2003) of a software company
Education
B.Sc. in Economics from The Academic College of Tel Aviv, Yaffo
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Yaniv Even-Haim
Chief Technology Officer
Age: 51
Chief Technology Officer Since 2020
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Qualifications and Expertise
Mr. Even-Haim is recognized for his strategic vision, technical proficiency, and commitment to driving business results through technology. He has a proven track record of leveraging technology to solve complex challenges, drive competitive advantage, and helping to position the Company as a leader in the digital age.
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Experience
Wix.com Ltd.
•Chief Technology Officer (2020 – Present)
•Vice President of Research and Development (2010 – 2020)
Pudding Media Inc.
•Vice President of Product (2009 – 2010) of a mobile advertising solutions company
Comverse, Inc.
•Head of Research and Development (2001 – 2009) of a provider of communications software
EverAd, Inc.
•Director of Research and Development (1998 – 2001) of a music and advertising company
Education
B.Sc. in Computers from The Technion - Israel’s Institute of Technology
M.B.A. from The Technion - Israel’s Institute of Technology
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Shelly Meyer
Chief People Officer
Age: 60
Chief People Officer
Since 2020
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Qualifications and Expertise
Mrs. Meyer brings over 20 years of HR experience and has been instrumental in shaping the work force of several prominent U.S. and Israeli tech companies. Since joining in 2010, Mrs. Meyer has been the driving force behind Wix successfully maintaining a highly professional and close-knit team.
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Experience
Wix.com Ltd.
•Chief People Officer (2020 – Present)
•VP Human Resources (2010 – 2020)
Applied Materials
•Head of Human Resources and Managing Director (2007 – 2009)
Marvell Semiconductor
•Director of Human Resources (2006 – 2008)
BackWeb Technologies
•VP Human Resources (2000 – 2005) of a company that offered data, content and applications solutions
Rad-Bynet Group
•VP Human Resources (1994 – 1999), a data communications solutions business
Education
B.A. in political science from the Tel Aviv university
M.B.A. from Tel-Aviv University School of Business Administration with a specialization in Organizational Behavior
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Directors
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Mark Tluszcz
Independent Board Chair
Age: 59
Director Since 2010
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Qualifications and Expertise
Mr. Tluszcz has more than 20 years of experience in the stewardship of successful early-stage investments in the technology sector, such as Skype and Wix. He provides our board of directors with the expertise to help ensure capital is allocated to areas of the business with the highest growth and profit potential, and that Wix maintains the talent and culture necessary to create and scale innovative technology solutions.
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Experience
Mangrove Capital Partners
•Co-founder and CEO (2000 – Present) of a venture capital firm focused on early-stage investments in technology companies
Outside Boards
Private Companies
•Director, JobToday S.A. (2015 – Present)
•Director & Board Chair, K Health Inc. (2017 – Present)
•Director, TBOL Limited (2017 – Present)
•Director, Red Points Solutions, S.L. (2019 – Present)
Other
•Named to the Forbes Midas List in 2007, 2008 and 2009 as one of the top 100 global deal makers in technology
•Named by PaperJam Magazine as one of the 100 most influential persons in Luxembourg in 2012, 2014 and 2022
Education
B.A. with honors, Eckerd College
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Deirdre Bigley
Independent Director
Age: 61
Director Since 2017
Board Committees:
Audit Committee
Compensation Committee
Nominating, Governance and Environmental Committee
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Qualifications and Expertise
Ms. Bigley has over three decades of senior leadership experience in global marketing and branding in large, complex organizations. Her expertise strengthens the board of directors’ oversight of the Company’s business strategy, particularly as it pertains to its marketing and branding of new products to a global audience.
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Experience
Bloomberg, L.P.
•Chief Marketing Officer (2014 – 2021)
•Head of Marketing Communications (2009 – 2014)
IBM
Positions of increasing responsibility over her 13-year tenure, including
•Vice President of Worldwide Brand (2008 – 2009)
•Vice President of Worldwide Advertising and Interactive (2003 – 2008)
Outside Boards
Public Companies
•Director, Taboola.com Ltd. (2021 – 2025), a technology platform company that powers recommendations for the open web
•Director, Sportradar Group AG (2021 – Present), a global provider of sports betting and sports entertainment products and services
•Director, Shutterstock, Inc. (2016 – Present), a global provider of commercial imagery and music
Education
B.A. in English Literature, West Chester University
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Allon Bloch
Independent Director
Age: 56
Director Since 2016
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Qualifications and Expertise
For over twenty years, Mr. Bloch has held executive and advisory roles at high-growth technology companies. He has been a co-founder of multiple disruptive start-ups, having successfully led them through critical phases of product and market development. He brings valuable expertise and perspective to the board of directors as Wix’s business strategy is focused on disruptive product-led growth.
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Experience
K Health Inc.
•Co-Founder and Chief Executive Officer (2016 – Present), of digital health company
Vroom Inc.
•Co-Founder and Chief Executive Officer (2014 – 2016), of this leading online U.S. car retailer
Dolphin Software Ltd. (dba mySupermarket)
•Chief Executive Officer (2010 – 2014), of this private online grocery shopping company
Wix.com Ltd.
•Director (2008 – 2013), member of audit committee (2018 – 2023)
•President, Co-Chief Executive Officer (2008 – 2010)
Greylock Partners
•Advisor (2012 – 2015) to Israel and Europe Fund, of this venture capital firm focused on technology start-ups
Jerusalem Venture Partners
•Principal and General Partner (2000 – 2007), of this early-stage venture capital firm based in Israel
Outside Boards
Private Companies
•Director, K Health Inc. (2016 – Present)
•Director, Genoox (2016 – 2019), a genomic data management platform
Education
B.Sc. in Biology, Tel-Aviv University
M.B.A., Columbia University Business School
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Francesco de Mojana
Independent Director
Age: 56
Director Since March 2023
Board Committees:
Audit Committee
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Qualifications and Expertise
Mr. de Mojana brings over 25 years of experience as both an entrepreneur in the software technology space and investor responsible for numerous private equity investments. With a strong track record of successfully implementing operating efficiencies that drove margin expansion and profitability, he brings a valuable skill set to the board of directors as the Company focuses on balancing growth with sustained profitability.
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Experience
Buono Ventures
•Founder, Chief Executive Officer (2019 – Present), of the Italian-based venture capital firm
Permira
•Partner (2004 – 2018), of this global private equity firm
Eloft
•Co-founder, Chief Operating Officer (2000 – 2002), of this software knowledge management solution company later sold to Telefonica Group
McKinsey & Company
•Management consultant (1997 – 2000)
Education
B.A. in International Economics, Università Bocconi (Milan)
M.B.A., Columbia University Business School
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Ron Gutler
Lead Independent Director
Age: 68
Director Since 2013
Board Committees:
Audit Committee - Chair
Compensation Committee - Chair
Nominating, Governance and Environmental Committee - Chair
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Qualifications and Expertise
Mr. Gutler has significant capital markets expertise and board experience across fast-growing technology companies. He brings to the board of directors a deep understanding of financial and accounting matters, as well as risk management expertise, and contributes seasoned leadership to the board of directors and its committees.
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Experience
Blue Border Partners
•Co-founder, (2000 – 2002), of the Blue Border Horizon Fund, a global macro fund
Bankers Trust Company (currently part of Deutsche Bank)
•Partner, Managing Director (1987 – 1999), where he established and led the Israeli office and headed the Global Emerging Markets Trading and Sales
Outside Boards
Public Companies
•Director, Fiverr International Ltd. (2019 – Present), a global online marketplace for freelance services
•Director, CyberArk Software Ltd. (2014 – Present), an identity security company
•Board Chair, NICE Systems Ltd. (2002 – 2013), a global company specializing in contact center software, artificial intelligence and digital and workforce engagement management solutions
Private Companies
•Director, WalkMe Ltd. (2020 – 2024), a software company offering a Digital Adoption Platform
•Board Chair, G.J.E. 121 Promoting Investment Ltd. (2000 – 2011), a real estate company
Education
B.A. in Economics and International Relations and M.B.A., Hebrew University in Jerusalem
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Gavin Patterson
Independent Director
Age: 58
Director Since March 2023
Board Committees:
Compensation Committee
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Qualifications and Expertise
Mr. Patterson has decades of extensive operating experience across software, media, telecommunications and technology. He has a proven track record of expanding and scaling up business both in leadership roles at Salesforce and at BT Group, where he led the rollout of the UK’s national fiber network, led the £15 billion acquisition of the UK’s biggest mobile provider, EE, launched the sports broadcasting channel, BT Sport, and expanded BT’s cyber security practice. His vast experience will help to oversee and guide the management team as the Company continues to grow.
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Experience
Salesforce.com
•President and Chief Strategy Officer (Aug 2022 – Jan 2023)
•President and Chief Revenue Officer (2020 – 2022)
•Chairman Europe, Middle East and Africa (2019 – 2020)
BT Group plc Group
•Chief Executive (2013 – 2019), of one of the UK’s largest telecommunications and network providers Executive Director
•BT Retail CEO (2008 – 2013) Group Managing Director
•Consumer and Chief Marketing Officer (2004 – 2008)
Outside Boards
Public Companies
•Director, Ocado Group plc (June 2024 – Present), an AIM-listed global software and robotics platform providing a unique solution for online grocery
•Board Chair, Elixirr International plc (2019 – Present), an AIM-listed business consulting firm
•Director, BT Group plc (2013-2019)
Private Companies
•Director, AppLogic Networks (March 2025 – Present), a provider of cloud-based, AI-powered software solutions for network intelligence
•Director, Callsign (March 2025 – Present), a provider of cybersecurity, authentication, and fraud prevention
•Chair, Kahoot! (March 2024 – Present), an online game-based learning platform
•Director, Mobileum (2022 – Present), a leading provider of analytics solutions for the telecom industry
•Director, Fractal Analytics (2019 – Present), a provider of artificial intelligence and advanced analytics
Other
•Member, Governing Council of The London School of Economics
•Chair, Alzheimer’s Research UK
Education
MEng in Chemical Engineering, Cambridge University
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Ferran Soriano
Independent Director
Age: 58
Director Since 2020
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Qualifications and Expertise
Over his career Mr. Soriano has transformed small organizations into global commercial successes. In the five years under his leadership, FC Barcelona more than doubled its sales, returned to profitability and signed a landmark charity deal with UNICEF. Similarly, when he joined CFG, he began with one football club, Manchester City F.C., and over his tenure, has expanded into total or partial ownership of 13 football clubs all over the world. His experience strengthens the board of directors’ oversight of management and its ability to drive profitable global growth.
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Experience
City Football Group (CFG)
•Chief Executive Officer (2012 – Present), of a global leading private owner and operator of football clubs, with total or partial ownership of 13 clubs in major cities across the world
FC Barcelona
•Vice Chairman and Chief Executive Officer (2003 – 2008)
Cluster Consulting (a/k/a DiamondCluster)
•Co-founder, Partner (1994-2003), of the management consulting firm
Outside Boards
Public Companies
•Director, Ollamani, S.A.B. (2024 – Present), a provider of professional sports services, games and raffles, publication and distribution of magazines
Private Companies
•Board Chair, Spanair (2009 – 2012)
Education
B.B.A, M.B.A., ESADE (Barcelona), with related studies at Rensselaer Polytechnic Institute (New York) and Université Catholique de Louvain (Belgium)
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Our Co-founder, Chief Executive Officer and Director, Avishai Abrahami, and our Chief Architect of Research and Development, Yoav Abrahami, are brothers. In addition, our President, Nir Zohar, is married to our VP Design & Brand, Hagit Kaufman - Zohar. Other than the relationships noted above, there are no family relationships among any of our directors or executive officers.
B. Compensation
Compensation of Directors and Executive Officers
The aggregate compensation paid by us to our directors and executive officers as a group, including share-based compensation, was approximately $40.3 million for the year ended December 31, 2025. This amount does not include amounts accrued for expenses related to business travel, professional and business association dues and other business expenses reimbursed to officers. This amount includes approximately $0.6 million set aside or accrued to provide pension, severance, retirement or similar benefits or expenses.
The aggregate share-based compensation expenses for the year ended December 31, 2025 recorded in our financial statements in respect of grants of options and RSUs, as well as participation in our ESPP, for our directors and executive officers as a group is comprised of (i) options to purchase 690,340 ordinary shares with exercise prices ranging from $121.30 to $259.16 per share, and (ii) 883,122 RSUs, of which 122,417 RSUs accounted for the achievement of performance targets for fiscal year 2024, which we recorded as share-based compensation for the year ended December 31, 2024, but were only granted in 2025.
The following is a summary of the salary expenses and social benefit costs of our five most highly compensated office holders in 2025, or the Covered Executives. All amounts reported reflect the cost to the Company as recognized in our financial statements for the year ended December 31, 2025.
Mr. Avishai Abrahami, Chief Executive Officer and Director. Compensation expenses recorded in 2025 of $521,000 in salary expenses and $206,000 in social benefit costs.
Mr. Nir Zohar, President and Chief Operating Officer. Compensation expenses recorded in 2025 of $440,000 in salary expenses and $118,000 in social benefit costs.
Mrs. Shelly Meyer, Chief People Officer. Compensation expenses recorded in 2025 of $382,000 in salary expenses and $102,000 in social benefit costs.
Mr. Lior Shemesh, Chief Financial Officer. Compensation expenses recorded in 2025 of $367,000 in salary expenses and $103,000 in social benefit costs.
Mr. Omer Shai, Chief Marketing Officer. Compensation expenses recorded in 2025 of $471,000 in salary expenses and $22,000 in social benefit costs.
The salary expenses summarized above include the gross salary paid to the Covered Executives, and the benefit costs include the social benefits paid by us on behalf of the Covered Executives, including convalescence pay, contributions made by the Company to an insurance policy or a pension fund, work disability insurance, severance, educational fund, annual bonus and payments for social security.
From time to time, we may grant options, PSUs, RSUs and other awards under our share incentive plans (described below) to our executive officers and directors. See Item 6.C. “Directors, Senior Management and Employees—Board Practices” for a detailed description of the approval procedures we follow in compensating our directors and executive officers.
During 2025, we granted our directors and executive officers options to purchase an aggregate of 40,515 ordinary shares and/or 163,907 RSUs under our share incentive plans (which does not include 122,417 RSUs accounted for the achievement of performance targets for fiscal year 2024, which were only granted in 2025 but for which we recorded share-based compensation for the year ended December 31, 2024). The exercise price of these options which were granted to our CEO and our COO is $229.02, with an expiration date of 10 years from the date of grant or 90 days after the termination of the engagement with the Company, whichever is earlier. During 2025, director equity grants, which consisted solely of RSUs were subject to a vesting schedule over a one-year period. The executive officers’ equity grants of 2025 are subject to a vesting schedule over a four-year period, with the PSUs also being subject to predetermined Company performance criteria set by the Company’s compensation committee and board of directors. We recorded equity-based compensation expenses in our financial statements for the year ended December 31, 2025, which include options, PSUs, and RSUs granted in 2025 and RSUs granted in the first quarter of 2025 on account of performance targets achieved for fiscal year 2024 and for which we recorded equity-based compensation expenses in 2025 to Avishai Abrahami and Nir Zohar on account of option and PSU grants, and Lior Shemesh, Omer Shai and Shelly Meyer, on account of RSU and PSU grants of $6,796,541, $6,332,184, $2,158,254, $2,339,995 and $1,718,335, respectively.
The relevant amounts underlying the equity awards granted to our officers during 2025, will continue to be expensed in our financial statements over a four-year period during the years 2025-2028 on account of the 2025 grants in similar annualized amounts, apart from performance-based equity which is expensed on an accelerated basis. Assumptions and key variables used in the calculation of such amounts are described in Note 12 of our audited consolidated financial statements included in Item 18 of this annual report. All equity-based compensation grants to our Covered Executives were made in accordance with the parameters of our company’s executive compensation policy, which includes maximum equity compensation thresholds, and were approved by the Company’s compensation committee and board of directors.
Compensation Policy for Non-Executive Directors
In December 2022, our shareholders amended and re-adopted the compensation arrangement for our non-executive directors, and, in December 2025, our shareholders amended and extended the term of such plan for an additional period of up to three years. Pursuant to the amended compensation arrangement, the non-executive directors are paid an annual cash retainer and receive a fixed, automatic equity grant.
Cash retainer. The annual retainer for board membership is $40,000, with the Chairperson of the board of directors paid a supplemental annual fee of $40,000, and the lead-independent director paid a supplemental annual fee of $17,500. Non-executive directors are also entitled to a supplemental annual travel time fee of up to $20,000 ($5,000 for each quarter during which the director required out-of-town travel to attend board meetings).
The annual retainer for committee membership is $10,000 for audit committee membership, $7,500 for membership on the compensation committee, and $5,000 for membership on each of the nominating, governance and environmental committee and the mergers and acquisitions committee (provided that the mergers and acquisitions committee convenes at least twice per calendar year). In addition to the annual retainer for membership on the mergers and acquisitions committee, the members (including the chair) of such committee are entitled to $1,000 per meeting for each meeting beyond the first ten meetings per year. The annual retainer for serving as chairperson of the audit committee, the mergers and acquisitions committee, the compensation committee and the nominating, governance and environmental committee is $20,000, $15,000 (provided that such committee convenes at least twice per calendar year), $15,000 and $10,000, respectively.
Equity awards. Each non-executive director is granted an annual RSU award valued at $230,000, except that (i) the Chairperson of the board of directors is granted an annual RSU award valued at $345,000, and (ii) the lead independent director is granted an annual RSU award valued at $287,500.
The non-executive director grants vest in equal quarterly installments over a one-year period, commencing upon the date of grant, and subject to continued service as a director through the applicable vesting dates. The grants are subject to a “double trigger” full accelerated vesting mechanism upon a “Change of Control” event.
We also reimburse all reasonable out-of-pocket expenses incurred by directors for their attendance at meetings of the board or any committee in accordance with our policy.
Executive directors receive no additional compensation for their service as a director; provided, however, that an executive director who ceases to be a company executive and is designated by the board as a non-executive director, shall be entitled to the same compensation as a non-executive director (other than the initial equity grant), commencing on the date such director is designated by the board as a non-executive director.
As of January 31, 2026, 5,977,396 ordinary shares are subject to outstanding option, PSU and RSU awards granted to employees and office holders under our share incentive plans, including 2,619,367 ordinary shares issuable under currently exercisable share options. As of January 31, 2026, 1,929,595 ordinary shares remained available for future grant under our share incentive plan.
Employment and Consulting Agreements with Executive Officers
We have entered into written employment agreements with all of our executive officers. Each of these agreements contains provisions regarding non-competition, confidentiality of information and assignment of inventions. The non-competition provision applies for a period that is generally 12 months following termination of employment. The enforceability of covenants not to compete in Israel and the United States, and other jurisdictions in which our officers reside is subject to limitations. The engagements with our executive officers are not limited in time and can be terminated subject to applicable laws. In the event of a termination of employment, we are required to provide three months’ notice prior to termination, other than in the case of a termination for cause.
For a detailed description of the terms of employment of our Chief Executive Officer, see our report on Form 6-K, containing the company’s Notice and Proxy Statement with respect to the 2023 Annual General Meeting of the Shareholders, furnished to the SEC on September 29, 2023.
Directors’ Service Contracts
Other than with respect to our CEO who is both a director and an executive officer, there are no arrangements or understandings between us, on the one hand, and any of our directors, on the other hand, providing for benefits upon termination of their service as directors of our company, other than the “double trigger” full acceleration vesting mechanism upon a “Change of Control” event as described above under “Compensation Policy for Non-Executive Directors - Equity Awards.”
2013 Incentive Compensation Plan
We adopted our 2013 Incentive Compensation Plan (the “2013 Plan”), which went into effect on October 15, 2013, as amended from time to time, most recently on December 7, 2023. The 2013 Plan provides for the grant of options, restricted shares, RSUs, PSUs, share appreciation rights, cash-based awards, dividend equivalents and other share-based awards to our company’s and our subsidiaries’ respective directors, employees, officers, consultants, advisors and any other person whose services are considered valuable to us or any of our affiliates. As of December 31, 2025, options to purchase 2,675,894 of our ordinary shares and 3,391,516 RSUs (including PSUs) were outstanding under the 2013 Plan.
In 2025, under the 2013 Plan, we granted to certain of directors, executive officers, employees, and contractors, options to purchase 43,361 of our ordinary shares at a weighted average exercise price of $213.99 per share and 1,894,096 RSUs (including PSUs).
As of December 31, 2025, the number of ordinary shares we could have issued under the 2013 Plan was 1,907,903 shares, which increases by a number of shares determined by our board of directors. Ordinary shares subject to outstanding awards under the 2013 Plan that are subsequently forfeited or terminated for any other reason before being exercised will again be available for grant or re-grant, respectively, under the 2013 Plan. The number of shares subject to the 2013 Plan is also subject to adjustment if particular capital changes affect our share capital. On December 2, 2025, the number of ordinary shares reserved for the 2013 Plan increased by 2,000,000 shares, which a further increase of 800,000 shares in February 2026.
The 2013 Plan is administered by our board of directors or by a committee designated by the board of directors. Subject to those rights which are reserved to the board of directors or which require shareholder approval under Israeli law, our board of directors has designated the compensation committee to administer the 2013 Plan, including determining the grantees of awards and the terms of the grant, exercise prices, vesting schedules, acceleration of vesting and the other matters necessary for the administration of the 2013 Plan.
A share option is the right to purchase a specified number of ordinary shares in the future at a specified exercise price and subject to the other terms and conditions specified in the option award agreement and the 2013 Plan. Subject to those rights which are reserved to the board of directors or which require shareholder approval, the exercise price of each option granted under the 2013 Plan is determined by our compensation committee. The exercise price of any share options granted under the 2013 Plan may be paid in cash, ordinary shares already owned by the option holder or any other method that may be approved by our compensation committee, such as a cashless broker-assisted exercise that complies with applicable law. In addition, options may be exercised through a cashless exercise mechanism implemented by our company.
To the extent granted, options granted to newly hired employees under the 2013 Plan will generally vest over four years commencing on the date of grant such that 25% vest on the first anniversary of the date of grant and an additional 6.25% vest at the end of each subsequent three-month period thereafter for 36 months. Options, that are not exercised within 10 years from the grant date expire, unless otherwise determined by our board of directors or the compensation committee, as applicable. In the event of termination of employment or services for reasons of disability or death, the grantee, or in the case of death, his or her legal successor, may exercise options that have vested prior to termination within a period of one year from the date of disability or death. If we terminate a grantee’s employment or service for cause, all of the grantee’s vested and unvested options will expire on the date of termination. If a grantee’s employment or service is terminated for any other reason, including retirement, the grantee may exercise his or her vested options within 90 days of the date of termination. Any expired or unvested options return to the pool for reissuance.
Restricted share awards are ordinary shares that are awarded to a participant subject to the satisfaction of the terms and conditions established by the board of directors and/or compensation committee. Until such time as the applicable restrictions lapse, restricted shares are subject to forfeiture and may not be sold, assigned, pledged or otherwise disposed of by the participant who holds those shares. RSUs and PSUs are denominated in ordinary shares, except that no shares are actually issued to the participant on the grant date. When an RSU or PSU award vests, and in the case of a PSU award, is earned, the participant is entitled to receive ordinary shares, a cash payment based on the value of ordinary shares or a combination of shares and cash.
Equity awards granted to Israeli employees under the 2013 Plan may be granted pursuant to the provisions of Section 102 of the Israeli Income Tax Ordinance. Any equity awards granted pursuant to such provision, will be issued to a trustee and be held by the trustee for at least two years from the date of grant of the award in order for the grantee to benefit from preferential capital gains taxation under the Israeli Tax Ordinance. Any share options granted under the 2013 Plan to participants in the United States will be nonqualified stock options.
If we undergo a change of control, as defined in the 2013 Plan, subject to any contrary law or rule, or the terms of any award agreement in effect before the change of control, then without the consent of the option holder, our board of directors or its designated committee, as applicable, may but is not required to (i) cause any outstanding award to be assumed or an equivalent award to be substituted by such successor corporation or (ii) if the successor corporation refuses to assume or substitute the award as described in the 2013 Plan (a) the grantee’s awards shall accelerate in full and such grantee may exercise the award as to all or part of the shares or (b) cancel the options against payment in cash, securities or other property in the same amount as was received by the holders of our shares in such change of control transaction.
Subject to particular limitations specified in the 2013 Plan and under applicable law, our board of directors may amend or terminate the 2013 Plan, and the compensation committee may amend awards outstanding under the 2013 Plan. The 2013 Plan will continue in effect until all ordinary shares available under the 2013 Plan are delivered and all restrictions on those shares have lapsed; unless the 2013 Plan is terminated earlier by our board of directors.
Employee Stock Purchase Plan
In the third quarter of 2014, we started granting employees and full-time consultants the right to purchase our ordinary shares under an employee stock purchase plan, or ESPP, pursuant to which our full time employees and consultants, and full time employees and consultants of our subsidiaries may elect to have payroll deductions (or, when not allowed under local laws or regulations, another form of payment) made on each pay day during the offering period in an amount not exceeding 15% of the net compensation which the employees receive on each pay day during the offering period.
The number of ordinary shares reserved for purchase under the ESPP upon its adoption was 303,432 ordinary shares, which was automatically increased, and will increase by a number of ordinary shares determined by our board of directors. On December 2, 2025, the number of ordinary shares reserved for the ESPP increased by 550,000 shares. The total ordinary shares reserved under the ESPP as of February 28, 2026 was 2,791,595 shares. On March 02, 2026, 434,247 ordinary shares were issued under the ESPP for the six-month offering period from September 1, 2025 through February 28, 2026.
The ESPP is administered by our board of directors or by a committee designated by the board of directors. Subject to those rights which are reserved to the board of directors or which require shareholder approval under Israeli law, our board of directors has designated the compensation committee to administer the ESPP. To the extent that we grant employees the right to make purchases under the ESPP, on the first day of each offering period, each participating employee will be granted an option to purchase on the exercise date of such offering period up to a number of the Company’s ordinary shares determined by dividing (1) the employee’s payroll deductions accumulated prior to such exercise date and retained in the employee’s account as of the exercise date by (2) the applicable purchase price, subject to certain limitations that may be applied to employees in different jurisdictions to address applicable law. The applicable purchase price is based on a discount percentage of up to 15%, which percentage may be decreased by the board of directors or the compensation committee, multiplied by the lesser of (1) the fair market value of an ordinary share on the exercise date, or (2) the fair market value of an ordinary share on the offering date.
C. Board Practices
Board of Directors
Under the Companies Law and our articles of association, our business and affairs are managed under the direction of our board of directors. Our board of directors may exercise all powers and may take all actions that are not specifically granted to our shareholders or to our executive management. Our Chief Executive Officer (referred to as a “general manager” under the Companies Law) is responsible for our day-to-day management. Our Chief Executive Officer is appointed by, and serves at the discretion of, our board of directors, subject to the terms of an employment agreement that we have entered into with him. All other executive officers are appointed by the Chief Executive Officer and are subject to the terms of any applicable employment or consulting agreements that we may enter into with them.
We comply with the rules of NASDAQ requiring that a majority of our directors are independent. Our board of directors has determined that all of our directors, other than Avishai Abrahami, are independent under such rules.
Each of our directors is appointed by a simple majority vote of holders of our voting shares, participating and voting at an annual meeting of our shareholders.
Under our articles of association, our directors are divided into three classes with staggered three-year terms. Each class of directors consists, as nearly as possible, of one-third of the total number of directors constituting the entire board of directors. At each annual general meeting of our shareholders, the election or re-election of directors following the expiration of the term of office of the directors of that class of directors, is for a term of office that expires on the third annual general meeting following such election or re-election, such that each year the term of office of only one class of directors will expire.
Our directors are divided among the three classes as follows:
•the Class I directors are Allon Bloch, Deirdre Bigley and Ferran Soriano, and their terms expire at our annual meeting of shareholders to be held in 2026;
•the Class II directors are Francesco de Mojana, Ron Gutler and Gavin Patterson, and their terms expire at our annual meeting of shareholders to be held in 2027; and
•the Class III directors are Avishai Abrahami and Mark Tluszcz, and their terms expire at our annual meeting of shareholders to be held in 2028.
The directors shall be elected by a vote of the holders of a majority of the voting power present and voting at that meeting (excluding abstentions). Each director will hold office until such director’s successor is elected at a meeting of our shareholders or until the tenure of such director expires earlier pursuant to the Companies Law or unless he or she is removed from office as described below.
Under our articles of association, the approval of the holders of at least 662/3% of the shares entitled to vote at a general meeting and voting in person or by proxy at the meeting is generally required to remove any of our directors from office. In addition, vacancies on our board of directors may only be filled by a vote of a simple majority of the directors then in office. A director so appointed will hold office until the annual meeting of our shareholders for the year in which his or her term expires and after his or her successor is duly elected and qualified.
Chairperson of the Board of Directors and Board of Directors Leadership Structure
Our articles of association provide that the Chairperson of the board of directors is elected by the members of the board of directors and serves as Chairperson of the board of directors throughout his or her term as a director, unless resolved otherwise by the board of directors. Under the Companies Law, the Chief Executive Officer (referred to as a “general manager” under the Companies Law) or a relative of the Chief Executive Officer, may not serve as the Chairperson of the board of directors, and the Chairperson or a relative of the Chairperson may not be vested with authorities of the Chief Executive Officer without shareholder approval consisting of a majority vote of the shares present and voting at a shareholders meeting, provided that either:
•such majority includes at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such appointment, present and voting at such meeting; or
•the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such appointment voting against such appointment does not exceed 2% of the aggregate voting rights in the company.
In addition, a person subordinated, directly or indirectly, to the Chief Executive Officer may not serve as the Chairperson of the board of directors; the Chairperson of the board of directors may not be vested with authorities that are granted to those subordinated to the Chief Executive Officer; and the Chairperson of the board of directors may not serve in any other position in the company or a controlled company, but he may serve as a director or Chairperson of a subsidiary.
The board of directors recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide independent oversight of management. The board of directors believes that, given the dynamic and competitive environment in which we operate, the optimal board leadership structure may vary as circumstances warrant.
The board of directors has chosen to separate the two roles of Chief Executive Officer and Chairman of the board of directors, as our leadership structure promotes balance between the authority of those who oversee our business and those who manage it on a day-to-day basis. Mark Tluszcz serves as non-executive Chairman of the board of directors and Ron Gutler serves as lead independent director.
Nevertheless, the board of directors recognizes that it is important to retain the organizational flexibility to determine whether the roles of the Chairman of the board of directors and Chief Executive Officer should be separated or combined in one individual. The board of directors periodically evaluates whether the board leadership structure should be changed in light of specific circumstances applicable to us.
External Directors and Israeli Regulations
Under the Companies Law, companies organized under the laws of the State of Israel that are “public companies,” including companies with shares listed on NASDAQ, are generally required to appoint at least two external directors who meet the independence qualification requirements in the Companies Law.
However, pursuant to Israeli relief regulations adopted in 2016, an Israeli company traded on NASDAQ that does not have a “controlling shareholder” (as defined in the Companies Law) may elect not to appoint external directors to its board of directors and not to comply with the audit committee and compensation committee composition and chairperson requirements of the Companies Law; provided, the company complies with the applicable NASDAQ independent director requirements and the NASDAQ audit committee and compensation committee composition requirements.
In accordance with the relief regulations, our nominating, governance and environmental committee and board of directors elected, in July 2016, not to appoint external directors to the board of directors and not to comply with the audit committee and compensation committee composition and chairperson requirements of the Companies Law, and to transition our external directors to become “regular” independent directors.
Audit Committee
Composition Requirements
Under NASDAQ corporate governance rules, we are required to maintain an audit committee consisting of at least three independent directors, each of whom is financially literate and one of whom has accounting or related financial management expertise.
Our audit committee consists of Ron Gutler, Deirdre Bigley and Francesco de Mojana. Ron Gutler serves as the Chairperson of the audit committee. All members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and NASDAQ corporate governance rules. Our board of directors has determined that Ron Gutler is an audit committee financial expert as defined by the SEC rules and has the requisite financial experience as defined by NASDAQ corporate governance rules.
Each member of our audit committee is “independent” as such term is defined in the relevant NASDAQ rules and in Rule 10A-3(b)(1) under the Exchange Act, which is different from the general test for independence of board of directors and committee members.
Audit Committee Role
Our board of directors has adopted an audit committee charter setting forth the responsibilities of the audit committee consistent with the rules of the SEC and NASDAQ corporate governance rules and the Companies Law, which include:
•retaining and terminating our independent auditors, subject to board of directors and, in the case of retention, shareholder ratification;
•pre-approval of audit and non-audit services to be provided by the independent auditors;
•reviewing with management the risk related to cybersecurity, information technology and information security, including data protection and data privacy, and the steps that management has taken to monitor and control such risks
•reviewing with management and our independent auditor our annual and quarterly financial reports prior to their submission to the SEC; and
•approval of certain transactions with office holders and controlling shareholders, as described below, and other related-party transactions.
Additionally, under the Companies Law, an audit committee is required, among other things, to identify deficiencies in the administration of the company (including by consulting with the internal auditor), and recommend remedial actions with respect to such deficiencies, is responsible for reviewing and approving certain related party transactions, including determining whether or not such transactions are extraordinary transactions, and is required to adopt procedures with respect to processing employee complaints in connection with deficiencies in the administration of the company, and the appropriate means of protection afforded to such employees. In addition, the audit committee is responsible for overseeing the internal control procedures of the company. Under the Companies Law, the approval of the audit committee is required for specified actions and transactions with office holders and controlling shareholders.
See “—Approval of Related Party Transactions under Israeli Law.” However, the audit committee may not approve an action or a transaction with a controlling shareholder or with an office holder unless at the time of approval the majority of the members of the audit committee are present, of whom a majority must be unaffiliated directors.
Compensation Committee
NASDAQ Listing and Companies Law Requirements
Under NASDAQ corporate governance rules, we are required to maintain a compensation committee consisting of at least two independent directors. Our compensation committee consists of three independent directors. Each of the members of the compensation committee is also required to be independent under the additional NASDAQ rules relating specifically to the independence of compensation committee members. Each member of our compensation committee satisfies those requirements.
Compensation Committee Composition and Role
Our compensation committee consists of Ron Gutler, Gavin Patterson, and Deirdre Bigley. Ron Gutler serves as the Chairperson of the compensation committee.
Our board of directors has adopted a compensation committee charter setting forth the responsibilities of the committee consistent with NASDAQ rules and the Companies Law, which include:
•reviewing and recommending to the board of directors overall compensation policies with respect to our Chief Executive Officer and other executive officers;
•reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers including evaluating their performance in light of such goals and objectives;
•reviewing and approving the granting of equity incentive awards; and
•reviewing, evaluating and making recommendations to the board of directors regarding the compensation and benefits for our non-employee directors.
Additionally, under the Companies Law, the compensation committee’s duties include recommending compensation policies to the board of directors, overseeing compensation policy implementation and ratifying the compensation of executive officers.
Nominating, Governance and Environmental Committee
Our nominating, governance and environmental committee consists of Ron Gutler and Deirdre Bigley. Ron Gutler serves as the Chairperson of the nominating, governance and environmental committee. Our board of directors has adopted a nominating, governance and environmental committee charter setting forth the responsibilities which include:
•overseeing and assisting our board of directors in reviewing and recommending nominees for election as directors;
•assessing the performance of the members of our board of directors;
•establishing and maintaining effective corporate governance policies and practices, including, but not limited to, developing and recommending to our board of directors a set of corporate governance guidelines applicable to our company; and
•reviewing and overseeing our strategy, programs, and public disclosure for ESG issues.
Compensation Policies under the Companies Law
In accordance with the Companies Law, we have adopted compensation policies for our directors and executive officers, which we refer to in this section as “office holders.” In adopting the compensation policies, the compensation committee took into account factors such as the office holder’s education, experience, past compensation arrangements with the Company, and the proportional difference between the person’s compensation and the average compensation of the Company’s employees.
The compensation policies must be approved at least once every three years at the Company’s general meeting of shareholders, following approval of the compensation committee and the board of directors, and are subject to the approval of a majority vote of the shares present and voting at a shareholders meeting, provided that either:
•such majority includes at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such election (other than a personal interest which is not derived from a relationship with a controlling shareholder), present and voting at such meeting; or
•the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in such election (other than a personal interest which is not derived from a relationship with a controlling shareholder) voting against the approval of the compensation policy does not exceed 2% of the aggregate voting rights in the company.
The compensation plan for our executives was last approved by the shareholders on December 19, 2022 and was last amended by the shareholders on November 6, 2023, and our compensation plan for our non-executive directors was last approved by the shareholders on December 19, 2022.
The compensation policies serve as the basis for decisions concerning the financial terms of employment or engagement of executive officers and directors, including exculpation, insurance, indemnification or any monetary payment or obligation of payment in respect of employment or engagement. The compensation policies must relate to certain factors, including advancement of the company’s objectives, the company’s business and its long-term strategy, and creation of appropriate incentives for executives. It must also consider, among other things, the company’s risk management, size and the nature of its operations. The compensation policies must furthermore consider the following additional factors:
•the knowledge, skills, expertise and accomplishments of the relevant director or executive;
•the director’s or executive’s roles and responsibilities and prior compensation agreements with him or her;
•the relationship between the cost of the compensation terms offered to the relevant director or executive and the average compensation cost of the other employees of the company, including those employed through manpower companies;
•the impact of disparities in salary upon work relationships in the company;
•the possibility of reducing variable compensation at the discretion of the board of directors and the possibility of setting a limit on the exercise value of non-cash variable compensation; and
•as to severance compensation, the period of service of the director or executive, the terms of his or her compensation during such service period, the company’s performance during that period of service, the person’s contribution towards the company’s achievement of its goals and the maximization of its profits, and the circumstances under which the person is leaving the company.
The compensation policies must also include the following principles:
•the link between variable compensation and long-term performance and measurable criteria;
•the relationship between variable and fixed compensation, and the ceiling for the value of variable compensation;
•the conditions under which a director or executive would be required to repay compensation paid to him or her if it was later shown that the data upon which such compensation was based was inaccurate and was required to be restated in the company’s financial statements (these conditions are in addition to the conditions for repayment included in the Policy for Recovery of Erroneously Awarded Compensation we adopted in accordance with Nasdaq rules (included as Exhibit 97.1 to this annual report));
•the minimum holding or vesting period for variable, equity-based compensation while referring to appropriate long-term perspective based incentives; and
•maximum limits for severance compensation.
The compensation committee is responsible for (a) recommending the compensation policies to the company’s board of directors for its approval (and subsequent approval by our shareholders) and (b) duties related to the compensation policies and to the approval of the terms of engagement of office holders, including:
•recommending whether a compensation policy should continue in effect, if the then-current policy has a term of greater than three years (approval of either a new compensation policy or the continuation of an existing compensation policy must in any case occur every three years);
•recommending to the board of directors periodic updates to the compensation policies;
•assessing implementation of the compensation policies; and
•determining whether the compensation terms of a proposed new Chief Executive Officer of the company need not be brought to approval of the shareholders.
Compensation of Directors
Under the Companies Law, the compensation of our directors requires the approval of our compensation committee, the subsequent approval of the board of directors and, unless exempted under the regulations promulgated under the Companies Law, the approval of the shareholders at a general meeting. Where the director is also a controlling shareholder, the requirements for approval of transactions with controlling shareholders apply, as described below under “Disclosure of Personal Interests of a Controlling Shareholder and Approval of Certain Transactions.”
The directors are also entitled to be paid reasonable travel, hotel and other expenses expended by them in attending board meetings and performing their functions as directors of the company.
For additional information, see “Compensation of Directors and Executive Officers – Compensation Program for Non-Executive Directors.”
Internal Auditor
Under the Companies Law, the board of directors of an Israeli public company must appoint an internal auditor recommended by the audit committee and appointed by the board of directors. An internal auditor may not be:
•a person (or a relative of a person) who holds more than 5% of the company’s outstanding shares or voting rights;
•a person (or a relative of a person) who has the power to appoint a director or the general manager of the company;
•an office holder or director of the company or a relative of such person; or
•a member of the company’s independent accounting firm, or anyone on its behalf.
The role of the internal auditor is to examine, among other things, our compliance with applicable law and orderly business procedures. The audit committee is required to oversee the activities and to assess the performance of the internal auditor as well as to review the internal auditor’s work plan. Deloitte Brightman Almagor serves as our internal auditor.
Our internal auditor also fulfills the internal audit function required by NASDAQ corporate governance rules and provides management and the audit committee with ongoing assessments of our risk management processes and system of internal control.
Approval of Related Party Transactions under Israeli Law
Fiduciary Duties of Directors and Executive Officers
The Companies Law codifies the fiduciary duties that office holders owe to a company. An office holder is defined in the Companies Law as a general manager, chief business manager, deputy general manager, vice general manager, any other person assuming the responsibilities of any of these positions regardless of such person’s title, a director and any other manager directly subordinate to the general manager. Each person listed in the table under Item 6.A. “Directors, Senior Management and Employees” is an office holder under the Companies Law.
An office holder’s fiduciary duties consist of a duty of care and a duty of loyalty. The duty of care requires an office holder to act with the level of care with which a reasonable office holder in the same position would have acted under the same circumstances. The duty of loyalty requires that an office holder to act in good faith and in the best interests of the company.
The duty of care includes a duty to use reasonable means to obtain:
•information on the appropriateness of a given action submitted for his or her approval or performed by virtue of his or her position; and
•all other important information pertaining to these actions.
The duty of loyalty includes a duty to:
•refrain from any conflict of interest between the performance of his or her duties in the company and his or her personal affairs;
•refrain from any activity that is competitive with the business of the company;
•refrain from exploiting any business opportunity of the company in order to receive a personal gain for himself or herself or others; and
•disclose to the company any information or documents relating to the company’s affairs which the office holder received as a result of his or her position as an office holder.
Disclosure of Personal Interests of an Office Holder and Approval of Certain Transactions
The Companies Law requires that an office holder promptly disclose to the board of directors any personal interest that he or she may have and all related material information known to him or her concerning any existing or proposed transaction with the company. A personal interest includes an interest of any person in an act or transaction of a company, including a personal interest of one’s relative or of a corporate body in which such person or a relative of such person is a 5% or greater shareholder, director or general manager or in which he or she has the right to appoint at least one director or the general manager, but excluding a personal interest stemming solely from one’s ownership of shares in the company.
If it is determined that an office holder has a personal interest in a non-extraordinary transaction, approval by the board of directors is required for the transaction, unless the company’s articles of association provide for a different method of approval. Any transaction that is not in the best interest of the company may not be approved by the board of directors.
Our articles of association provide that for non-extraordinary interested party transactions, the board of directors may delegate its approval, or may provide a general approval to certain types of non-extraordinary interested party transactions.
Approval first by the company’s audit committee and subsequently by the board of directors is required for an extraordinary transaction, meaning any transaction that is not in the ordinary course of business, not on market terms or that is likely to have a material impact on the company’s profitability, assets or liabilities.
A director and any other office holder who has a personal interest in a transaction which is considered at a meeting of the board of directors and/or the audit committee may generally (unless it is with respect to a transaction which is not an extraordinary transaction) not be present at such a meeting or vote on that matter unless a majority of the directors or members of the audit committee, as applicable, have a personal interest in the matter. If a majority of the members of the audit committee or the board of directors has a personal interest in the approval of such a transaction then all of the directors may participate in deliberations of the audit committee or board of directors, as applicable, with respect to such transaction and vote on the approval thereof and, in such case, shareholder approval is also required.
Pursuant to the Companies Law, compensation arrangements such as insurance, indemnification or exculpation arrangements with office holders who are not the Chief Executive Officer or a director require compensation committee approval and subsequent approval by the board of directors. Compensation arrangements shall be in accordance with the executive compensation policy of the company. In special circumstances, the compensation committee and the board of directors may approve compensation arrangements that are not in compliance with the compensation policy of the company, subject to the approval of a majority vote of the shares present and voting at a shareholders meeting, provided that either: (a) such majority includes at least a majority of the shares held by all shareholders who are not controlling shareholders and do not have a personal interest in such compensation arrangement; or (b) the total number of shares of non-controlling shareholders and shareholders who do not have a personal interest in the compensation arrangement and who vote against the arrangement does not exceed two percent of the company’s aggregate voting rights, or the Special Majority Vote for Compensation. In the event that the Special Majority Vote for Compensation is not obtained, the compensation committee and the board of directors may reconsider the compensation arrangement and approve it, after a detailed review.
Pursuant to the Companies Law, compensation arrangements with the Chief Executive Officer require compensation committee approval, approval by the board of directors and Special Majority for Compensation approval at the shareholders’ meeting.
Compensation arrangements with the Chief Executive Officer shall be in accordance with the compensation policy of the company. In the event that Special Majority Vote for Compensation is not obtained, then the compensation committee and the board of directors may reconsider the compensation arrangement and approve it after a detailed review. Notwithstanding the above, the compensation committee is authorized to refrain from submitting a proposed compensation arrangement with a Chief Executive Officer candidate for shareholder approval, if: (a) doing so would jeopardize the company’s engagement of the candidate; (b) the candidate did not have a prior business relationship with the company or a controlling shareholder of the company; and (c) the proposed arrangement complies with the company’s compensation policy.
With respect to amending an existing compensation arrangement, only the approval of the compensation committee is required, provided the committee determines that the amendment is not material in relation to the existing compensation arrangement. With respect to amending an existing related-party transaction, only the approval of the audit committee is required, provided the committee determines that the amendment is not material in relation to the existing arrangement.
Compensation arrangements with directors who are not controlling shareholders, including compensation arrangements with directors in their capacities as executive officers, (unless exempted under the applicable regulations), require the approval of the compensation committee, the board of directors and the company’s shareholders, in that order.
Disclosure of Personal Interests of Controlling Shareholders and Approval of Certain Transactions
Pursuant to the Companies Law, the disclosure requirements regarding personal interests that apply to directors and executive officers also apply to a controlling shareholder of a public company. A controlling shareholder is a shareholder who has the ability to direct the activities of a company, including a shareholder who holds 25% or more of the voting rights if no other shareholder holds more than 50% of the voting rights. For this purpose, the holdings of all shareholders who have a personal interest in the same transaction will be aggregated.
In addition, an extraordinary transaction between a public company and a controlling shareholder, or in which a controlling shareholder has a personal interest, and the terms of any compensation arrangement of a controlling shareholder who is an office holder or his relative, require the approval of a company’s audit committee (or compensation committee with respect to compensation arrangements), board of directors and a special majority vote of shareholders without personal interest, in that order.
Shareholder Duties
Pursuant to the Companies Law, a shareholder has a duty to act in good faith and in a customary manner toward the company and other shareholders, and to refrain from abusing his or her power with respect to the company, including, among other things, in voting at a general meeting and at shareholder class meetings with respect to the following matters:
•an amendment to the company’s articles of association;
•an increase of the company’s authorized share capital;
•a merger; or
•interested party transactions that require shareholder approval.
In addition, a shareholder has a general duty to refrain from discriminating against other shareholders.
Certain shareholders also have a duty of fairness toward the company. These shareholders include any controlling shareholder, any shareholder who knows that it has the power to determine the outcome of a shareholder vote and any shareholder who has the power to appoint or to prevent the appointment of an office holder of the company or exercise any other rights available to it under the company’s articles of association with respect to the company. The Companies Law does not define the substance of this duty of fairness, except to state that the remedies generally available upon a breach of contract will also apply in the event of a breach of the duty of fairness.
Exculpation, Insurance and Indemnification of Office Holders
Under the Companies Law, a company may not exculpate an office holder from liability for a breach of the duty of loyalty. An Israeli company may exculpate an office holder in advance from liability to the company, in whole or in part, for damages caused to the company as a result of a breach of duty of care but only if a provision authorizing such exculpation is included in its articles of association. Our articles of association include such a provision. An Israeli company may not exculpate a director from liability arising out of a prohibited dividend or distribution to shareholders.
An Israeli company may indemnify an office holder in respect of the following liabilities and expenses incurred for acts performed as an office holder, either in advance of an event or following an event, provided a provision authorizing such indemnification is contained in its articles of association:
•financial liability imposed on him or her in favor of another person pursuant to a judgment, settlement or arbitrator’s award approved by a court. However, if an undertaking to indemnify an office holder with respect to such liability is provided in advance, then such an undertaking must be limited to events which, in the opinion of the board of directors, can be foreseen based on the company’s activities when the undertaking to indemnify is given, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances, and such undertaking shall detail the above mentioned events and amount or criteria;
•reasonable litigation expenses, including attorneys’ fees, incurred by the office holder as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding; and (ii) no financial liability, such as a criminal penalty, was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or, if such financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent; and
•reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third party or in connection with criminal proceedings in which the office holder was acquitted or as a result of a conviction for an offense that does not require proof of criminal intent.
An Israeli company may insure an office holder against the following liabilities incurred for acts performed as an office holder if and to the extent provided in the company’s articles of association:
•a breach of the duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
•a breach of the duty of care to the company or to a third party, including a breach arising out of the negligent conduct of the office holder;
•a financial liability imposed on the office holder in favor of a third party;
•a financial liability imposed on the office holder in favor of a third party harmed by a breach in an administrative proceeding; and
•reasonable litigation expenses, including attorneys’ fees, incurred by the office holder as a result of an administrative proceeding instituted against him or her.
An Israeli company may not indemnify or insure an office holder against any of the following:
•a breach of the duty of loyalty, except to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;
•a breach of the duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;
•an act or omission committed with intent to derive illegal personal benefit; or
•a fine or forfeit levied against the office holder.
Under the Companies Law, exculpation, indemnification and insurance of office holders must be approved by the compensation committee and the board of directors and, with respect to directors and our Chief Executive Officer, also by shareholders.
Our articles of association allow us to indemnify and insure our office holders for any liability imposed on them as a consequence of an act (including any omission) which was performed by virtue of being an office holder. Our office holders are currently covered by a directors’ and officers’ liability insurance policy.
We have entered into agreements with each of our directors and executive officers exculpating them, to the fullest extent permitted by law, from liability to us for damages caused to us as a result of a breach of duty of care and undertaking to indemnify them to the fullest extent permitted by law. This indemnification is limited to events determined as foreseeable by the board of directors based on our activities, and to an amount or according to criteria determined by the board of directors as reasonable under the circumstances.
The maximum indemnification amount set forth in such agreements is limited to an amount the higher of (x) 50% of our net assets based on our most recently published financial statements prior to the time that notice of indemnification is provided to us; or (y) $30 million; provided, however, that in relation to indemnification claimed in connection with a public offering of our securities, the amount, if higher, shall be equal to the aggregate proceeds raised by us and/or selling shareholders. The maximum amount set forth in such agreements is in addition to any amount paid (if paid) under insurance and/or by a third party pursuant to an indemnification arrangement.
D. Employees
As of December 31, 2025, we had 4,622 employees, 3,273 of whom were based in Israel, 525 of whom were based in the United States, 339 of whom were based in Ireland, 264 of whom were based in Lithuania, 96 of whom were based in Poland, 42 of whom were based in Japan, 18 of whom were based in Netherlands, 19 of whom were based in Canada, 16 of whom were based in the UK, 9 of whom were based in Germany, 11 of whom were based in Ukraine, 5 of whom were based in Brazil, and 5 of whom were based in Australia. Of our employees, 4,397 work full-time and 225 work part-time. As of December 31, 2025, we also engaged the services of 718 contractors in Ukraine and Poland. The following table shows the breakdown of our global workforce of employees and contractors by category of activity as of the dates indicated:
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As of December 31, |
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2025 |
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2024 |
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2023 |
| Department |
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| General and administration |
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633 |
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635 |
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627 |
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| Marketing |
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1,086 |
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1,078 |
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1,192 |
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| Research and development |
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2,530 |
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2,428 |
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2,301 |
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| Support and call center |
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1,091 |
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1,142 |
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1,182 |
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| Total |
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5,340 |
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5,283 |
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5,302 |
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With regard to our Israeli employees, Israeli labor laws govern the length of the work day, minimum wages for employees, procedures for hiring and dismissing employees, determination of severance pay, annual leave, sick days, advance notice of termination of employment, equal opportunity and anti-discrimination laws and other conditions of employment. Subject to certain exceptions, Israeli law generally requires severance pay upon the retirement, death or dismissal of an employee, and requires us and our employees to make payments to the National Insurance Institute, which is similar to the U.S. Social Security Administration. Our employees have pension plans that comply with the applicable Israeli legal requirements, and we make monthly contributions to severance pay funds for all employees in Israel, which cover potential severance pay obligations.
None of our employees work under any collective bargaining agreements. Extension orders issued by the Israeli Ministry of Economy apply to us and affect matters, such as cost of living adjustments to salaries, length of working hours and week, recuperation pay, travel expenses, and pension rights.
We have never experienced labor-related work stoppages or strikes and believe that our relations with our employees are satisfactory.
E. Share Ownership
For information regarding the share ownership of our directors, executive officers, and employees, please refer to Item 6.B. “Directors, Senior Management and Employees—Compensation” and Item 7.A. “Major Shareholders and Related Party Transactions—Major Shareholders.”
F. Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation
None.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
The following table sets forth information with respect to the beneficial ownership of our shares as of January 31, 2026 by:
•each person or entity known by us to own beneficially more than 5% of our outstanding shares;
•each of our directors and executive officers individually; and
•all of our executive officers and directors as a group.
The beneficial ownership of ordinary shares is determined in accordance with the rules of the SEC and generally includes any ordinary shares over which a person exercises sole or shared voting or investment power, or the right to receive the economic benefit of ownership. The percentage of shares beneficially owned is based on 55,047,453 ordinary shares outstanding as of January 31, 2026. We have deemed our ordinary shares subject to stock options that are currently exercisable or exercisable within 60 days of January 31, 2026 or issuable pursuant to RSUs and PSUs that are subject to vesting and performance conditions expected to be satisfied within 60 days of January 31, 2026 to be outstanding and to be beneficially owned by the person holding the stock option, RSU or PSU for the purpose of computing the percentage ownership of that person. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.
All of our shareholders, including the shareholders listed below, have the same voting rights attached to their ordinary shares. See Item 10.B. “Additional Information—Memorandum and Articles of Association.” None of our principal shareholders nor our directors and executive officers will have different or special voting rights with respect to their ordinary shares. Unless otherwise noted below, each shareholder’s address is Wix.com Ltd., Wix Campus. Building B, 5th Floor, Tel Aviv 6936024 Israel.
A description of any material relationship that our principal shareholders have had with us or any of our predecessors or affiliates within the past three years is included under Item 7.B. “Major Shareholders and Related Party Transactions—Related Party Transactions.”
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Name of Beneficial Owner |
Number of Shares Beneficially Held |
Percentage of Class |
| |
|
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| Directors and Executive Officers |
|
|
| Avishai Abrahami (1) |
2,014,244 |
3.6% |
| Lior Shemesh (2) |
215,434 |
* |
| Nir Zohar (3) |
922,559 |
1.7% |
| Omer Shai (4) |
545,242 |
1.0% |
| Yaniv Even Haim (5) |
85,348 |
* |
| Shelly Meyer (6) |
184,729 |
* |
|
|
|
|
|
|
| Gavin Patterson (7) |
4,514 |
* |
| Ron Gutler (7) |
45,332 |
* |
| Francesco de Mojana (7) |
3,854 |
* |
| Allon Bloch (7) |
15,605 |
* |
| Deirdre Bigley (7) |
16,576 |
* |
| Ferran Soriano (7) |
15,470 |
* |
| Mark Tluszcz (7) |
29,167 |
* |
|
|
|
| All executive officers and directors as a group (13 persons) |
4,098,074 |
7.2% |
Principal Shareholders |
|
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| Ameriprise Financial, Inc.(8) |
6,019,660 |
10.9% |
| Wellington Management Group LLP (9) |
3,460,299 |
6.3% |
| Baillie Gifford & Co (10) |
3,227,099 |
5.9% |
| Senvest Management, LLC (11) |
2,834,280 |
5.1% |
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__________
* Less than 1%.
(1) Shares beneficially owned consist of 953,907 shares and outstanding options and RSUs to purchase 1,060,337 shares that are exercisable within 60 days of January 31, 2026. Excludes shares owned by Mr. Abrahami’s spouse, as to all of which shares Mr. Abrahami disclaims beneficial ownership.
(2) Shares beneficially owned consist of 104,385 shares and 111,049 shares issuable pursuant to outstanding options and RSUs that are exercisable within 60 days of January 31, 2026.
(3) Shares beneficially owned consist of 411,479 shares and 511,080 shares issuable pursuant to outstanding options and RSUs that are exercisable within 60 days of January 31, 2026. Excludes shares owned by Mr. Zohar’s spouse, as to all of which shares Mr. Zohar disclaims beneficial ownership.
(4) Shares beneficially owned consist of 389,366 shares and 155,876 shares issuable pursuant to outstanding options and RSUs that are exercisable within 60 days of January 31, 2026.
(5) Shares beneficially owned consist of 43,445 shares and 41,903 shares issuable pursuant to outstanding options and RSUs that are exercisable within 60 days of January 31, 2026.
(6) Shares beneficially owned consist of 88,688 shares and 96,041 shares issuable pursuant to outstanding options and RSUs that are exercisable within 60 days of January 31, 2026.
(7) Shares beneficially owned consist of shares and of shares issuable pursuant to outstanding options that are exercisable within 60 days of January 31, 2026 and RSUs that vest within 60 days of January 31, 2026.
(8) This information is based upon a Schedule 13G/A jointly filed by Ameriprise Financial, Inc. (“AFI”), Columbia Management Investment Advisers, LLC (“CMIA”) and Columbia Seligman Technology and Information Fund (“Fund”) with the SEC on February 6, 2026. The address of AFI is 145 Ameriprise Financial Center, Minneapolis, MN 55474. The address of CMIA and Fund is 290 Congress Street, Boston, MA 02210. Pursuant to the Schedule 13G/A, AFI has shared voting power over 5,670,975 shares and shared dispositive power over 6,019,660 shares, CMIA has shared voting power over 5,670,975 shares and shared dispositive power over 5,869,661 shares, and Fund has sole voting power over 3,720,492 shares and shared dispositive power over 3,720,492 shares. AFI and CMIA disclaim beneficial ownership of any shares reported on this Schedule 13G/A.
(9) This information is based upon a Schedule 13G jointly filed by Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP and Wellington Management Company LLP with the SEC on November 12, 2025. Their address is c/o Wellington Management Company LLP, 280 Congress Street, Boston MA 02210. Pursuant to the Schedule 13G, each of Wellington Management Group LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP has shared voting power over 2,968,130 and shared dispositive power over 3,460,299 shares. Wellington Management Company LLP has shared voting power over 2,870,621 shares and shared dispositive power over 3,044,357 shares. These shares are owned of record by clients of certain investment advisers including Wellington Management Company LLP (together, the “Wellington Investment Advisers”), of which Wellington Management Group LLP is the parent holding company. Wellington Investment Advisors Holdings LLP controls directly, or indirectly through Wellington Management Global Holdings, Ltd, the Wellington Investment Advisers. Wellington Investment Advisors Holding LLP is owned by Wellington Group Holdings LLP. Wellington Group Holdings LLP is owned by Wellington Management Group LLP.
(10)This information is based upon a Schedule 13G/A filed by Baillie Gifford & Co (“BGC”) with the SEC on April 30, 2025. The address of BGC is Calton Square, 1 Greenside Row, Edinburgh EH1 3AN, Scotland, UK. Pursuant to the Schedule 13G/A, BGC has sole voting power over 2,428,184 shares and sole dispositive power over 3,227,099 shares. Securities reported on the Schedule 13G/A are beneficially owned by BGC and are held by BGC and/or one or more of its investment adviser subsidiaries, which may include Baillie Gifford Overseas Limited, on behalf of investment advisory clients, which may include investment companies, employee benefit plans, pension funds or other institutional clients.
(11) This information is based upon a Schedule 13G jointly filed by Senvest Management, LLC and Richard Mashaal with the SEC on December 2, 2025. The address of Senvest Management, LLC and Richard Mashaal is 540 Madison Avenue, 32nd Floor, New York, NY 10022. Pursuant to the Schedule 13G, Senvest Management, LLC and Richard Mashaal have shared voting power over 2,834,280 shares and shared dispositive power over 2,834,280 shares. Such shares do not include 125,641 additional ordinary shares subsequently purchased in the Private Placement by certain affiliated entities.
Registered Holders
As of January 31, 2026, we had two holders of record of our ordinary shares in the United States. Those shareholders held in the aggregate 55,046,628 ordinary shares, representing 99.9% of the 55,047,453 outstanding ordinary shares as of January 31, 2026. The number of record holders in the United States is not representative of the number of beneficial holders nor is it representative of where such beneficial holders are resident since many of these ordinary shares were held by brokers or other nominees.
B. Related Party Transactions
Our policy is to enter into transactions with related parties on terms that, on the whole, are no more favorable, or no less favorable, than those available from unaffiliated third parties. Based on our experience in the business sectors in which we operate and the terms of our transactions with unaffiliated third parties, we believe that all of the transactions described below met this policy standard at the time they occurred.
The following is a description of our material-related party transactions since January 1, 2023.
In September 2025, we transferred certain IP assets and approximately 30 employees to a newly-formed Israeli subsidiary, into which Wix and third-party investors, including Mr. Nadav Abrahami, invested an aggregate amount of approximately $9.25 million (of which Wix invested $1.95 million), in a transaction conducted at arm’s length. Following the transfer and financing, Wix owns approximately 30% of the new company named Dazl Technologies Ltd. (“Dazl”) on a fully-diluted basis. Nadav Abrahami, the co-founder of Dazl, is the co-founder of Wix and the brother of Avishai Abrahami, the co-founder, Chief Executive Officer and director of Wix. Prior to founding and joining Dazl, Nadav Abrahami was the VP of Client Development of Wix.
Rights of Appointment
Our current board of directors consists of eight directors. We are not a party to, and are not aware of, any voting agreements among our shareholders.
Agreements with Directors and Officers
Employment Agreements
We have entered into employment agreements with each of our officers who work for us as employees. Each of these agreements contains provisions regarding noncompetition, confidentiality of information and assignment of inventions. The enforceability of covenants not to compete is subject to limitations.
The provisions of certain of our executive officers’ employment agreements contain termination or change of control provisions. With respect to certain executive officers, either we or the executive officer may terminate his or her employment by giving advance written notice of varying duration to the other party. We may also terminate an executive officer’s employment agreement for good reason (as defined in the employment agreement).
Equity Awards
Since our inception, we have granted a combination of options to purchase our ordinary shares, and/or PSUs, and/or RSUs to our officers and our directors. The award agreements evidencing such grants may contain acceleration provisions for unvested equity, which will vest immediately upon certain merger, acquisition, or change of control transactions, provided that such executive officer or director’s employment or engagement is terminated within a certain period of time following such merger or acquisition transaction, and in certain cases within a certain period of time prior to such transaction. We describe our equity plans under Item 6.B. “Directors, Senior Management and Employees—Compensation—2013 Incentive Compensation Plan.”
Exculpation, Indemnification and Insurance
Our articles of association permit us to exculpate, indemnify and insure certain of our office holders to the fullest extent permitted by the Companies Law. We have entered into agreements with certain office holders, exculpating them from a breach of their duty of care to us to the fullest extent permitted by law and undertaking to indemnify them to the fullest extent permitted by law, subject to certain exceptions.
See Item 6.C. “Directors, Senior Management and Employees—Exculpation, Insurance and Indemnification of Directors and Officers.”
Family Relationships
See Item 6.A. “Directors, Senior Management and Employees—Directors and Senior Management.”
C. Interests of Experts and Counsel
Not applicable.
ITEM 8. FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
Consolidated Financial Statements
We have appended our consolidated financial statements at the end of this annual report, starting at page F-2, as part of this annual report.
Legal Proceedings
From time to time, we have been and may be party to litigation or subject to claims incident to the ordinary course of business. We are not subject to litigation that we can currently determine might have a significant material adverse effect on our business, operating results or financial condition.
Dividend Policy
We have never declared nor paid any cash dividends on our ordinary shares. We do not anticipate paying any dividends in the near future. We currently intend to retain future earnings, if any, to finance operations and expand our business. See Item 16E. “Purchases of Equity Securities by the Issuer and Affiliated Purchasers” for a discussion of our board approved repurchase program. Our board of directors has sole discretion whether to pay dividends. If our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that our directors may deem relevant.
B. Significant Changes
No significant changes have occurred since December 31, 2025, except as otherwise disclosed in this annual report.
ITEM 9. THE OFFER AND LISTING
A. Offer and Listing Details
Our ordinary shares have been quoted on NASDAQ under the symbol “WIX” since November 6, 2013. Prior to that date, there was no public trading market for our ordinary shares.
B. Plan of Distribution
Not applicable.
C. Markets
See “—Offer and Listing Details” above.
D. Selling Shareholders
Not applicable.
E. Dilution
Not applicable.
F. Expenses of the Issue
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
A. Share Capital
Not applicable.
B. Memorandum and Articles of Association
Our authorized share capital consists of 500 million ordinary shares, par value NIS 0.01 per share, of which 55,047,453 shares are issued and outstanding as of January 31, 2026, and 12,154,435 are held in treasury. Our corporate purpose, as stated in Article 4 of our articles of association, is to engage in any lawful act or activity for which companies may be organized under the Companies Law.
A copy of our articles of association is attached as Exhibit 1.1 to this annual report on Form 20-F. The information called for by this item is set forth in Exhibit 2.1 to this annual report on Form 20-F and is incorporated herein by reference.
Transfer Agent and Registrar
The transfer agent and registrar for our ordinary shares is Equiniti Trust Company, LLC, New York, New York.
C. Material Contracts
Summaries of the following material contracts and amendments to these contracts are included in this annual report in the places indicated.
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Material Contract |
Location in This Annual Report |
2013 Incentive Compensation Plan (as amended) |
“ITEM 6.B Directors, Senior Management and Employees – Compensation – 2013 Incentive Compensation Plan.” |
Compensation Policies |
“ITEM 6.C Directors, Senior Management and Employees – Board Practices – Compensation Policies under the Companies Law.” |
Wix.com Ltd. 2013 Employee Stock Purchase Plan (as amended) |
“ITEM 6.B Directors, Senior Management and Employees – Compensation – Employee Stock Purchase Plan.” |
Form of Indemnification Agreement |
“ITEM 6.C – Directors, Senior Management and Employees – Board Practices – Exculpation, Insurance and Indemnification of Office Holders.” |
Indenture, dated as of September 11, 2025, by and between Wix.com Ltd. and U.S. Bank Trust Company, National Association, as Trustee, and Form of 0.00% Convertible Senior Notes due 2030 |
“Note 10 to our audited consolidated financial statements included in Item 18 of this annual report.” |
| Warrant Agreement, by and between Wix.com Ltd. and the initial holders listed on the signature pages thereto |
“Item 5.E. Operating and Financial Review and Prospects—Recent Developments.” |
|
Credit Agreement, dated as of March 3, 2026, by and between Wix.com Ltd. and Hapoalim
Bank Ltd.
|
“Item 5.E. Operating and Financial Review
and Prospects—Recent Developments.”
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D. Exchange Controls
Israeli residents generally may freely deal in foreign currency and foreign assets, and non-residents may freely deal in Israeli currency and Israeli assets. There are currently no Israeli currency control restrictions on remittances of dividends on the ordinary shares or the proceeds from the sale of the shares provided that all taxes were paid or withheld; however, legislation remains in effect pursuant to which currency controls can be imposed by administrative action at any time.
Non-residents of Israel may freely hold and trade our securities. Neither our articles of association nor the laws of the State of Israel restrict in any way the ownership or voting of ordinary shares by non-residents, except that such restrictions may exist with respect to citizens of countries which are in a state of war with Israel. Israeli residents are allowed to purchase our ordinary shares.
E. Taxation
The following description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of our ordinary shares. You should consult your own tax advisor concerning the tax consequences of your particular situation, as well as any tax consequences that may arise under the laws of any state, local, foreign or other taxing jurisdiction.
Israeli Tax Considerations and Government Programs
The following is a brief summary of the material Israeli tax laws applicable to us, and certain Israeli Government programs that benefit us. This summary does not discuss all the aspects of Israeli tax law that may be relevant to a particular investor in light of his or her personal investment circumstances or to some types of investors subject to special treatment under Israeli law. Examples of such investors include residents of Israel or traders in securities who are subject to special tax regimes not covered in this discussion. To the extent that the discussion is based on new tax legislation that has not yet been subject to judicial or administrative interpretation, we cannot assure you that the appropriate tax authorities or the courts will accept the views expressed in this discussion. The discussion below is subject to change, including due to amendments under Israeli law or changes to the applicable judicial or administrative interpretations of Israeli law, which change could affect the tax consequences described below.
General Corporate Tax Structure in Israel
Israeli companies are generally subject to corporate tax on their taxable income. The standard corporate tax rate for Israeli companies has been 23% since 2018.
However, the effective tax rate payable by a company that qualifies as an Industrial Company that derives income from an Approved Enterprise, a Beneficiary Enterprise or a Preferred Enterprise, a Special Preferred Enterprise, a Preferred Technology Enterprise or Special Preferred Technology Enterprise (as discussed below) may be considerably less. Capital gains derived by an Israeli company are subject to the standard corporate tax rate.
Law for the Encouragement of Industry (Taxes), 5729-1969
The Law for the Encouragement of Industry (Taxes), 5729-1969, generally referred to as the Industry Encouragement Law, provides several tax benefits for “Industrial Companies.” We believe that we currently qualify as an Industrial Company within the meaning of the Industry Encouragement Law.
The Industry Encouragement Law defines an “Industrial Company” as an Israeli resident-company, that was incorporated in Israel, which 90% or more of its income in any tax year, other than income from defense loans, is derived from an “Industrial Enterprise” owned by it and located in Israel or in the “Area,” in accordance with the definition under section 3A of the Israeli Income Tax Ordinance (New Version) 1961. An “Industrial Enterprise” is defined as an enterprise whose principal activity in a given tax year is industrial production.
The following corporate tax benefits, among others, are available to Industrial Companies:
•amortization of the cost of a purchased patent, rights to use a patent, and know-how, which are used for the development or advancement of the Industrial Enterprise, over an eight-year period, commencing on the year in which such rights were first utilized;
•under limited conditions, an election to file consolidated tax returns with controlled Israeli Industrial Companies; and
•expenses related to a public offering are deductible in equal amounts over three years commencing on the year of the offering.
Eligibility for benefits under the Industry Encouragement Law is not contingent upon approval of any governmental authority.
There can be no assurance that we will continue to qualify as an Industrial Company or that the benefits described above will be available in the future.
Law for the Encouragement of Capital Investments, 5719-1959
The Law for the Encouragement of Capital Investments, 5719-1959, generally referred to as the Investment Law, provides certain incentives for capital investments in production facilities (or other eligible assets).
The Investment Law was amended effective as of January 1, 2011, or the 2011 Amendment, and as of January 1, 2017, referred to as Amendment 73. The 2011 Amendment introduced new benefits to replace those granted in accordance with the provisions of the Investment Law in effect prior to the 2011 Amendment. Amendment 73 introduces new benefits for Technological Enterprises, alongside the existing tax benefits.
Tax Benefits under the 2011 Amendment
The 2011 Amendment cancelled the availability of the benefits granted under the Investment Law prior to 2011 and, instead, introduced new benefits for income generated by a “Preferred Company” through its “Preferred Enterprise” (as such terms are defined in the Investment Law) as of January 1, 2011. A Preferred Company is a company incorporated in Israel, that is controlled and managed from Israel, that is not fully owned by a governmental entity, and that is, among other things, an industrial company owning a Preferred Enterprise which meets certain conditions (including a minimum threshold of 25% export).
Pursuant to the 2011 Amendment, a Preferred Company was entitled to a reduced corporate tax rate of 16% unless the Preferred Enterprise was located in development area A, in which case the rate was 9% in 2014 until 2016. Since 2017 and thereafter, the corporate tax rate for a Preferred Company, which is located in development area A, was decreased to 7.5%, while the reduced corporate tax rate for other development areas remained 16%.
Dividends distributed out of income attributed to a Preferred Enterprise during 2014 and thereafter are generally subject to withholding tax at the rate of 20% or such lower rate as may be provided in an applicable tax treaty (subject to the receipt in advance of a valid certificate from the Israel Tax Authority allowing for a reduced tax rate). However, if such dividends are paid to an Israeli company, no tax is required to be withheld (however, if such dividends are subsequently distributed to individuals or non-Israeli company a withholding of 20% or such lower rate as may be provided in an applicable tax treaty, will apply).
The Technological Enterprise Incentives Regime—Amendment 73 to the Investment Law
In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016, which includes Amendment 73 to the Law, or Amendment 73, was published.
The tax tracks under the Amendment are as follows: Technological Preferred Enterprise - an enterprise for which total consolidated revenues of its parent company and all subsidiaries are less than NIS 10 billion. A technological preferred enterprise, as defined in the Law, which is located in the center of Israel will be subject to tax at a rate of 12% on profits deriving from qualifying intellectual property (in development area - A tax rate of 7.5%). Special Technological Preferred Enterprise - an enterprise for which total consolidated revenues of its parent company and all subsidiaries exceed NIS 10 billion. Such enterprise will be subject to tax at a rate of 6% on profits deriving from qualifying intellectual property, regardless of the enterprise's geographical location. The new incentives regime applies to “Preferred Technological Enterprises” that meet certain conditions, including, inter alia:
1.The R&D expenses constituted at least an average of 7% of total revenues , or at least NIS 75 million (approximately $23 million) in R&D activities; and
2.One of the following:
◦At least 20% of the workforce (or at least 200 employees) are employed in R&D;
◦A venture capital investment approximately equivalent to at least NIS 8 million (approximately $2.6 million) was previously made in the company; or
◦Growth in sales or workforce by an average of 25% over the three years preceding the tax year.
A “Special Preferred Technological Enterprise” is an enterprise that meets, inter alia conditions 1 and 2 above, and in addition has total annual consolidated revenues above NIS 10 billion (approximately $3.2 billion).
Income not eligible for Preferred Enterprise benefits is taxed at the regular corporate tax rate, which has been 23% since 2018.
In 2025, we generated taxable income in Israel, and we generally meet the conditions of a “Preferred Technological Enterprise.” Accordingly, our taxable income in Israel, should be subject to tax at the rate of 12% (and 7.5% with respect to income attributed to development area A).
Tax Benefits for Research and Development
Israeli tax law allows, under certain conditions, a tax deduction for expenditures related to scientific research, including capital expenditures, in the year in which they are incurred. Expenditures are deemed related to scientific research and development projects, if:
•the expenditures are approved by the relevant Israeli government ministry, determined by the field of research;
•the research and development must be for the promotion or development of the company; and
•the research and development is carried out by or on behalf of the company seeking such tax deduction.
The amount of such deductible expenses is reduced by the sum of any funds received through government grants for the financing of such scientific research and development projects. No deduction under these research and development deduction rules is allowed if such deduction is related to an expense invested in an asset depreciable under the general depreciation rules of the Israeli Tax Ordinance. Expenditures related to research for the promotion or development of the company not so approved, are deductible in equal amounts over three years.
We intend to apply the Innovation Authority for approval to allow a tax deduction for most or all of our research and development expenses incurred in 2025. There can be no assurance that such application will be accepted.
Special Provisions Relating to Taxation under Inflationary Conditions
Commencing in taxable year 2014, the Company has elected to measure its taxable income and file its tax return under the Israeli Income Tax Regulations (Principles Regarding the Management of Books of Account of Foreign Invested Companies and Certain Partnerships and the Determination of Their Taxable Income), 1986. Such an elective obligates the Company for three years. Accordingly, commencing taxable year 2014, results for tax purposes are measured in terms of earnings in United States Dollars.
Excess Tax
Subject to the provisions of an applicable tax treaty, individuals who are subject to tax in Israel (whether any such individual is an Israeli resident or non-Israeli resident) are also subject to an additional tax at a rate of 3% on annual income (including, but not limited to, dividends, interest and capital gain) exceeding NIS 721,560 for 2025, which amount is generally linked to the annual change in the Israeli consumer price index. In addition, the portion of an individual’s annual income from capital sources (e.g., capital gains, real estate appreciation, dividends, interest, CPI linkage differentials, rental income, passive royalties, etc.) exceeding a certain threshold (NIS 721,560 in 2025) is subject to an additional surtax of 2%. It should be emphasized that with respect to non-Israeli residents, these surtaxes apply to Israeli source income (unless such income is exempt under Israeli domestic law or an applicable tax treaty).
Taxation of our Shareholders
Capital Gains Taxes Applicable to Non-Israeli Resident Shareholders
A non-Israeli resident who derives capital gains from the sale of shares in an Israeli resident company that were purchased after the company was listed for trading on a stock exchange outside of Israel will be exempt from Israeli tax so long as the gain from the sale of such shares was not attributed to a permanent establishment that the non-resident maintains in Israel. However, non-Israeli corporations will not be entitled to the foregoing exemption if Israeli residents: (i) have a controlling interest of more than 25% in such non-Israeli corporation or (ii) are the beneficiaries of, or are entitled to, 25% or more of the revenues or profits of such non-Israeli corporation, whether directly or indirectly. In addition, such exemption is not applicable to a person whose gains from selling or otherwise disposing of the shares are deemed to be business income.
Additionally, a sale of securities by a non-Israeli resident may be exempt from Israeli capital gains tax under the provisions of an applicable tax treaty. For example, under Convention Between the Government of the United States of America and the Government of the State of Israel with respect to Taxes on Income, as amended, or the United States-Israel Tax Treaty, the sale, exchange or other disposition of shares by a shareholder who is a United States resident (for purposes of the treaty) holding the shares as a capital asset and is entitled to claim the benefits afforded to such a resident by the U.S.-Israel Tax Treaty, or a Treaty U.S. Resident, is generally exempt from Israeli capital gains tax unless: (i) the capital gain arising from such sale, exchange or disposition is attributed to real estate located in Israel; (ii) the capital gain arising from such sale, exchange or disposition is attributed to royalties; (iii) the capital gain arising from such sale, exchange or disposition is attributed to a permanent establishment in Israel, under certain terms; (iv) such Treaty U.S. Resident holds, directly or indirectly, shares representing 10% or more of the voting capital during any part of the 12-month period preceding the disposition, subject to certain conditions; or (v) such Treaty U.S. Resident is an individual and was present in Israel for 183 days or more during the relevant taxable year.
In some instances, where our shareholders may be liable for Israeli tax on the sale of their ordinary shares, the payment of the consideration may be subject to the withholding of Israeli tax. Shareholders may be required to demonstrate that they are exempt from tax on their capital gains in order to avoid withholding tax at the time of sale (i.e., resident certificate or other documentation required by the ITA).
Taxation of Non-Israeli Shareholders on Receipt of Dividends
Non-Israeli residents (whether individuals or corporations) are generally subject to Israeli income tax on the receipt of dividends paid on our ordinary shares at the rate of 25%, which tax will be withheld at source, unless relief is provided in a treaty between Israel and the shareholder’s country of residence (subject to the receipt in advance of a valid certificate from the ITA allowing for a reduced tax rate). With respect to a person who is a “Substantial Shareholder” at the time of receiving the dividend or at any time during the preceding 12 months, the applicable tax rate is 30%. A “Substantial Shareholder” is generally a person who alone or together with such person’s relative or another person who collaborates with such person on a permanent basis, holds, directly or indirectly, at least 10% of any of the “Means of Control” of the corporation. “Means of Control” generally include the right to vote, receive profits, nominate a director or an executive officer, receive assets upon liquidation, or order someone who holds any of the aforesaid rights how to act, regardless of the source of such right. Such dividends are generally subject to Israeli withholding tax at a rate of 25% so long as the shares are registered with a nominee company (whether the recipient is a Substantial Shareholder or not) and, subject to the receipt in advance of a valid certificate from the ITA allowing for a reduced tax rate, 20% if the dividend is distributed from income attributed to a Preferred Enterprise or a Preferred technological Enterprise, and 4% under certain conditions, mainly if the dividend distributed to a non-Israeli corporation from income attributed to a Preferred Technological Enterprise provided that at least 90% of the distributing company is held directly by non-Israeli companies, unless a reduced tax rate is provided under an applicable tax treaty. For example, under the U.S.-Israel Tax Treaty, the maximum rate of tax withheld at source in Israel on dividends paid to a holder of our ordinary shares who is a Treaty U.S. Resident is 25%. However, generally, the maximum rate of withholding tax on dividends, not generated by a Preferred Enterprise, that are paid to a United States corporation holding 10% or more of the outstanding voting capital throughout the tax year in which the dividend is distributed as well as during the previous tax year, is 12.5%, provided that not more than 25% of the gross income for such preceding year consists of certain types of dividends and interest. Notwithstanding the foregoing, dividends distributed from income attributed to a Preferred Enterprise are not entitled to such reduction under the tax treaty but are subject to a withholding tax rate of 15% for a shareholder that is a U.S. corporation, provided that the conditions related to 10% or more holding and to our gross income for the previous year (as set forth in the previous sentence) is met. If the dividend is attributable partly to income derived from an Approved Enterprise, Benefited Enterprise or Preferred Enterprise, and partly to other sources of income, the withholding rate will be a blended rate reflecting the relative portions of the two types of income. We cannot assure you that we will designate the profits that we may distribute in a way that will reduce shareholders’ tax liability.
A non-Israeli resident who receives dividends from which tax was withheld is generally exempt from the obligation to file tax returns in Israel with respect to such income, provided that (i) such income was not generated from business conducted in Israel by the taxpayer, (ii) the taxpayer has no other taxable sources of income in Israel with respect to which a tax return is required to be filed, and (iii) the taxpayer is not obligated to pay excess tax.
United States Federal Income Tax Considerations
The following summary describes certain U.S. federal income tax considerations generally applicable to U.S. Holders (as defined below) of our ordinary shares. This summary deals only with our ordinary shares held as capital assets within the meaning of Section 1221 of the Code. This summary also does not address the tax consequences that may be relevant to holders in special tax situations including, without limitation, dealers in securities, traders that elect to use a mark-to-market method of accounting, holders that own our ordinary shares as part of a “straddle,” “hedge,” “conversion transaction,” or other integrated investment, banks or other financial institutions, individual retirement accounts and other tax-deferred accounts, insurance companies, tax-exempt organizations, U.S. expatriates, holders whose functional currency is not the U.S. dollar, holders subject to the alternative minimum tax, holders that acquired our ordinary shares in a compensatory transaction, holders subject to special tax accounting rules as a result of any item of gross income with respect to the ordinary shares being taken into account in an applicable financial statement, holders of 2030 Convertible Notes or ordinary shares acquired upon a conversion of 2030 Convertible Notes, or holders that actually or constructively own 10% or more of the total voting power or value of our shares.
This summary is based upon the Code, applicable U.S. Treasury regulations, administrative pronouncements and judicial decisions, in each case as in effect on the date hereof, all of which are subject to change (possibly with retroactive effect). This summary does not address any U.S. tax consequences other than U.S. federal income tax consequences (such as the estate and gift tax or the Medicare tax on net investment income).
As used herein, the term “U.S. Holder” means a beneficial owner of our ordinary shares that is, for U.S. federal income tax purposes: (i) an individual who is a citizen or resident of the United States, (ii) a corporation or other entity taxable as a corporation created or organized under the laws of the United States or any state thereof or therein or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust (a) that is subject to the supervision of a court within the United States and the control of one or more United States persons as described in Section 7701(a)(30) of the Code, or (b) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.
If an entity or other arrangement treated as a partnership for U.S. federal income tax purposes acquires our ordinary shares, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Partners of a partnership considering an investment in our ordinary shares should consult their tax advisor regarding the U.S. federal income tax consequences of acquiring, owning, and disposing of our ordinary shares.
THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR GENERAL INFORMATION ONLY. ALL PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING OUR ORDINARY SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND NON-U.S. TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.
Dividends
Subject to the discussion below under “—Passive Foreign Investment Company,” the gross amount of dividends (including the amount of any Israeli taxes withheld therefrom) paid to a U.S. Holder with respect to our ordinary shares generally will be included in the U.S. Holder’s gross income as ordinary income from foreign sources to the extent paid out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Distributions in excess of earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. Holder’s adjusted tax basis in our ordinary shares and thereafter as capital gain. However, we do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, U.S. Holders should expect that a distribution will generally be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.
The amount of any distribution paid in a currency other than U.S. dollars including the amount of any withholding tax thereon, will be included in the gross income of a U.S. Holder in an amount equal to the U.S. dollar value of the foreign currency calculated by reference to the exchange rate in effect on the date of receipt, regardless of whether the foreign currency is converted into U.S.
dollars on the date of receipt. If the foreign currency is converted into U.S. dollars on the date of receipt, a U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect of the distribution. If the foreign currency received in the distribution is not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any gain or loss on a subsequent conversion or other disposition of the foreign currency will be treated as ordinary income or loss.
Dividends paid to a U.S. Holder with respect to our ordinary shares generally will be treated as foreign source income that is “passive category income,” which may be relevant in calculating a U.S. Holder’s foreign tax credit limitation. Subject to certain conditions and limitations, Israeli taxes withheld on dividends may be credited against a U.S. Holder’s United States federal income tax liability or, at such U.S. Holder’s election, be deducted from its U.S. federal taxable income. An election to deduct creditable foreign taxes instead of claiming foreign tax credits applies to all such foreign taxes paid or accrued in the taxable year. Certain U.S. Treasury regulations have imposed additional requirements that must be met for a foreign tax to be creditable. However, subsequent notice from the IRS has indicated that the U.S. Department of the Treasury and the IRS are considering proposing amendments to such regulations and allows, subject to certain conditions, taxpayers to defer the application of many aspects of such regulations for taxable years beginning on or after December 28, 2021 and ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance). The rules relating to the determination of the foreign tax credit are complex, and U.S. Holders should consult their tax advisor to determine whether and to what extent, they will be entitled to this credit or to a deduction in lieu of a credit.
Dividends paid to a non-corporate U.S. Holder by a “qualified foreign corporation” may be subject to reduced rates of taxation if certain holding period and other requirements are met. “A qualified foreign corporation” generally includes a foreign corporation (other than a foreign corporation that is a PFIC (as defined below) with respect to the relevant U.S. Holder for the taxable year in which the dividends are paid or for the preceding taxable year) (i) whose ordinary shares are readily tradable on an established securities market in the United States, or (ii) which is eligible for benefits under a comprehensive U.S. income tax treaty that includes an exchange of information program and which the U.S. Treasury Department has determined is satisfactory for these purposes. Our ordinary shares are currently listed on the NASDAQ Global Select Market, an established securities market. U.S. Holders should consult their own tax advisor regarding the availability of the reduced tax rate on dividends in light of their particular circumstances. The dividends will not be eligible for the dividends received deduction available to corporations in respect of dividends received from other U.S. corporations.
Disposition of Our Ordinary Shares
Subject to the discussion below under “—Passive Foreign Investment Company,” a U.S. Holder generally will recognize capital gain or loss for U.S. federal income tax purposes on the sale or other taxable disposition of our ordinary shares equal to the difference, if any, between the amount realized and the U.S. Holder’s adjusted tax basis in ordinary shares. In general, capital gains recognized by a non-corporate U.S. Holder, including an individual, are subject to a lower rate under current law if such U.S. Holder held shares for more than one year. The deductibility of capital losses is subject to limitations. Any such gain or loss generally will be treated as U.S. source income or loss for purposes of the foreign tax credit. A U.S. Holder’s initial tax basis in shares generally will equal the cost of such shares.
Passive Foreign Investment Company
In general, a non-U.S. corporation will be classified as a PFIC for any taxable year if at least (i) 75% of its gross income is classified as “passive income,” or (ii) 50% of its assets (determined on the basis of a quarterly average) produce or are held for the production of passive income. For these purposes, passive income generally includes interest, dividends, royalties, rents, gains from commodities and securities transactions, and the excess of gains over losses from the disposition of assets which produce passive income. In making this determination, the non-U.S. corporation is treated as earning its proportionate share of any income and owning its proportionate share of any assets of any corporation in which it holds a 25% or greater interest. Based on the trading price of our ordinary shares and the composition of our income, assets and operations, we do not expect to be classified as a PFIC for the taxable year that ended on December 31, 2025, or for the current taxable year. However, the determination of whether we are a PFIC is a factual determination that is made annually, after the close of the taxable year. Moreover, the value of our assets for purposes of the PFIC determination generally will be determined by reference to the public price of our ordinary shares, which may fluctuate significantly. Therefore, there is no assurance that we would not be classified as a PFIC for any taxable year due to, for example, changes in the composition of our assets or income, as well as changes in our market capitalization. Under the PFIC rules, if we were considered a PFIC at any time that a U.S. Holder holds our ordinary shares, we would continue to be treated as a PFIC with respect to such holder’s investment unless (i) we cease to be a PFIC, and (ii) the U.S. Holder has made a “deemed sale” election under the PFIC rules.
If we are considered a PFIC for any taxable year that a U.S. Holder holds our ordinary shares, any gain recognized by the U.S. Holder on a sale or other disposition of our ordinary shares would be allocated pro rata over the U.S. Holder’s holding period for the ordinary shares. The amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed. Further, to the extent that any distribution received by a U.S. Holder on our ordinary shares exceeds 125% of the average of the annual distributions on the ordinary shares received during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, that distribution would be subject to taxation in the same manner as gain on the sale or other disposition of ordinary shares if we were a PFIC, described above. Certain elections may be available that would result in alternative treatments (such as mark-to-market treatment) of the ordinary shares. If we are treated as a PFIC with respect to a U.S. Holder for any taxable year, the U.S. Holder will be deemed to own shares in any of our subsidiaries that also are PFICs. However, because a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder generally will continue to be subject to the PFIC rules discussed above with respect to its indirect interest in any of our subsidiaries that also are PFICs. A timely election to treat us as a qualified electing fund under the Code would result in an alternative treatment. However, we do not intend to prepare or provide the information that would enable U.S. Holders to make a qualified electing fund election. If we are considered a PFIC, a U.S. Holder also will be subject to annual information reporting requirements. U.S. Holders should consult their own tax advisor about the potential application of the PFIC rules to an investment in the ordinary shares and the availability of any of the elections described above.
Information Reporting and Backup Withholding
Distributions on, and proceeds paid, from the sale or other taxable disposition of ordinary shares may be subject to information reporting to the IRS. In addition, a U.S. Holder (other than exempt holders who establish their exempt status if required) may be subject to backup withholding on cash payments received in connection with dividend payments and proceeds from the sale or other taxable disposition of our ordinary shares made within the United States or through certain U.S.-related financial intermediaries.
Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number, makes other required certification and otherwise complies with the applicable requirements of the backup withholding rules. Backup withholding is not an additional tax. Rather, any amount withheld under the backup withholding rules will be creditable or refundable against the U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.
Foreign Financial Asset Reporting
Certain U.S. Holders are required to report their holdings of certain foreign financial assets, including equity of foreign entities, if the aggregate value of all of these assets exceeds certain threshold amounts. The ordinary shares are expected to constitute foreign financial assets subject to these requirements unless the ordinary shares are held in an account at certain financial institutions. U.S. Holders should consult their tax advisor regarding the application of these reporting requirements, and the significant penalties for non-compliance.
F. Dividends and Paying Agents
Not applicable.
G. Statement by Experts
Not applicable.
H. Documents on Display
We are currently subject to the informational requirements of the Exchange Act applicable to foreign private issuers and fulfill the obligations of these requirements by filing reports with the SEC. As a foreign private issuer, we are exempt from the rules under the Exchange Act relating to the furnishing and content of proxy statements, our principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act, and our officers and directors are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we are required to file with the SEC, within 120 days after the end of each subsequent fiscal year, an annual report on Form 20-F containing financial statements which will be examined and reported on, with an opinion expressed, by an independent public accounting firm. We also furnish with the SEC reports on Form 6-K containing quarterly unaudited financial information.
Our SEC filings are available to you on the SEC’s website at http://www.sec.gov. This site contains reports and other information regarding issuers that file electronically with the SEC. The information on that website is not part of this annual report and is not incorporated by reference herein.
I. Subsidiary Information
Not applicable.
J. Annual Reports to Securities Holders
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to a variety of risks, including foreign currency exchange fluctuations, changes in interest rates and inflation. We regularly assess currency, interest rate and inflation risks to minimize any adverse effects on our business as a result of those factors.
Foreign Currency Risk
Our results of operations and cash flows are affected by fluctuations due to changes in foreign currency exchange rates. In 2025, approximately 65% of our revenues were denominated in U.S. dollars and approximately 35% in other currencies, primarily in Euros, British Pounds, Japanese Yen, Mexican Pesos, Canadian Dollar, Australian Dollar and the Brazilian Real. In addition, in 2025, approximately 66% of our cost of revenues and operating expenses were denominated in U.S. dollars and approximately 27% in New Israeli Shekels. Our NIS-denominated expenses consist primarily of personnel and overhead costs. Since a significant portion of our expenses are denominated in NIS, any appreciation of the NIS relative to the U.S. dollar would adversely impact our net loss or net income (if any).
We collect payments from our users through various payment processors in multiple currencies. In most cases, our payment processors remit these funds to us in their original currencies without converting them to U.S. Dollars. We subsequently convert these currencies to U.S. Dollars or utilize them directly for our business operations as needed.
Consequently, we are exposed to exchange rate fluctuations between these foreign currencies and the U.S. Dollar during the period between receipt and conversion or utilization of these funds. Even in instances where payment processors do convert customer payments to U.S. Dollars before remitting them to us, we may still incur currency conversion fees and remain subject to exchange rate risks in our global operations.
The following table presents information about the changes in the exchange rates of the NIS against the U.S. dollar:
|
|
|
|
|
|
|
Change in Average Exchange Rate of the NIS
Against the U.S. dollar (%) |
Period |
|
2025 |
(6.7) |
|
| 2024 |
0.3 |
2023 |
9.9 |
| 2022 |
4.0 |
2021 |
(6.0) |
The figures above represent the change in the average exchange rate in the given period compared to the average exchange rate in the immediately preceding period. Negative figures represent depreciation of the U.S. dollar compared to the NIS.
A 10% increase (decrease) in the value of the NIS against the U.S. dollar would have decreased (increased) our net income by approximately $53.4 million in 2025. We estimate that a 10% concurrent devaluation of the Euros, British Pound, Brazilian Real, Japanese Yen, Mexican Pesos, Australian Dollar and Canadian Dollar against the U.S. dollar would have decreased our net income by approximately $64.6 million in 2025.
To protect against the increase in value of forecasted foreign currency cash flow resulting from expenses paid in NIS during the year, we have instituted a foreign currency cash flow hedging program.
We hedge certain portions of the anticipated payroll of our Israeli employees and Israeli suppliers denominated in NIS for a period of one to 12 months, as well as portions of our headquarter lease payments denominated in NIS, with forward and option contracts as well as other financial instruments. In addition, we hedge a portion of our revenue transactions denominated in euros and British pounds. See Note 2(n) of our audited consolidated financial statements included in Item 18 of this annual report.
Our results of operations may also be impacted by currency translation gains and losses on monetary assets and liabilities, primarily cash and cash equivalents and restricted deposits denominated in currencies other than the U.S. dollar. Any such gains or losses only impact the dollar value of our non-dollar denominated cash and cash equivalents and restricted deposits and result from changes in reported values due to exchange rate fluctuations between the beginning and the end of reporting periods. As of December 31, 2025, we had $1.26 billion of cash and cash equivalents, restricted cash and deposits and marketable securities denominated in U.S. dollars and $402.6 million denominated in other currencies, primarily Israeli Shekel, Euro, British Pounds, Japanese Yen and the Brazilian Real.
Other Market Risks
We do not believe we have material exposure to interest rate risk due to the fact that we have no long-term borrowings that incur interest.
We do not believe we have any material exposure to inflationary risks.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
ITEM 15. CONTROLS AND PROCEDURES
Disclosure controls and procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2025. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2025, our disclosure controls and procedures were effective such that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s annual report on internal control over financial reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, our management used the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our management has concluded, based on its assessment, that our internal control over financial reporting was effective as of December 31, 2025 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes, in accordance with generally accepted accounting principles.
In accordance with guidance issued by the SEC staff, companies are permitted to exclude acquisitions from their final assessment of internal control over financial reporting for the first fiscal year in which the acquisition occurred. Accordingly, our management's evaluation of internal control over financial reporting excluded the internal control activities of Base44 which is included in the 2025 consolidated financial statements and constituted less than 1% of total assets excluding goodwill and intangible assets as of December 31, 2025, and less than 1% of revenues for the year then ended.
Attestation report of the registered public accounting firm
Our independent registered public accounting firm, Kost Forer Gabbay & Kasierer, a member of Ernst & Young Global, has audited the consolidated financial statements included in this annual report on Form 20-F, and as part of its audit, has issued its attestation report regarding the effectiveness of our internal control over financial reporting as of December 31, 2025. The report of Kost Forer Gabbay & Kasierer is included with our consolidated financial statements included elsewhere in this annual report and is incorporated herein by reference.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting that occurred during the period covered by this annual report that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that Ron Gutler qualifies as an audit committee financial expert, as defined by the rules of the SEC and has the requisite financial experience defined by the NASDAQ Marketplace Rules. In addition, Mr. Gutler is independent as such term is defined in Rule 10A-3(b)(1) under the Exchange Act and under the listing standards of the NASDAQ Global Market.
ITEM 16B. CODE OF ETHICS
We have adopted a code of ethics and proper business conduct applicable to our executive officers, directors and all other employees, full-time contractors and service providers. A copy of the code is delivered to every employee of Wix.com Ltd. and all of its subsidiaries and is available to investors and others on our website at http://investors.wix.com or by contacting our investor relations department. Any amendments or waivers of this code for executive officers or directors will be disclosed within five business days following the date of such amendment or waiver on our website. We have also implemented a training program for new and existing employees concerning the code of ethics and proper business conduct. We did not grant any waivers under our code of ethics in 2025.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
We paid the following fees for professional services rendered by Kost Forer Gabbay & Kasierer, a member or Ernst & Young Global, an independent registered public accounting firm, for the years ended December 31, 2024 and 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
2025 |
2024 |
|
|
(in USD thousands) |
|
Audit Fees (1) |
1,274 |
1,085 |
|
Audit-Related Fees (2) |
25 |
24 |
|
Tax Fees (3) |
290 |
200 |
|
All Other Fees |
375 |
- |
|
Total |
1,964 |
1,309 |
|
(1) “Audit fees” are the aggregate fees paid for the audit of our annual financial statements. This category also includes services that generally the independent accountant provides, such as consents and assistance with and review of documents filed with the SEC.
(2) “Audit-related fees” are the aggregate fees paid for assurance and related services that are reasonably related to the performance of the audit and are not reported under audit fees. These fees primarily include accounting consultations regarding the accounting treatment of matters that occur in the regular course of business, implications of new accounting pronouncements and other accounting issues that occur from time to time.
(3) “Tax fees” include fees for professional services rendered by our independent registered public accounting firm for tax compliance and tax advice on actual or contemplated transactions.
Our audit committee has adopted a pre-approval policy for the engagement of our independent accountant to perform certain audit and non-audit services. Pursuant to this policy, which is designed to assure that such engagements do not impair the independence of our auditors, the audit committee pre-approves annually a catalog of specific audit and non-audit services in the categories of audit service, audit-related service and tax services that may be performed by our independent accountants.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
During 2025, we repurchased 3,543,902 ordinary shares for an aggregate purchase price of $575 million under our repurchase programs authorized by our board of directors and announced in July 2024 and February 2025 (increased in August 2025). The table below provides detailed information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Period |
(a) Total Number
of
Shares (or Units)
Purchased (1)
|
(b) Average Price
per
Share (or Units) |
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1) |
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
| January 1 – January 31 |
868,026 |
|
$ |
230.41 |
|
868,026 |
|
$ |
28.64 |
|
| February 1 – February 28 |
— |
|
$ |
— |
|
— |
|
$ |
28.64 |
|
| March 1 – March 31 |
— |
|
$ |
— |
|
— |
|
$ |
28.64 |
|
| April 1 – April 30 |
— |
|
$ |
— |
|
— |
|
$ |
28.64 |
|
| May 1 – May 31 |
646,452 |
|
$ |
154.69 |
|
646,452 |
|
$ |
100,000,070.08 |
|
| June 1 – June 30 |
— |
|
$ |
— |
|
— |
|
$ |
100,000,070.08 |
|
| July 1 – July 31 |
— |
|
$ |
— |
|
— |
|
$ |
300,000,070.08 |
|
| August 1 - August 31 |
790,779 |
|
$ |
126.46 |
|
790,779 |
|
$ |
400,000,181.25 |
|
| September 1 - September 30 |
489,939 |
|
$ |
153.08 |
|
489,939 |
|
$ |
325,000,319.25 |
|
| October 1 – October 31 |
748,706 |
|
$ |
133.56 |
|
748,706 |
|
$ |
225,000,979.36 |
|
| November 1- November 30 |
— |
|
$ |
— |
|
— |
|
$ |
225,000,979.36 |
|
| December 1 – December 31 |
— |
|
$ |
— |
|
— |
|
$ |
225,000,979.36 |
|
Total |
3,543,902 |
|
$ |
162.25 |
|
3,543,902 |
|
|
(1) All ordinary shares were purchased pursuant to our publicly announced $200 million repurchase plan, including subsequent increases.
In March and July 2024, our board of directors authorized repurchase programs under which up to an aggregate of $425 million was available to purchase our ordinary shares and/or convertible notes. In January 2025, we completed the entirety of the $200 million repurchase amount.
In February 2025, our board of directors authorized a new repurchase program under which up to $200 million was available to purchase our ordinary shares and/or convertible notes, and in May August 2025, our board of directors authorized increases to such program by an additional amount of $400 million in aggregate. In January 2026, our board of directors authorized a two-year repurchase program under which up to a total of $2 billion is available to purchase the Company’s ordinary shares and/or convertible notes (inclusive of any unused amounts under the prior repurchase program) and, on March 5, 2026, we announced that we commenced a “modified Dutch Auction” tender offer to purchase up to $1.75 billion in aggregate purchase price of our ordinary shares (as more fully described in Item 5.E. “Operating and Financial Review and Prospects—Recent Developments”). The specific timing and amount of repurchases under the repurchase program, whether pursuant to such tender offer or otherwise, will depend upon several factors, including market and business conditions, the trading price of our ordinary shares, and the nature of other investment opportunities. In addition, our ability to repurchase may be limited by law, action by creditors, regulatory authority or agreements with third parties.
Repurchases may take place in open market transactions or in privately negotiated transactions and may be made from time to time depending on market conditions, share price, trading volume and other factors our board of directors deems appropriate. Our board of directors may also suspend and/or discontinue the repurchase program at any time, in its sole discretion. All repurchases will be made in accordance with all applicable securities laws and regulations.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
None.
ITEM 16G. CORPORATE GOVERNANCE
As a foreign private issuer, we are permitted to comply with Israeli corporate governance practices instead of the NASDAQ Stock Market requirements, provided that we disclose those NASDAQ Stock Market requirements with which we do not comply and the equivalent Israeli requirement that we follow instead. We currently rely on this “foreign private issuer exemption” as follows:
Quorum Requirements. As permitted under the Companies Law, pursuant to our articles of association, the quorum required for an ordinary meeting of shareholders consists of at least two shareholders present in person, by proxy or, for certain types of shareholders’ resolutions, by written ballot, who hold or represent between them at least 25% of the voting power of our shares, instead of 331/3% of the issued share capital provided under the NASDAQ Listing Rule 5620(c).
Distribution of Annual and Interim Reports. Unlike NASDAQ Listing Rule 5250(d), which requires listed issuers to make annual and quarterly reports available to shareholders in one of a number of specific manners, Israeli law does not require us to distribute such reports directly to shareholders, and the generally accepted business practice in Israel is not to distribute such reports to shareholders but to make such reports available through a public website. In addition, we will make our annual report containing audited financial statements available to our shareholders at our offices (in addition to a public website).
Shareholder Approval. We have elected to follow Israeli corporate governance practice instead of NASDAQ Listing Rule 5635, which requires listed issuers to obtain shareholder approval for (i) an acquisition of shares or assets of another company that involves the issuance of 20% or more of the listed company’s shares or voting rights, or if a director, officer or 5% shareholder has greater than a 5% interest (or greater than a 10% interest held by such persons collectively) in the target company or the consideration to be received; (ii) the issuance of shares leading to a change of control; (iii) the establishment or amendment of certain equity-based compensation plans and arrangements, and (iv) an issuance of securities, other than in a public offering, equal to 20% or more of the voting power outstanding at a price that is less than the minimum price defined therein. Under Israeli law and practice, in general, the approval of the board of directors is required for the establishment or amendment of equity based compensation plans and arrangements. In addition, rather than follow NASDAQ rules requiring shareholder approval for the issuance of securities in the circumstances described above, we follow Israeli law, under which a private placement of securities requires approval by our board of directors and shareholders if it will cause a person to become a controlling shareholder (generally presumed at 25% ownership) or if:
•the securities issued amount to 20% or more of our outstanding voting rights before the issuance; and
•some or all of the consideration is other than cash or listed securities or the transaction is not in accordance with market terms; and
•the transaction will increase the relative holdings of a shareholder that holds 5% or more of our outstanding share capital or voting rights or that will cause any person to become, as a result of the issuance, a holder of more than 5% of our outstanding share capital or voting rights.
In addition, under Israeli law, the issuance of securities resulting in a person exceeding 25% of our voting rights or 45% of our voting rights requires the approval of the shareholders with limited statutory exceptions. For a detailed description of the requirements, see Exhibit 2.1 to the Annual Report.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J. INSIDER TRADING POLICIES
We have adopted an Insider Trading Policy that governs the purchase, sale, and/or other dispositions of our securities by directors, officers, employees, and full-time contractors that is reasonably designed to promote compliance with applicable insider trading laws, rules, regulations and listing standards.
A copy of our Insider Trading Policy is included as Exhibit 11.1 to this annual report on Form 20-F.
ITEM 16K. CYBERSECURITY
Cybersecurity Risk Management and Strategy
We have developed and implemented a cybersecurity risk management framework designed to protect the confidentiality, integrity, and availability of our critical systems and information.
Our information security controls and practices are reviewed against globally recognized standards: ISO 27001, ISO 27017, ISO 27701, ISO 27018, and SOC 2 Type II. Our commitment also extends to maintaining a PCI DSS certification for payment transaction security, risk assessments, training for employees, and other safeguards and controls.
Generally, we design and assess our cybersecurity risk management framework based on the cybersecurity frameworks of the Center for Internet Security (CIS), and our application security is based on Open Worldwide Application Security Project (OWASP) frameworks. While we may not always meet every technical standard, specification and requirement specified in these frameworks and standards at all times, we use these frameworks and standards to help us identify, assess, and manage cybersecurity risks relevant to our business.
Our cybersecurity risk management framework is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Key elements of our cybersecurity risk management framework include, but are not limited to:
•risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment;
•a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;
•internal and external testing of our cybersecurity posture;
•security tools deployed in our information technology environment to protect the confidentiality, integrity, and availability of our critical systems and information and monitor cybersecurity threats;
•the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes;
•processes to integrate cybersecurity risk management within the company’s product and software development processes;
•cybersecurity awareness training of our employees;
•a bug bounty program;
•a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and
•a third-party risk management process for service providers, suppliers, and vendors who have access to our critical systems and information.
We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. See “Risks Related to Privacy, Data and Cybersecurity.” However, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Cybersecurity Governance
Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated to our audit committee oversight of cybersecurity and other information technology risks.
Our audit committee oversees management’s implementation of our cybersecurity risk management program.
Our audit committee receives periodic reports from management on our cybersecurity risks. In addition, management updates our audit committee, where it deems appropriate, regarding cybersecurity incidents it considers to be significant.
Our audit committee chair reports to the full board of directors regarding its activities, including those related to cybersecurity. Our audit committee chair also receives more specific briefings from management on our cybersecurity risk management efforts. The full board of directors also periodically receives briefings from on our cyber risk management program.
The company's cybersecurity policies, procedures, and strategies primarily are implemented by the company's information security department, which reports directly to the CISO. Other personnel and departments in the company also assist with cybersecurity risk management, including but not limited to the company's technology organization.
Our management team, including the CISO, who holds over 15 years of experience in information technology and cybersecurity and has extensive experience in assessing, identifying, and managing cybersecurity-related risks and implementing cybersecurity-related policies and strategies, and the Chief Technology Officer, who has over 25 years of experience in information technology in connection with its cybersecurity process, are responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management framework and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our management team’s experience includes working in management roles related to cybersecurity, risk, and data privacy in various leading global companies and in military roles, as well as industry certifications such as ISC², CISSP, and MCSE.
Our management team stays informed about and monitors efforts designed to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools that we deploy.
PART III
ITEM 17. FINANCIAL STATEMENTS
Not applicable.
ITEM 18. FINANCIAL STATEMENTS
See pages F-2 through F-80 of this annual report.
ITEM 19. EXHIBITS
See exhibit index incorporated herein by reference.
ANNUAL REPORT ON FORM 20-F
INDEX OF EXHIBITS
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101.PRE |
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SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
Wix.com Ltd.
Date: March 5, 2026 By: /s/ AVISHAI ABRAHAMI
Avishai Abrahami
Co-Founder, Chief Executive Officer and Director
WIX.COM LTD. AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2025
INDEX
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F-2 - F-5 |
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F-6 - F-7 |
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F-8 |
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F-9 |
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F-10 - F-11 |
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F-12 - F-80 |
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Kost Forer Gabbay & Kasierer
144 Menachem Begin Road,
Tel-Aviv 6492102, Israel
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Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com |
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of WIX.COM LTD.
Opinion on the Financial Statements
- - - - - - - - - - -We have audited the accompanying consolidated balance sheets of Wix.com Ltd. and its subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, changes in shareholders' equity (deficiency) and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 5, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
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Kost Forer Gabbay & Kasierer
144 Menachem Begin Road,
Tel-Aviv 6492102, Israel
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Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com |
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Revenue recognition |
Description of the Matter |
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As described in Note 2r to the consolidated financial statements, the Company's revenue derives from Creative Subscriptions and Business Solutions. Creative Subscriptions revenues are primarily generated from the sale of monthly, yearly and multi-year premium subscriptions for the Company’s website solutions. Business Solutions revenues are generated from the sale of additional products and services that are offered to users to help them manage and grow their business online. The Company’s revenue recognition process involves several applications responsible for the initiation, processing, and recording of transactions from the Company’s various sales channels, and the calculation of revenue in accordance with the Company’s accounting policy.
Auditing the Company's revenue from Creative Subscriptions and certain services included in the Business Solutions revenue was challenging and complex due to highly automated nature of capturing, aggregating, and recording the revenue, which relies on several information systems and tools (both internally and externally developed) and involves transferring significant volumes of data across these systems and tools.
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How We Addressed the Matter in Our Audit |
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We obtained understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s revenue process. For example, with the assistance of information technology (IT) professionals, we identified the relevant systems and tools used to capture, aggregate, and record the related revenue transactions, tested the applicable user access controls, change management controls, and IT operations controls over each of these systems and tools, and tested system interfaces and automated controls. We also tested the effectiveness of certain business process controls in place to reconcile data between various systems and to calculate revenue.
We also performed substantive audit procedures that included, among others, testing the completeness and accuracy of the underlying data within the Company’s billing system (performing data analysis by extracting data from the system to evaluate the completeness and accuracy of recorded revenue and deferred revenue amounts and testing a sample of cash to billing reconciliations).
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Kost Forer Gabbay & Kasierer
144 Menachem Begin Road,
Tel-Aviv 6492102, Israel
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Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com |
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Contingent consideration |
Description of the Matter |
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As described in Note 3 to the consolidated financial statements, the Company completed the acquisition of 100% of the equity shares of Base44 Inc. ("Base44") in June 2025 for total consideration of approximately $92 million, which included contingent consideration liability. The Company accounted for the acquisition as a business combination. The Company has determined the fair value of contingent consideration liability to be $74 million as of the acquisition date and $89.5 million as of December 31, 2025, using a Monte Carlo simulation model based on certain assumptions including projected revenue-related metrics and revenue volatility rate over the applicable period.
Auditing the Company’s accounting for contingent consideration liability was complex due to estimation uncertainty in the Company’s determination of the fair value of the contingent consideration. A high degree of subjective auditor judgment was required to evaluate the projected revenue-related metrics and revenue volatility rate used in the Monte Carlo simulation model. Changes in these assumptions could have a significant impact on the fair value of the contingent consideration liability.
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How We Addressed the Matter in Our Audit |
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We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s process and controls to estimate fair value of the contingent consideration liability. We also tested controls regarding management’s review of assumptions used in the valuation model.
To test the estimated fair value of the contingent consideration liability, we performed audit procedures that included, among others, evaluating the terms of the arrangement and testing the significant assumptions used by the Company in its valuation analysis. We also involved our valuation specialist to assist with our evaluation of the methodology used by the Company and significant assumptions included in the fair value estimates. Our valuation specialists’ procedures included, among others, developing independent estimates for the revenue volatility rate used in the valuation model and comparing those to the rates selected by management, and performing sensitivity analysis to evaluate the changes in the fair value of this contingent consideration liability that would result from changes in the significant assumptions.
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We have served as the Company’s auditor since 2007.
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/s/ Kost Forer Gabbay &Kasierer |
Tel-Aviv, Israel |
A Member of EY Global |
March 5, 2026 |
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Kost Forer Gabbay & Kasierer
144 Menachem Begin Road,
Tel-Aviv 6492102, Israel
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Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com |
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of WIX.COM LTD.
Opinion on Internal Control Over Financial Reporting
We have audited Wix.com Ltd. and its subsidiaries' internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Wix.com Ltd. and its subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
As indicated in the accompanying Management's annual report on internal control over financial reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Base44 which is included in the 2025 consolidated financial statements of the Company and constituted less than 1% of total assets, after excluding goodwill and intangible assets acquired, as of December 31, 2025, and less than 1% of revenues, for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Base44.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, changes in shareholders’ equity (deficiency) and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated March 5, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's annual report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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/s/ Kost Forer Gabbay &Kasierer |
Tel-Aviv, Israel |
A Member of EY Global |
March 5, 2026 |
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WIX.COM LTD. AND ITS SUBSIDIARIES |
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| CONSOLIDATED BALANCE SHEETS |
| U.S. dollars in thousands |
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December 31, |
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2025 |
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2024 |
| ASSETS |
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| CURRENT ASSETS: |
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| Cash and cash equivalents |
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$ |
311,356 |
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$ |
660,939 |
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| Restricted cash |
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5,520 |
|
|
— |
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| Short-term deposits |
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385,280 |
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|
106,844 |
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| Restricted deposits |
|
222 |
|
|
773 |
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| Marketable securities |
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483,859 |
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338,593 |
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| Trade receivables |
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41,525 |
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44,674 |
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| Prepaid expenses and other current assets |
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96,252 |
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128,577 |
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| Total current assets |
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1,324,014 |
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1,280,400 |
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| LONG-TERM ASSETS: |
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| Prepaid expenses and other long-term assets |
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33,847 |
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27,021 |
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| Property and equipment, net |
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114,419 |
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128,155 |
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| Equity method investment |
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4,851 |
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— |
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| Marketable securities |
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474,198 |
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6,135 |
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| Deferred tax assets |
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94,549 |
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— |
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| Intangible assets, net |
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31,810 |
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22,141 |
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| Goodwill |
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135,021 |
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49,329 |
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| Operating lease right-of-use assets |
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398,265 |
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399,861 |
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| Total long-term assets |
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1,286,960 |
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632,642 |
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| TOTAL ASSETS |
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$ |
2,610,974 |
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$ |
1,913,042 |
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The accompanying notes are an integral part of the consolidated financial statements.
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WIX.COM LTD. AND ITS SUBSIDIARIES |
|
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| CONSOLIDATED BALANCE SHEETS |
| U.S. dollars in thousands (except share and per share data) |
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December 31, |
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2025 |
|
2024 |
| LIABILITIES AND SHAREHOLDERS' DEFICIENCY |
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| CURRENT LIABILITIES: |
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| Trade payables |
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$ |
74,811 |
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$ |
47,077 |
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| Employees and payroll accruals |
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110,526 |
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143,131 |
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| Deferred revenues |
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737,346 |
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661,171 |
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| Current portion of convertible notes, net |
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— |
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572,880 |
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| Accrued expenses and other current liabilities |
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146,716 |
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63,246 |
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| Operating lease liabilities |
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43,262 |
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27,907 |
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|
|
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| Total current liabilities |
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1,112,661 |
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1,515,412 |
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|
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| LONG-TERM LIABILITIES: |
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|
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| Convertible notes, net |
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1,125,769 |
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|
— |
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| Deferred revenues |
|
116,991 |
|
|
89,271 |
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| Deferred tax liabilities |
|
3,923 |
|
|
1,965 |
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| Other long-term liabilities |
|
200,054 |
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|
16,021 |
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| Operating lease liabilities |
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417,578 |
|
|
369,159 |
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|
|
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|
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| Total long-term liabilities |
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1,864,315 |
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|
476,416 |
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|
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|
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| Total liabilities |
|
2,976,976 |
|
|
1,991,828 |
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|
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| Commitments and contingencies |
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— |
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— |
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|
|
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|
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| SHAREHOLDERS' DEFICIENCY: |
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Ordinary shares of NIS 0.01 par value - Authorized: 500,000,000 shares at December 31, 2025 and 2024; Issued 67,143,958 and 64,718,465 shares at December 31, 2025 and 2024, respectively; Outstanding: 54,989,523 and 56,107,932 shares at December 31, 2025 and 2024, respectively |
|
104 |
|
|
107 |
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| Additional paid-in capital |
|
2,067,407 |
|
|
1,840,574 |
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Treasury shares at cost, 12,154,435 ordinary shares as of December 31, 2025 and 8,610,533 as of December 31, 2024 |
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(1,600,156) |
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(1,025,167) |
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| Accumulated other comprehensive income |
|
17,539 |
|
|
7,242 |
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| Accumulated deficit |
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(850,896) |
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(901,542) |
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|
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|
|
| Total shareholders' deficiency |
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(366,002) |
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|
(78,786) |
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|
|
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|
|
| TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY |
|
$ |
2,610,974 |
|
|
$ |
1,913,042 |
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The accompanying notes are an integral part of the consolidated financial statements.
|
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WIX.COM LTD. AND ITS SUBSIDIARIES |
|
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
| U.S. dollars in thousands (except per share data) |
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Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
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|
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| Revenues |
|
|
|
|
|
|
| Creative Subscriptions |
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$ |
1,409,727 |
|
|
$ |
1,264,975 |
|
|
$ |
1,152,007 |
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| Business Solutions |
|
583,317 |
|
|
495,675 |
|
|
409,658 |
|
|
|
1,993,044 |
|
|
1,760,650 |
|
|
1,561,665 |
|
| Cost of Revenues |
|
|
|
|
|
|
| Creative Subscriptions |
|
237,288 |
|
|
213,422 |
|
|
215,515 |
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| Business Solutions |
|
399,065 |
|
|
351,213 |
|
|
297,013 |
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|
|
636,353 |
|
|
564,635 |
|
|
512,528 |
|
| Gross profit |
|
1,356,691 |
|
|
1,196,015 |
|
|
1,049,137 |
|
|
|
|
|
|
|
|
| Research and development, net |
|
645,501 |
|
|
495,281 |
|
|
481,293 |
|
| Selling and marketing |
|
514,280 |
|
|
425,457 |
|
|
399,577 |
|
| General and administrative |
|
195,158 |
|
|
175,136 |
|
|
160,033 |
|
| Impairment, restructuring and other costs |
|
— |
|
|
— |
|
|
32,614 |
|
|
|
|
|
|
|
|
| Total operating expenses |
|
1,354,939 |
|
|
1,095,874 |
|
|
1,073,517 |
|
|
|
|
|
|
|
|
| Operating income (loss) |
|
1,752 |
|
|
100,141 |
|
|
(24,380) |
|
| Financial income (expenses), net |
|
(5,015) |
|
|
51,820 |
|
|
62,474 |
|
| Other income (expenses) |
|
4,352 |
|
|
(36) |
|
|
(255) |
|
|
|
|
|
|
|
|
| Income before taxes on income |
|
1,089 |
|
|
151,925 |
|
|
37,839 |
|
| Income tax benefit (expense) |
|
51,047 |
|
|
(13,603) |
|
|
(4,702) |
|
| Loss from equity method investment |
|
(1,490) |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
| Net income |
|
$ |
50,646 |
|
$ |
138,322 |
|
$ |
33,137 |
|
|
|
|
|
|
|
| Other comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unrealized gain from marketable securities, net |
|
290 |
|
|
2,770 |
|
|
8,593 |
|
| Unrealized gain on cash flow hedge, net |
|
10,007 |
|
|
280 |
|
|
29,054 |
|
|
|
|
|
|
|
|
| Other comprehensive income for the year, net |
|
10,297 |
|
|
3,050 |
|
|
37,647 |
|
|
|
|
|
|
|
|
| Total comprehensive income |
|
$ |
60,943 |
|
$ |
141,372 |
|
$ |
70,784 |
|
|
|
|
|
|
|
|
| Basic net income per ordinary share |
|
$ |
0.91 |
|
|
$ |
2.49 |
|
|
$ |
0.58 |
|
|
|
|
|
|
|
|
| Diluted net income per ordinary share |
|
$ |
0.88 |
|
|
$ |
2.36 |
|
|
$ |
0.57 |
|
The accompanying notes are an integral part of the consolidated financial statements.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY) |
| U.S. dollars in thousands (except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary Shares Outstanding |
|
Additional Paid-in |
|
Treasury |
|
Other Comprehensive |
|
Accumulated |
|
Total Shareholders' |
|
|
Shares |
|
Amount |
|
Capital |
|
Shares |
|
Income (Loss), net |
|
Deficit |
|
Deficiency |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of December 31, 2022 |
|
56,305,462 |
|
|
$ |
108 |
|
$ |
1,274,968 |
|
$ |
(431,862) |
|
$ |
(33,455) |
|
$ |
(1,073,001) |
|
$ |
(263,242) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exercise of options, ESPP shares and vesting of RSUs |
|
2,215,998 |
|
|
6 |
|
|
39,654 |
|
|
— |
|
|
— |
|
|
— |
|
|
39,660 |
|
| Share-based compensation |
|
— |
|
|
— |
|
|
225,330 |
|
|
— |
|
|
— |
|
|
— |
|
|
225,330 |
|
| Purchase of treasury shares |
|
(1,348,865) |
|
|
(4) |
|
|
— |
|
|
(127,013) |
|
|
— |
|
|
— |
|
|
(127,017) |
|
| Other comprehensive income, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
37,647 |
|
|
— |
|
|
37,647 |
|
| Net income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
33,137 |
|
|
33,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of December 31, 2023 |
|
57,172,595 |
|
|
$ |
110 |
|
$ |
1,539,952 |
|
$ |
(558,875) |
|
$ |
4,192 |
|
$ |
(1,039,864) |
|
$ |
(54,485) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exercise of options, ESPP shares and vesting of RSUs |
|
2,529,058 |
|
|
7 |
|
|
59,569 |
|
|
— |
|
|
— |
|
|
— |
|
|
59,576 |
|
| Share-based compensation |
|
— |
|
|
— |
|
|
241,053 |
|
|
— |
|
|
— |
|
|
— |
|
|
241,053 |
|
| Purchase of treasury shares |
|
(3,593,721) |
|
|
(10) |
|
|
— |
|
|
(466,292) |
|
|
— |
|
|
— |
|
|
(466,302) |
|
| Other comprehensive income, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3,050 |
|
|
— |
|
|
3,050 |
|
| Net income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
138,322 |
|
|
138,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of December 31, 2024 |
|
56,107,932 |
|
|
$ |
107 |
|
$ |
1,840,574 |
|
$ |
(1,025,167) |
|
$ |
7,242 |
|
$ |
(901,542) |
|
$ |
(78,786) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Exercise of options, ESPP shares and vesting of RSUs |
|
2,425,493 |
|
7 |
|
54,811 |
|
— |
|
— |
|
— |
|
54,818 |
| Share-based compensation |
|
— |
|
— |
|
238,377 |
|
— |
|
— |
|
— |
|
238,377 |
| Purchase of treasury shares |
|
(3,543,902) |
|
(10) |
|
— |
|
(574,989) |
|
— |
|
— |
|
(574,999) |
| Benefit from release of valuation allowance |
|
— |
|
— |
|
5,520 |
|
— |
|
— |
|
— |
|
5,520 |
| Other comprehensive income, net |
|
— |
|
— |
|
— |
|
— |
|
10,297 |
|
— |
|
10,297 |
| Purchase of 2030 Capped Calls |
|
— |
|
— |
|
(71,875) |
|
— |
|
— |
|
— |
|
(71,875) |
| Net income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
50,646 |
|
50,646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of December 31, 2025 |
|
54,989,523 |
|
|
$ |
104 |
|
$ |
2,067,407 |
|
$ |
(1,600,156) |
|
$ |
17,539 |
|
$ |
(850,896) |
|
$ |
(366,002) |
The accompanying notes are an integral part of the consolidated financial statements.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| U.S. dollars in thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
50,646 |
|
$ |
138,322 |
|
$ |
33,137 |
| Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
| Depreciation |
|
24,491 |
|
25,246 |
|
20,492 |
| Amortization |
|
6,962 |
|
5,869 |
|
5,954 |
| Share based compensation expenses |
|
237,376 |
|
240,721 |
|
224,625 |
| Amortization of debt issuance costs |
|
3,831 |
|
3,166 |
|
4,194 |
| Changes in accrued interest and exchange rate on short-term and long-term deposits |
|
(308) |
|
852 |
|
(2,415) |
| Non-cash impairment, restructuring and other costs |
|
— |
|
— |
|
26,699 |
| Amortization of premium and discount, accrued interest, and other gains (losses) on marketable debt securities, net |
|
(41,243) |
|
(13,381) |
|
8,346 |
| Loss from equity method investment |
|
1,490 |
|
— |
|
— |
| Remeasurement gain on marketable equity securities and investments in privately held companies |
|
(110) |
|
(2,536) |
|
(30,608) |
| Changes in deferred income taxes, net |
|
(91,742) |
|
(5,196) |
|
(8,784) |
| Changes in operating lease right-of-use assets |
|
19,921 |
|
24,246 |
|
27,231 |
| Changes in operating lease liabilities |
|
45,449 |
|
(33,086) |
|
(31,333) |
| Loss (gain) on foreign exchange, net |
|
(18,225) |
|
3,906 |
|
— |
| Decrease (increase) in trade receivables |
|
3,219 |
|
12,720 |
|
(15,308) |
| Decrease (increase) in prepaid expenses and other current and long-term assets |
|
39,004 |
|
(79,484) |
|
(20,105) |
| Increase (decrease) in trade payables |
|
26,962 |
|
11,967 |
|
(52,455) |
| Increase (decrease) in employees and payroll accruals |
|
(32,955) |
|
86,550 |
|
(29,532) |
| Increase in short-term and long-term deferred revenues |
|
103,874 |
|
74,450 |
|
76,193 |
| Increase in accrued expenses and other liabilities |
|
204,216 |
|
3,083 |
|
11,915 |
|
|
|
|
|
|
|
| Net cash provided by operating activities |
|
582,858 |
|
497,415 |
|
248,246 |
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from short-term and restricted deposits |
|
188,475 |
|
|
276,697 |
|
|
625,495 |
|
| Investment in short-term and restricted deposits |
|
(467,837) |
|
|
(170,332) |
|
|
(297,917) |
|
| Investment in trading marketable debt securities |
|
(278,038) |
|
|
(267,209) |
|
|
— |
|
| Proceeds from trading marketable debt securities |
|
277,249 |
|
|
— |
|
|
— |
|
| Investment in available-for-sale marketable debt securities |
|
(639,888) |
|
|
— |
|
|
(6,732) |
|
| Proceeds from available-for-sale marketable debt securities |
|
68,921 |
|
|
125,176 |
|
|
250,960 |
|
| Purchase of property and equipment and lease prepayment |
|
(8,553) |
|
|
(17,813) |
|
|
(63,021) |
|
| Internal-use of software |
|
(1,348) |
|
|
(1,523) |
|
|
(3,028) |
|
| Proceeds from sale of marketable equity securities |
|
— |
|
|
22,148 |
|
|
68,671 |
|
| Investments in privately held companies |
|
(7,208) |
|
|
(3,160) |
|
|
(7,603) |
|
| Payments for businesses acquired, net of acquired cash |
|
(23,880) |
|
— |
|
— |
| Proceeds from investments in privately-held companies |
|
417 |
|
— |
|
— |
| Investment in other long-term assets |
|
(10,458) |
|
— |
|
— |
| Proceeds from (investment in) other assets |
|
— |
|
550 |
|
(111) |
|
|
|
|
|
|
|
| Net cash provided by (used in) investing activities |
|
(902,148) |
|
(35,466) |
|
566,714 |
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| U.S. dollars in thousands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Repayment of convertible notes |
|
(575,000) |
|
|
— |
|
|
(362,667) |
|
| Purchase of treasury shares |
|
(574,999) |
|
|
(466,302) |
|
|
(127,017) |
|
| Proceeds from issuance of convertible senior notes |
|
1,150,000 |
|
|
— |
|
|
— |
|
| Payments of debt issuance costs |
|
(25,942) |
|
— |
|
— |
| Purchase of 2030 Capped Calls |
|
(71,875) |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from exercise of options and ESPP shares |
|
54,818 |
|
59,576 |
|
39,660 |
|
|
|
|
|
|
|
| Net cash used in financing activities |
|
(42,998) |
|
(406,726) |
|
(450,024) |
|
|
|
|
|
|
|
| EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
18,225 |
|
|
(3,906) |
|
|
— |
|
|
|
|
|
|
|
|
| Increase (decrease) in cash, cash equivalents and restricted cash |
|
(344,063) |
|
|
51,317 |
|
|
364,936 |
|
|
|
|
|
|
|
|
| Cash, cash equivalents and restricted cash at the beginning of the year |
|
660,939 |
|
609,622 |
|
244,686 |
|
|
|
|
|
|
|
| Cash, cash equivalents and restricted cash at the end of the year |
|
$ |
316,876 |
|
|
$ |
660,939 |
|
|
$ |
609,622 |
|
|
|
|
|
|
|
|
| Supplemental disclosure of cash flow activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash paid during the year for taxes |
|
$ |
3,555 |
|
|
$ |
11,326 |
|
|
$ |
12,410 |
|
|
|
|
|
|
|
|
| Interest received during the year |
|
$ |
43,142 |
|
|
$ |
36,346 |
|
|
$ |
47,696 |
|
|
|
|
|
|
|
|
| Supplemental information for non-cash transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Right-of-use assets obtained in exchange for operating lease liabilities |
|
$ |
18,325 |
|
|
$ |
3,545 |
|
|
$ |
255,690 |
|
|
|
|
|
|
|
|
| Non-cash purchase of property and equipment |
|
$ |
1,084 |
|
|
$ |
562 |
|
|
$ |
3,750 |
|
|
|
|
|
|
|
|
| Reconciliation of cash, cash equivalents, and restricted cash, end of the year: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
311,356 |
|
|
$ |
660,939 |
|
|
$ |
609,622 |
|
| Restricted cash |
|
5,520 |
|
— |
|
— |
|
|
|
|
|
|
|
| Total cash, cash equivalents, and restricted cash, end of the year |
|
$ |
316,876 |
|
|
$ |
660,939 |
|
|
$ |
609,622 |
|
The accompanying notes are an integral part of the consolidated financial statements.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 1:- GENERAL
Wix.com Ltd., an Israeli corporation (incorporated in October 2006), and its subsidiaries (collectively, the “Company” or “Wix”), was founded on the belief that the Internet should be accessible to everyone to develop, create and contribute. Wix is a leading, global, web development platform for millions of creators, delivering its solutions through a Software-as-a-Service (SaaS) model. Since its founding, Wix has developed and launched multiple innovative products, services, and business solutions that empower any business, organization or brand worldwide to create, manage and grow a fully integrated and dynamic digital presence.
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP").
a.Use of estimates:
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates that require management’s subjective judgments include, but are not limited to, those related to revenue recognition, income taxes, share-based compensation, lease accounting, and purchase price allocation on acquisitions, including the determination of useful lives and contingent consideration. The Company evaluates its estimates and judgments on an ongoing basis and revises them when necessary. Actual results may differ from the original or revised estimates.
b.Principles of consolidation:
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation.
c.Foreign currency translation and transactions:
A substantial portion of the Company's financing activities, including equity transactions, cash investments, costs and revenues are generated in U.S. dollars. The Company's management believes that the U.S. dollar is the currency of the primary economic environment in which the Company and each of its subsidiaries operate. Thus, the functional and reporting currency of the Company is the U.S. dollar. Transactions and balances that are denominated in currencies other than the U.S. dollar are remeasured into U.S. dollars in accordance with the principles set forth in Accounting Standard Codification ("ASC") Topic 830, Foreign Currency Matters (“ASC 830").
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
In accordance with ASC 830, monetary assets and liabilities denominated in foreign currencies are remeasured into U.S. dollars at the end of each reporting period using the exchange rates in effect at the balance sheet date. Non-monetary assets denominated in foreign currencies are measured using historical exchange rates. Gains and losses resulting from remeasurement are generally recorded in the statement of comprehensive income as financial income or expenses, as appropriate.
d.Cash and cash equivalents:
Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less at the date of purchase. Cash equivalents generally consist of investments in money market funds and are carried at fair value.
e.Restricted cash:
Restricted cash represents amounts held in financial institutions that are legally restricted from withdrawal or use.
f.Short-term deposits:
Short-term deposits consist of bank deposits with maturities over three months from the date of purchase and of up to one year. As of December 31, 2025 and 2024, the Company's deposits were mainly denominated in U.S. dollars and New Israeli Shekels (NIS) and bore interest at weighted average interest rates of 5.09% and 5.94%, respectively. Short-term deposits are presented at their cost, including accrued interest.
g.Restricted deposits:
Restricted deposits consist of bank deposits with maturities of up to one year and are used as security for the rental of premises and for the Company's credit cards. As of December 31, 2025 and 2024, the Company's restricted deposits were denominated in U.S. dollars and bore interest at weighted average interest rates of 0.00% and 0.22%, respectively. Restricted deposits are presented at their cost, including accrued interest.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
h.Marketable securities:
Marketable securities consist of investments in debt securities and equity securities with readily determinable fair values. The Company accounts for investments in marketable debt securities in accordance with ASC Topic 320, Investments - Debt Securities (“ASC 320”). The Company’s marketable debt securities consist of U.S. treasury bonds, sovereign bonds, municipal bonds and corporate bonds. Marketable debt securities are classified as available-for-sale (AFS) or trading at the time of purchase.
Available-for-sale debt securities are carried at fair value based on quoted market prices, with the unrealized gains and non-credit related losses reported in accumulated other comprehensive income in shareholders’ equity (deficiency). Realized gains and losses on sale of investments are included in financial income (expenses), net and are derived using the specific identification method for determining the cost of securities sold.
The amortized cost of available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion, together with interest on securities, are included in financial income (expenses), net.
The Company periodically evaluates its available-for-sale debt securities for credit losses. For securities in an unrealized loss position that the Company intends to hold and will not more likely than not be required to sell before recovery, the Company further evaluates whether declines in fair value below amortized cost are due to credit or non-credit related factors. This evaluation considers factors such as the magnitude of the fair value decline relative to amortized cost, failure of the issuer to meet its payment obligations, credit ratings, and the overall risk profile of the securities. The Company does not intend to sell these securities and it is more likely than not that the Company will hold these securities until maturity or a recovery of the cost basis. Any credit-related impairments are recognized as an allowance on the consolidated balance sheets with a corresponding loss in financial income (expense), net in the consolidated statements of comprehensive income. During the years ended December 31, 2025, 2024 and 2023, credit loss impairments were immaterial.
The Company classifies certain investments in marketable debt securities denominated in foreign currency as trading securities. These investments are carried at fair value at each balance sheet date and any changes in the fair values are recognized in earnings, within financial income (expenses), net, in the consolidated statements of comprehensive income.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date as well as the intended time of realization. Marketable debt securities with maturities of 12 months or less are classified as short-term, and marketable debt securities with maturities greater than 12 months are classified as long-term.
The Company accounts for investments in marketable equity securities with readily determinable fair values in accordance with ASC Topic 321, Investments - Equity Securities (“ASC 321”). These investments are measured at fair value with the related gains and losses, including unrealized, recognized in financial income (expenses), net.
i.Property and equipment, net:
Property and equipment assets are stated at cost, net of accumulated depreciation and impairment. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets at the following annual rates:
|
|
|
|
|
|
|
|
|
|
|
% |
|
|
|
| Computers, peripheral equipment and electronic equipment |
|
15 - 33 (mainly 33) |
| Internal use software |
|
33 |
| Office furniture and equipment |
|
6 - 14 (mainly 6) |
| Vehicles |
|
15 |
| Leasehold improvements |
|
Over the shorter of the related lease period or the life of the asset |
The carrying amounts of property and equipment are reviewed for impairment in accordance with ASC Topic 360, Property, Plant and Equipment ("ASC 360"), whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The determination of whether any impairment exists includes a comparison of estimated undiscounted future cash flows anticipated to be generated over the remaining life of an asset or asset group to their net carrying amount. If such assets are considered to be impaired, the impairment loss to be recognized is measured by the amount by which the carrying amount of the asset or asset group exceeds the fair value of the asset or asset group. During the year ended December 31, 2023, the Company recorded an impairment charge for certain leasehold improvements. See Note 18 for further information. No material impairments were recognized in the other periods presented.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
j.Business combinations:
The Company accounts for business combinations in accordance with ASC Topic 805, Business Combinations (“ASC 805”). ASC 805 requires the Company to recognize the assets acquired, liabilities assumed, and any non-controlling interests as of the acquisition date at their respective fair values. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. If applicable, a contingent consideration liability is recognized at fair value as of the acquisition date and included in the purchase price. A contingent consideration liability is remeasured to fair value each reporting period, with changes recognized in the statement of comprehensive income within general and administrative expenses. During the measurement period, which may extend up to one year from the acquisition date, the Company may record adjustments to the provisional fair values of the assets acquired and liabilities assumed, with a corresponding offset to goodwill. Upon the earlier of the end of the measurement period or the final determination of the fair values of the assets acquired and liabilities assumed, any subsequent adjustments are recorded in the statement of comprehensive income. Acquisition-related costs are recognized separately from the business combination and are expensed as incurred. The Company accounts for acquisitions that do not meet the definition of a business as asset acquisitions.
k.Goodwill and intangible assets:
Goodwill and certain other purchased intangible assets have been recorded in the Company's financial statements as a result of acquisitions.
Goodwill represents the excess of the purchase price over the estimated fair value of net assets of a business acquired in a business combination. Under ASC Topic 350, Intangibles - Goodwill and Other ("ASC 350"), goodwill is not amortized, but rather is subject to impairment test at least annually. The Company elected to perform an annual impairment test of goodwill as of October 1 of each year, or more frequently if events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is tested for impairment at the reporting unit level, by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the reporting unit does not pass the qualitative assessment, the Company carries out a quantitative test for impairment of goodwill, by comparing the fair value of the reporting unit with the carrying amount of the reporting unit that includes goodwill. The Company may bypass the qualitative assessment and proceed directly to performing the quantitative goodwill impairment test. The Company operates as a single operating segment. As of December 31, 2025, the Company has two reporting units within this operating segment; prior to 2025, the Company had a single reporting unit. The Company did not record goodwill impairment charges during any of the periods presented.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Intangible assets are stated at cost, less accumulated amortization and impairment. Amortization is calculated using the straight-line method over the estimated useful lives of the related assets as follows:
|
|
|
|
|
|
|
|
|
| Technology |
|
4-8 years |
Trade Name |
|
4 years |
| Customer relations |
|
4 -15 years |
| Customer data |
|
15 years |
| Non-Competition agreement |
|
3 years |
| Domain |
|
7 years |
Amortization is recorded into cost of revenues or operating expenses, depending on the nature of the asset. The carrying amounts of these assets are reviewed for impairment in accordance with ASC 360 whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of these assets is measured by comparison of estimated undiscounted future cash flows anticipated to be generated over the remaining life of an asset or asset group to their net carrying amount. If the estimated undiscounted future cash flows associated with the asset or asset group are less than the carrying amount, an impairment loss will be recorded based on the estimated fair value. There were no impairment charges during any of the periods presented.
l.Investments in privately held companies:
The Company holds equity investments in private companies without readily determinable market values, in which it does not have control or significant influence. The Company accounts for these equity investments under ASC 321, using the measurement alternative, which is cost, less any impairment, adjusted for changes in fair value resulting from observable transactions for identical or similar investments of the same issuer. The investments are reviewed periodically to determine if their respective values have appreciated or have been impaired, and adjustments are recorded as necessary on a non-recurring basis. The investments are presented in the Company’s consolidated balance sheets as part of prepaid expenses and other long-term assets.
The carrying amounts of the Company’s equity investments in privately held companies without readily determinable market values as of December 31, 2025 and 2024 were $28,090 and $23,639, respectively.
During the years ended December 31, 2025, 2024, and 2023, the Company recognized unrealized gains of $180, $0, and $4,156, respectively, resulting from the revaluation of certain equity investments based on observable price changes. Impairments and unrealized losses recognized during the years ended December 31, 2025, 2024, and 2023 were $70, $831, and $400, respectively.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Cumulative unrealized gains on equity investments without readily determinable market values as of December 31, 2025 and 2024 were $8,456 and $8,276, respectively. Cumulative impairments and unrealized losses as of December 31, 2025 and 2024 were $4,301 and $4,231, respectively.
m.Equity method investments:
The Company applies the equity method of accounting to investments when it has significant influence, but not controlling interest, in the investee. The Company’s equity method investments are reported at cost and adjusted each period for its proportionate share of the investee’s income or loss. The cost of initial recognition of retained equity interest in a deconsolidated business is based on fair value. The Company’s proportionate share of the net loss resulting from the investment is reported under loss from equity method investment, net of tax in the consolidated statements of comprehensive income. The carrying value of the Company’s equity method investments is reported in equity method investment in the consolidated balance sheets. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. No impairment losses were recognized during the periods presented.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
n.Derivative instruments:
The Company enters into derivative transactions primarily to hedge foreign exchange risks, using foreign currency derivatives, mainly forward and option contracts.
In accordance with ASC Topic 815, Derivatives and Hedging ("ASC 815"), the Company recognizes all derivative instruments as either assets or liabilities at their respective fair values. Derivative instruments are recorded as either prepaid expenses and other current assets or accrued expenses and other current liabilities in the consolidated balance sheets. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative.
Derivative instruments designated as hedging instruments:
The Company has instituted a foreign currency cash flow hedging program to mitigate the impact of exchange rate fluctuations on forecasted salary payments, primarily those denominated in NIS. These exposures are primarily hedged using forward and option contracts designated as cash flow hedging instruments, as defined by ASC 815. For these derivative instruments, gains and losses are reported as a component of other comprehensive income and subsequently recognized in earnings with the corresponding hedged item. Cash flows related to these derivatives are classified in the consolidated statements of cash flows in the same manner as the underlying hedged transaction, typically within cash flows from operating activities.
The fair value of derivative assets designated as hedging instruments as of December 31, 2025 and 2024 totaled $21,123 and $9,088, respectively. The fair value of derivative liabilities designated as hedging instruments as of December 31, 2025 and 2024 totaled $0 in both periods.
As of December 31, 2025 and 2024, the net unrealized gains (losses) related to foreign currency contracts designated as hedging instruments, that were accumulated in other comprehensive income, were $21,123 and $9,035, respectively. These amounts are expected to be reclassified into earnings over the next 12 months.
As of December 31, 2025 and 2024, the notional amounts of foreign exchange forward and options contracts into which the Company entered were $117,563 and $334,738, respectively. These contracts will expire over the next 12 months.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Derivative instruments not designated as hedging instruments:
The Company also uses derivative instruments not designated as hedging instruments, primarily to economically hedge foreign exchange risk related to certain revenue transactions denominated in Euros, British pounds, Japanese Yen, and NIS. These exposures are mainly hedged through forward and option contracts. Gains and losses related to such derivative instruments are recorded in financial income (expenses), net. Cash flows associated with these derivatives are typically reflected as cash flows from operating activities in the consolidated statements of cash flows.
The fair value of derivative assets not designated as hedging instruments as of December 31, 2025 and 2024 totaled $1,005 and $4,056, respectively. The fair value of derivative liabilities not designated as hedging instruments as of December 31, 2025 and 2024 totaled $11,222 and $2, respectively.
During the years ended December 31, 2025, 2024 and 2023, the Company recorded financial income (expenses), net, from derivatives not designated as hedging instruments, in the amount of $(43,075), $6,490 and $(6,998), respectively.
As of December 31, 2025 and 2024 the notional amounts of foreign currency derivative contracts not designated as hedging instruments were $363,587 and $185,563, respectively. These contracts will expire over the next 9 months.
o.Severance pay:
The Israeli Severance Pay Law, 1963 ("Severance Pay Law"), specifies that employees are entitled to severance payment, following the termination of their employment. Under the Severance Pay Law, the severance payment is calculated as one month salary for each year of employment, or a portion thereof.
The majority of the Company's liability for severance pay is covered by the provisions of Section 14 of the Severance Pay Law ("Section 14"). Under Section 14, employees are entitled to monthly deposits, at a rate of 8.33% of their monthly salary, contributed on their behalf to their insurance funds. Payments in accordance with Section 14 release the Company from any future severance payments in respect of those employees. As a result, the Company does not recognize any liability for severance pay due to these employees and the deposits under Section 14 are not recorded as an asset in the Company's consolidated balance sheet.
Severance expense for the years ended December 31, 2025, 2024 and 2023 amounted to $28,196, $24,969 and $22,537, respectively.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
p.U.S. employees defined contribution plan:
The Company’s U.S. subsidiary has a 401(k) defined contribution plan covering certain employees in the U.S. All eligible employees may elect to contribute up to 100%, but generally not greater than $23.5 per year (for certain employees over 50 years of age the maximum contribution is $31.0 per year), of their annual compensation to the plan through salary deferrals, subject to Internal Revenue Service limits.
The U.S. subsidiary matches 4% of employee contributions up to the plan with no limitation. During the years ended December 31, 2025, 2024 and 2023, the U.S. subsidiary recorded expenses for matching contributions in amounts of $1,667, $1,687 and $1,965, respectively.
q.Convertible Senior Notes:
The Convertible Senior Notes (also referred to as “Notes” or “Convertible Notes”) are accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options, and ASC 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity. The Company records the Convertible Notes at amortized cost as a single unit of account on the consolidated balance sheet, since they were not issued at a substantial premium and do not contain bifurcated embedded derivatives. The carrying value of the liability is represented by the face amount of the Convertible Notes, less debt issuance costs, adjusted for any amortization of issuance costs. Issuance costs are being amortized as interest expense over the term of the Convertible Notes, using the effective interest rate method.
Capped call transactions (“Capped Call Transactions” or “Capped Calls”) entered into in connection with the offering of the Convertible Notes are separate transactions and are not part of the terms of the notes. The Capped Calls are considered indexed to the Company’s own stock and are equity-classified. Accordingly, they are recorded within shareholders' equity (deficiency) and are not accounted for as derivatives. The cost incurred in connection with the Capped Calls was recorded as a reduction to additional paid-in capital.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
r.Revenue recognition:
The Company’s total revenues are comprised of revenues from Creative Subscriptions Revenues and Business Solutions Revenues. Creative Subscriptions Revenues are primarily generated from the sale of monthly, yearly and multi-year premium subscriptions for the Company’s website and application solutions, including Wix Studio, as well as from the sale of domain name registrations. Business Solutions Revenues are generated from the sale of additional products and services that are offered to users to help them manage and grow their business online. These products and services include, among others, Wix Payments, Google Workspace, Paid Ad Campaigns, Email Marketing, and other applications sold through the Company’s App Market or elsewhere on its platform.
The Company sells its products and services directly to end customers as well as through certain types of partners, including professional agencies and freelancers who build websites or applications for others, and resellers. This revenue recognition policy is consistent for sales generated directly with end customers and indirect sales generated through partners.
Arrangements with the Company’s customers do not provide the customers with the right to take possession of the software supporting the Company’s platform at any time and are therefore accounted for as service contracts.
In accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company recognizes revenue when a customer obtains control of promised products or services. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these products or services.
Revenue is recognized net of allowances for refunds, consideration payable to customers, and any taxes collected from customers, which are subsequently remitted to governmental authorities.
The Company recognizes revenue by applying the following steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied.
The Company typically invoices its customers in advance upon execution of the initial contract or subsequent renewal, and payments are typically received at the time of invoicing.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
In instances where the timing of revenue recognition differs from the timing of payment, the Company has determined that its contracts do not include a significant financing component. The Company applies the practical expedient in ASC 606 and does not assess the existence of a significant financing component when the difference between payment and revenue recognition is a year or less.
The Company's products and services are generally distinct and accounted for as separate performance obligations. Certain arrangements with customers contain multiple distinct performance obligations. For these arrangements, the Company allocates the transaction price to each performance obligation based on its relative stand-alone selling price (SSP). The Company generally establishes SSPs based on observable selling prices.
Creative Subscriptions Revenues
Revenues from premium subscriptions are recognized on a straight-line basis over the term of the contract, as these services generally have a consistent continuous pattern of transfer to the customer during the contract period.
The Company offers a 14-day money back refund period on new Wix premium subscriptions. The Company considers amounts collected from new premium subscriptions as customer deposits until the end of the 14-day refund period. Revenue recognition commences upon the expiration of the refund period.
Revenues related to the registration of domain names are recognized at a point in time upon the registration of the domain name, since that is when the Company transfers control and satisfies its performance obligation.
Business Solutions Revenues
Revenues related to subscriptions and software applications developed by the Company are primarily recognized over time. Revenues related to Google Workspace subscriptions, which are sold on a monthly or yearly basis, are recognized over the subscription period. These revenues are generally recognized ratably over the term of the contract, as the associated services have a consistent continuous pattern of transfer to the customer over the contract period.
Revenues related to Wix Payments, earned from processing payments, are recognized at the time of the transaction, and fees are determined based in part on a percentage of the Gross Payment Volume (“GPV”) processed plus a per transaction fee, where applicable.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Revenues related to third-party software applications are generally recognized at a point in time upon sale of the application, since that is when the Company completes its performance obligation to facilitate the transfer between the customer and the third party.
Principal versus agent considerations
The Company follows the guidance provided in ASC 606 for determining whether it is a principal (i.e., report revenues on a gross basis) or an agent (i.e., report revenues on a net basis) in arrangements with customers that involve another party that contributes to providing specified products or services to a customer. The Company determines whether the nature of its promise is to provide the specified products or services itself (as a principal) or to arrange for those products or services to be provided by the other party (as an agent), based on whether it controls the specified products or services before they are transferred to the end customer. In making this determination, the Company also evaluates indicators such as which party is primarily responsible for fulfillment and has discretion in determining pricing. This determination is reviewed for each specified product or service promised to the customer and may involve significant judgment. Revenues generated from the sale of domain name registrations and the sale of certain integrated solutions, including Google Workspace and Wix Payments, are typically recorded on a gross basis, meaning the amounts billed to customers are recorded as revenues and expenses incurred are recorded as cost of revenues, since the Company has determined that it controls the specified products or services before they are transferred to the end customer. Revenues generated from the sale of third-party software applications are typically recognized on a net basis, as the Company has determined that it acts as an agent in these arrangements.
Deferred revenues
Contract liabilities consist of deferred revenues and primarily include payments received in advance of the Company’s performance under the contract. Deferred revenues are recognized as revenue when transfer of control to customers has occurred. The balance of deferred revenues, including current and long-term balances, as of December 31, 2025 and 2024 was $854,337 and $750,442, respectively. The change in the deferred revenues balance during the period primarily consisted of increases due to payments received in advance of performance, which were offset by decreases due to revenues recognized in the period. During the year ended December 31, 2025, the Company recognized approximately all of the revenue that was included in the current deferred revenues balance at the beginning of the period.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Trade receivables
The Company records trade receivables when it has unconditional right to consideration. An allowance for credit losses is recognized based on the Company’s evaluation of the collectability of accounts, which considers factors such as the nature and size of the customer, historical collection patterns, and the age of overdue invoices. The allowance for credit losses was not material for the periods presented.
Remaining performance obligations
The Company’s remaining performance obligations represent revenues that have not yet been recognized and include deferred revenues and unbilled amounts that will be recognized as revenues in future periods.
As of December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $878,456. As of December 31, 2025, the Company expects to recognize 83% of its remaining performance obligations as revenues over the next 12 months, and the remainder thereafter.
Disaggregation of revenue
The Company provides disaggregation of revenue based on Creative Subscriptions and Business Solutions classification on the consolidated statements of comprehensive income and based on geographic region (see Note 17). Beginning in 2025, the Company also provides a disaggregation of revenue between Partners and Self-Creators. Partners generally include professional agencies and freelancers who build websites or applications on behalf of others, as well as resellers. Self-Creators consist of users who create websites or applications for their own use. Prior-period comparatives have been presented on a consistent basis. The Company believes these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
The following table presents total revenues by customer category for the years ended December 31, 2025, 2024 and 2023:
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Partners |
|
$ |
750,275 |
|
|
$ |
610,069 |
|
|
$ |
468,521 |
|
| Self-Creators |
|
1,242,769 |
|
|
1,150,581 |
|
|
1,093,144 |
|
|
|
|
|
|
|
|
|
|
$ |
1,993,044 |
|
|
$ |
1,760,650 |
|
|
$ |
1,561,665 |
|
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
s.Cost of revenues:
Cost of Creative Subscriptions Revenues consists primarily of the allocation of costs associated with the provision of website creation and services, namely, bandwidth and hosting costs, and related Customer Care and call center costs along with domain name registration costs. Cost of Creative Subscriptions Revenues also consists of personnel and the related overhead costs, including share-based compensation.
Cost of Business Solutions Revenues consists primarily of the allocation of bandwidth, hosting and support costs, and certain revenue share payments according to the Company’s agreements with certain third-party providers. It also includes costs related to payment processing, such as credit card interchange, network fees (charged by credit card providers), and third-party processing fees.
t.Research and development costs:
Research and development costs are generally expensed as incurred. Research and development expenses primarily consist of personnel and related expenses, including share-based compensation and allocated overhead costs.
u.Internal use software costs:
The Company capitalizes certain software development costs incurred in connection with its online platform and internal-use projects during the application development stage. These costs primarily consist of employee-related expenses such as salaries and stock-based compensation. Costs incurred in the preliminary stages of development are expensed as incurred. Capitalization begins when the preliminary project stage is completed, and it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred.
Capitalized software development costs are included in property and equipment, net in the consolidated balance sheets, and are amortized over the estimated useful life of the software, on a straight-line basis.
During 2025, 2024 and 2023, the Company capitalized $1,618, $1,855 and $3,395, respectively.
|
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|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
v.Selling and marketing:
Selling and marketing expenses primarily consist of cost-per click expenses, social networking expenses, marketing campaigns and display advertisements, personnel and related expenses, including share-based compensation and allocated overhead costs and are charged to the statement of comprehensive income, as incurred. Advertising expenses for the years ended December 31, 2025, 2024 and 2023 amounted to $243,650, $175,595 and $142,775, respectively.
w.Share-based compensation:
The Company has granted restricted share units (“RSUs”) and share options vesting solely upon continued service, as well as performance-based awards, including performance share units (“PSUs”), with vesting based on achievement of specified performance targets. In addition, the Company has granted share purchase rights under its Employee Stock Purchase Plan (“ESPP”), which is primarily available to active employees. The Company accounts for share-based compensation in accordance with ASC Topic 718, Compensation - Stock Compensation ("ASC 718"). Compensation cost for share-based awards is measured at the fair value on the grant date and recognized as expense using the straight-line method for service-based awards, and the accelerated method for performance-based awards, over the requisite service period. The Company estimates forfeitures at the grant date based on past experience, and revises its estimate if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company regularly estimates if and when performance-based awards will be earned and record expense over the estimated service period only for awards considered probable of being earned. Any previously recognized expense is reversed in the period in which an award is determined to no longer be probable of being earned.
The Company selected the Black-Scholes-Merton option-pricing model as the most appropriate model for determining the fair value for its share option awards and ESPP. The fair value of RSUs and PSUs is based on the closing market value of the underlying shares at the date of grant. The option-pricing model requires the Company to make several assumptions, including the Company’s share price, expected volatility, expected term, risk-free interest rate, and expected dividends.
Expected volatility was calculated based upon actual historical share price movements over the most recent periods ending on the grant date, equal to the expected term of the options. The expected term of options granted is based upon historical experience and represents the period of time between when the options are granted and when they are expected to be exercised. The risk-free interest rate is based on the yield from U.S. treasury bonds with an equivalent term to the expected term of the options.
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WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The Company has historically not paid dividends and has no near-term plans to pay dividends and, therefore, uses an expected dividend yield of zero in the option-pricing model.
x.Income taxes:
The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”), using the liability method, whereby deferred tax assets and liabilities account balances are determined based on the differences between financial reporting and the tax basis for assets and liabilities and for carry-forward tax losses, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company recognizes a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value, and if it is more likely than not that some portion of the entire deferred tax asset will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including results of recent operations, future reversals of existing taxable temporary differences, and projected future taxable income.
Deferred tax assets and liabilities are classified as long-term assets and liabilities in the consolidated balance sheets.
The Company applies a more-likely-than-not recognition threshold to uncertain tax positions based on the technical merits of the income tax positions taken. The Company does not recognize a tax benefit unless it is more-likely-than-not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense.
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|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
y.Legal contingencies:
The Company is periodically involved in various legal claims and proceedings. The Company reviews the status of each legal matter it is involved and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. These accruals are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. The Company does not accrue for contingent losses that are considered to be reasonably possible, but not probable.
z.Basic and diluted net income per share:
Basic net income per share is computed by dividing net income attributable to shareholders by the weighted-average number of ordinary shares outstanding during the period. Diluted net income per share is computed by giving effect to all potential weighted average dilutive ordinary shares, including employee stock options, RSUs and PSUs, shares issuable pursuant to the ESPP, and Convertible Notes. The dilutive potential shares are computed using the treasury stock method or the as-if converted method, as applicable.
aa.Treasury shares:
The Company repurchased its ordinary shares and holds them as treasury shares. The Company presents the cost to repurchase treasury shares as a reduction of shareholders' equity (deficiency).
ab.Concentration of credit risks:
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, short-term and restricted deposits, and marketable debt securities.
For cash and cash equivalents, restricted cash, and short-term and restricted deposits, the Company is exposed to credit risk in the event of default by the financial institutions to the extent of the amounts recorded on the consolidated balance sheets.
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WIX.COM LTD. AND ITS SUBSIDIARIES |
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|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The Company maintains its cash and cash equivalents and short-term and restricted deposits with various financial institutions globally that management believes are of high credit quality, and the Company has not experienced any losses on these accounts.
The Company’s marketable debt securities consist of investments in government, corporate and government sponsored enterprises debentures. The Company’s investment policy minimizes credit risk by setting limits for minimum credit rating and maximum concentration per issuer, thereby reducing credit risk concentrations.
ac.Fair value measurements:
The Company measures certain financial assets and liabilities at fair value on a recurring basis and certain financial and non-financial assets and liabilities at fair value on a non-recurring basis, when a change in fair value or impairment is evidenced or for disclosure purposes. The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), that defines fair value and provides a framework for measuring and disclosing fair value. Fair value is based on the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. ASC 820 establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The categorization within the hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. Three levels of inputs may be used to measure fair value.
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
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WIX.COM LTD. AND ITS SUBSIDIARIES |
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|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
ad.Impairment, restructuring and other costs:
Impairment, restructuring and other costs consist of impairment of right-of-use (“ROU”) assets and related leasehold improvements, employee severance costs, and other costs associated with restructuring and exit activities. Refer to Note 18 for additional information.
ae.Leases:
The Company accounts for its leases in accordance with ASC Topic 842, Leases (“ASC 842”). The Company determines if an arrangement is a lease at inception and classifies its leases at commencement. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term; the lease contains an option to purchase the asset that is reasonably certain to be exercised; the lease term is for a major part of the remaining useful life of the asset; the present value of the lease payments equals or exceeds substantially all of the fair value of the asset; or the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of lease term. A lease is classified as an operating lease if it does not meet any one of these criteria. During the periods presented, all of the Company’s leases are accounted for as operating leases.
The Company elected the practical expedient to not separate lease and non-lease components for its leases. Certain lease agreements contain variable payments, which are excluded from the measurement of the operating lease assets and lease liabilities, and are expensed as incurred.
ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets are then adjusted for any prepaid or deferred lease payments and lease incentives. Any payments incurred prior to lease commencement for lessor-owned assets are also included in the carrying amount of the ROU assets.
As the Company’s leases do not generally provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease. These options are included in the lease terms when it is reasonably certain they will be exercised. The Company has made an accounting policy election not to recognize ROU assets and lease liabilities for leases with an initial term of 12 months or less.
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WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
The Company remeasures its lease liabilities and ROU assets upon the occurrence of a lease modification not accounted for as a separate contract, or a triggering event that changes the certainty of the Company exercising an option to renew or terminate the lease. In these cases, the lease liability is remeasured based on the modified lease terms using a revised discount rate, and a corresponding adjustment is made to the carrying amount of the related ROU asset. The Company has elected to use the layered approach when remeasuring ROU assets into its functional currency. Under this approach, the Company remeasures only the additional ROU asset, if any, due to a modification that is not accounted for as a new lease or other remeasurement event, using the exchange rate at the modification or remeasurement date.
Operating lease expenses are recognized in the consolidated statements of comprehensive income on a straight-line basis over the lease term, except for impaired leases for which the lease expenses are recognized on a declining basis over the remaining lease term. The Company subleases certain leased office spaces to third parties, and recognizes sublease income on a straight-line basis over the sublease term.
The carrying amounts of ROU assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts of such assets may not be recoverable. During the year ended December 31, 2023, the Company recorded an impairment charge of $25,525 for certain ROU assets. See Note 18 for further information. No material impairments were recognized in the other periods presented.
Operating lease assets and liabilities are presented in the Company’s consolidated balance sheets in long-term assets and current and long-term liabilities.
af.Segment information:
The Company applies ASC Topic 280, Segment Reporting (“ASC 280"). Operating segments are defined as components of an entity for which separate financial information is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s CODM reviews financial information presented on a consolidated basis for the purposes of making operating decisions, assessing financial performance, and allocating resources. As such, the Company has determined that it operates in one operating and reportable segment. Refer to Note 17 for additional information.
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WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
ag.Recent accounting pronouncements:
Accounting pronouncements adopted in the year
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amended guidance requires enhanced transparency for certain income tax disclosures, primarily related to the rate reconciliation and income taxes paid. This guidance became effective for the Company on January 1, 2025, and was adopted prospectively in these consolidated financial statements. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements, but resulted in enhanced income tax disclosures. Refer to Note 14 for additional information.
Accounting pronouncements not yet adopted
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amended guidance provides a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under Topic 606, including such assets acquired in a business combination. Under the practical expedient, an entity may assume that current conditions as of the balance sheet date will remain unchanged over the remaining life of these assets. This guidance will be effective for the Company for annual periods beginning January 1, 2026, on a prospective basis, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement -Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amended guidance requires additional disclosure of certain costs and expenses within the notes to the financial statements. This guidance will be effective for the Company for annual periods beginning January 1, 2027, and will be applied prospectively. Early adoption and retrospective application are permitted. The Company is currently assessing the impact of this ASU on its consolidated financial statements and related disclosures.
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WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting for costs related to internal-use software and better align it with current software development practices. The amended guidance removes references to project stages and clarifies when entities are required to begin capitalizing eligible costs. This guidance will be effective for the Company for annual periods beginning January 1, 2028, with early adoption permitted. The guidance may be applied prospectively, retrospectively, or using a modified prospective transition method. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.
There have been no other recent accounting pronouncements, changes in accounting pronouncements, or recently adopted accounting guidance during the year ended December 31, 2025, that are of significance or potential significance to the Company.
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WIX.COM LTD. AND ITS SUBSIDIARIES |
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|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
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NOTE 3:- BUSINESS COMBINATIONS
Base44:
On June 13, 2025, the Company acquired 100% of the outstanding shares of Base44, Inc. (“Base44”), an AI-powered platform that enables users to create custom software and applications using natural language, without traditional coding. Base44’s acquisition is intended to support the Company’s strategy to further expand its suite of AI-driven solutions and access to the application development market.
The total purchase consideration for the acquisition of Base44 was $92,158, consisting of cash payment of $18,058 and contingent consideration related to the earnout arrangement described below, with an acquisition-date fair value of $74,100. Of the cash consideration, $1,000 was placed in escrow for 12 months to secure certain indemnification obligations. The acquisition was accounted for as a business combination in accordance with ASC 805.
Under the purchase agreement, the founder of Base44 (the “Founder”) is eligible to receive additional earnout payments, based on certain revenue-related metrics for the calendar years 2025 through 2028. These earnout payments are accounted for as a liability-classified contingent consideration and included in the purchase price for the acquisition, except for certain portions that require the Founder’s continued employment, which are recognized as compensation for post-combination services and expensed over the applicable service period. The contingent consideration was initially recognized as a liability at its fair value and is remeasured at fair value on a recurring basis. See Note 4 for additional information.
Additionally, the Founder and certain employees of Base44 are eligible to receive cash retention bonuses and other payments totaling $42,988, subject to their continued service with the Company. These amounts are accounted for as compensation for post-combination services and are expensed over the requisite service period through 2028. The Founder and certain key employees are also eligible for equity awards with a total value of $8,000, consisting of RSUs and PSUs. These awards relate to post-combination services and are recognized as stock-based compensation expense over a four-year vesting period.
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WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 3:- BUSINESS COMBINATIONS (Cont.)
The following table summarizes the preliminary purchase price allocation of the fair values of the assets acquired and liabilities assumed at the acquisition date:
|
|
|
|
|
|
|
|
|
|
|
Fair Value |
|
|
|
| Cash and cash equivalents |
|
$ |
117 |
|
| Other current assets |
|
65 |
|
| Intangible assets |
|
14,130 |
|
| Goodwill |
|
80,893 |
|
|
|
|
| Total Assets |
|
95,205 |
|
|
|
|
| Current liabilities |
|
80 |
|
| Deferred tax liabilities |
|
2,967 |
|
|
|
|
| Total Liabilities |
|
3,047 |
|
|
|
|
| Cash consideration |
|
18,058 |
|
| Contingent consideration |
|
74,100 |
|
|
|
|
| Total purchase consideration |
|
$ |
92,158 |
|
The identified intangible assets acquired consist of technology and a trade name, with acquisition-date fair values of $11,350 and $2,780, respectively. The Company utilized an income-based approach to determine the fair value of these assets. As of the acquisition date, the estimated useful lives of both assets are 4 years. The goodwill generated from the acquisition of Base44 is primarily attributable to expected synergies from the business combination and acquired workforce. The goodwill is not deductible for income tax purposes.
Transaction costs incurred in connection with the acquisition during the year ended December 31, 2025 totaled $910 and were recorded within general and administrative expenses in the consolidated statements of comprehensive income. Pro forma results for this acquisition were not presented as the effects were not material to the Company's financial results.
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WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 3:- BUSINESS COMBINATIONS (Cont.)
Hour One:
On May 13, 2025, the Company acquired 100% of the outstanding shares of Hour One AI Ltd. (“Hour One”), a generative AI media platform that enables scalable creation of personalized, studio-quality video and interactive content, for a total cash consideration of $6,667. Of this amount, $1,400 was placed in escrow for 12 months to secure certain indemnification obligations. Hour One’s acquisition aims to strengthen the Company’s access to advanced AI-powered content creation technologies, which the Company believes will shape the future of visual design creation. The acquisition was accounted for as a business combination in accordance with ASC 805.
The purchase agreement also provides for cash retention bonuses totaling $3,000 to the founders and certain key employees of Hour One, which are contingent upon their continued employment with the Company for up to nine-month period following the closing date. Additionally, the agreement provides for grants of RSUs with an aggregate value of approximately $10,000, which vest over a four-year period subject to continued employment. These cash bonuses and RSU awards are accounted for as compensation for post-combination services and are recognized as expenses over their respective service periods.
The following table summarizes the preliminary purchase price allocation of the assets acquired and liabilities assumed at the acquisition date:
|
|
|
|
|
|
|
|
|
|
|
Fair Value |
|
|
|
| Cash and cash equivalents |
|
$ |
569 |
|
| Other current assets |
|
325 |
|
| Intangible assets |
|
2,500 |
|
| Goodwill |
|
4,800 |
|
|
|
|
| Total Assets |
|
8,194 |
|
|
|
|
| Current liabilities |
|
1,227 |
|
| Deferred tax liabilities |
|
300 |
|
|
|
|
| Total Liabilities |
|
1,527 |
|
|
|
|
| Purchase cash consideration |
|
$ |
6,667 |
|
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 3:- BUSINESS COMBINATIONS (Cont.)
The identified intangible assets acquired are comprised of technology, which was valued using an income-based approach and has an estimated useful life of 8 years. The goodwill generated from the acquisition of Hour One is primarily attributable to expected synergies and acquired workforce. The goodwill is not deductible for income tax purposes.
Transaction costs incurred in connection with the acquisition during the year ended December 31, 2025 totaled $247 and were recorded within general and administrative expenses in the consolidated statements of comprehensive income. Pro forma results for this acquisition were not presented as the effects were not material to the Company's financial results.
NOTE 4:- FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables represent the fair value hierarchy of the Company's financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025 |
|
|
Fair value measurements using input type |
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| Financial assets: |
|
|
|
|
|
|
|
|
| Money market funds |
|
$ |
187,931 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
187,931 |
|
| Marketable securities |
|
360,703 |
|
|
597,354 |
|
— |
|
|
958,057 |
|
| Foreign currency derivative assets |
|
— |
|
|
22,128 |
|
— |
|
|
22,128 |
|
| Financial liabilities: |
|
|
|
|
|
|
|
|
| Foreign currency derivative liabilities |
|
— |
|
|
(11,222) |
|
|
— |
|
|
(11,222) |
|
Contingent consideration (*) |
|
— |
|
|
— |
|
|
(89,531) |
|
|
(89,531) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
548,634 |
|
|
$ |
608,260 |
|
|
$ |
(89,531) |
|
|
$ |
1,067,363 |
|
(*) Related to Base44 acquisition, as described in Note 3. The contingent consideration liability includes $5,822 classified within accrued expenses and other current liabilities and $83,709 classified within other long-term liabilities on the Company’s consolidated balance sheet.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 4:- FAIR VALUE MEASUREMENTS (Cont.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2024 |
|
|
Fair value measurements using input type |
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| Financial assets: |
|
|
|
|
|
|
|
|
| Money market funds |
|
$ |
450,398 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
450,398 |
|
| Marketable securities |
|
282,384 |
|
|
62,344 |
|
— |
|
|
344,728 |
|
| Foreign currency derivative assets |
|
— |
|
|
13,144 |
|
— |
|
|
13,144 |
| Financial liabilities: |
|
|
|
|
|
|
|
|
| Foreign currency derivative liabilities |
|
— |
|
|
(2) |
|
|
— |
|
|
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
732,782 |
|
|
$ |
75,486 |
|
|
$ |
— |
|
|
$ |
808,268 |
|
In accordance with ASC 820, the Company measures its money market funds, marketable securities and foreign currency derivative contracts at fair value. Money market funds and marketable securities are classified within Level 1 or Level 2. This is because these assets are valued using quoted market prices for identical assets in active markets or alternative pricing sources and models utilizing market observable inputs. Foreign currency derivative contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments.
The Company estimates the fair value of the contingent consideration liability using a Monte Carlo simulation model, which incorporates significant unobservable inputs, including projected revenue-related metrics and revenue volatility (50%), based on the earnout formula specified in the purchase agreement. The contingent consideration liability is classified as Level 3. The valuation assumptions are reviewed regularly and require significant judgment. Changes in business or economic conditions could materially impact the fair value of the liability.
A rollforward of the fair value of the contingent consideration liability for the year ended December 31, 2025 is as follows:
|
|
|
|
|
|
|
|
|
|
|
Fair Value |
|
|
|
| Balance as of December 31, 2024 |
|
$ |
— |
|
|
|
|
| Acquisition of Base44 (Note 3) |
|
74,100 |
|
| Change in fair value |
|
15,431 |
|
|
|
|
| Balance as of December 31, 2025 |
|
$ |
89,531 |
|
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 4:- FAIR VALUE MEASUREMENTS (Cont.)
Assets Measured at Fair Value on a Non-Recurring Basis
Upon the occurrence of certain events, the Company remeasures the fair value of certain assets on a non-recurring basis. These assets include equity investments in privately held companies for which the Company utilizes the measurement alternative, property, plant and equipment, ROU assets, intangible assets and goodwill.
Investments in Privately Held Companies
As disclosed in Note 2(l), the Company accounts for equity investments in private companies without readily determinable market values using the measurement alternative.
ROU Assets and Related Leasehold Improvements
During the year ended December 31, 2023, ROU assets and related leasehold improvements with an aggregate carrying amount of $39,198 were written down to an aggregate fair value of $13,293, resulting in an impairment charge of $25,905. Refer to Note 18 for additional information. The fair value of these assets, which represents a Level 3 measurement, was estimated using an income approach based on market participant expectations of future sublease income, taking into consideration the estimated time period it will take to obtain a sublease, the sublease rate, and the applicable discount rate, which are considered unobservable inputs.
Assets and Liabilities Measured at Fair Value for Disclosure Purposes Only
Convertible Notes
As of December 31, 2025, the estimated fair value of the 2030 Convertible Notes was $1,021,223. As of December 31, 2024, the estimated fair value of the 2025 Convertible Notes was $555,738. The 2025 Convertible Notes were fully repaid on August 15, 2025. The 2023 Convertible Notes were fully repaid on July 1, 2023. See Note 10 for further information. The fair value of the Convertible Notes is considered to be Level 2 within the fair value hierarchy and was determined based on quoted prices of the Convertible Notes in an over-the-counter market.
Other Assets and Liabilities
The carrying values of the Company’s financial instruments, other than those presented above, including cash and cash equivalents, short-term and restricted deposits, trade receivables, trade payables, employees and payroll accruals, and accrued expenses and other current liabilities, approximate fair values due to the short-term maturities of these instruments.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 5:- MARKETABLE SECURITIES
The following tables present the amortized cost, gross unrealized gains and losses and fair value of the Company's marketable debt securities as of December 31, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2025 |
|
2024 |
|
|
Amortized cost |
|
Gross unrealized gains |
|
Gross unrealized losses |
|
Fair Value |
|
Amortized cost |
|
Gross unrealized gains |
|
Gross unrealized losses |
|
Fair Value |
|
|
|
|
|
|
|
|
|
| Available-for-sale debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| U.S. Treasury and other U.S. government agencies securities |
|
$ |
131,728 |
|
|
$ |
100 |
|
|
$ |
(111) |
|
|
$ |
131,717 |
|
|
$ |
1,997 |
|
|
$ |
— |
|
|
$ |
(9) |
|
|
$ |
1,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Corporate debt securities |
|
504,164 |
|
|
222 |
|
|
(251) |
|
|
504,135 |
|
|
62,706 |
|
|
(*) |
|
(362) |
|
|
62,344 |
|
|
|
635,892 |
|
|
322 |
|
|
(362) |
|
|
635,852 |
|
|
64,703 |
|
|
— |
|
|
(371) |
|
|
64,332 |
|
| Trading debt securities (**): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debt securities issued by other governments |
|
|
|
|
|
|
|
322,205 |
|
|
|
|
|
|
|
|
280,396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
$ |
635,892 |
|
|
$ |
322 |
|
|
$ |
(362) |
|
|
$ |
958,057 |
|
|
$ |
64,703 |
|
|
$ |
— |
|
|
$ |
(371) |
|
|
$ |
344,728 |
|
(*) Less than $1.
(**) Net unrealized gains from fair value changes on trading debt securities held as of December 31, 2025, amounted to $39,535.
The following tables present the fair values and unrealized losses of the Company's available-for-sale debt securities, that have been in a continuous unrealized loss position, categorized by the length of time, as of December 31, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025 |
|
|
Less than 12 months |
|
12 months or greater |
|
Total |
|
|
Fair value |
|
Gross unrealized losses |
|
Fair value |
|
Gross unrealized losses |
|
Fair value |
|
Gross unrealized losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Corporate debt securities |
|
— |
|
|
— |
|
|
4,928 |
|
|
(50) |
|
|
4,928 |
|
|
(50) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,928 |
|
|
$ |
(50) |
|
|
$ |
4,928 |
|
|
$ |
(50) |
|
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 5:- MARKETABLE SECURITIES (Cont.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2024 |
|
|
Less than 12 months |
|
12 months or greater |
|
Total |
|
|
Fair value |
|
Gross unrealized losses |
|
Fair value |
|
Gross unrealized losses |
|
Fair value |
|
Gross unrealized losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
| U.S. Treasury and other U.S. government agencies securities |
|
$ |
1,988 |
|
|
$ |
(9) |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,988 |
|
|
$ |
(9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Corporate debt securities |
|
55,458 |
|
|
(181) |
|
|
6,135 |
|
|
(181) |
|
|
61,593 |
|
|
(362) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
$ |
57,446 |
|
|
$ |
(190) |
|
|
$ |
6,135 |
|
|
$ |
(181) |
|
|
$ |
63,581 |
|
|
$ |
(371) |
|
The following table outlines the Company's available-for-sale debt securities by contractual maturities, as of December 31, 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized Cost |
|
Fair Value |
|
|
|
|
|
| Due within one year |
|
$ |
161,656 |
|
|
$ |
161,654 |
|
| Due between one and five years |
|
474,236 |
|
|
474,198 |
|
|
|
|
|
|
| Total |
|
$ |
635,892 |
|
|
$ |
635,852 |
|
Amortized cost and fair value balances exclude accrued interest receivable on available-for-sale debt securities, which totaled $5,096 and $479 as of December 31, 2025 and 2024, respectively, and were included within prepaid expenses and other current assets in the consolidated balance sheets.
As of December 31, 2025 and 2024, the Company did not hold any marketable equity securities.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 6:- PREPAID EXPENSES AND OTHER CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2025 |
|
2024 |
|
|
|
|
|
| Government authorities |
|
$ |
8,047 |
|
|
$ |
9,656 |
|
| Foreign currency derivative assets |
|
22,128 |
|
|
13,144 |
|
| Prepaid expenses |
|
29,353 |
|
|
20,909 |
|
Receivables related to share-based awards (*) |
|
3,004 |
|
|
72,265 |
|
| Prepaid employee compensation related to business combination |
|
15,415 |
|
|
— |
|
| Other current assets |
|
18,305 |
|
|
12,603 |
|
|
|
|
|
|
|
|
$ |
96,252 |
|
|
$ |
128,577 |
|
(*) Represent amounts due to the Company for tax payments made by the Company on behalf of employees and other beneficiaries in connection with the exercise of share-based awards.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 7:- PROPERTY AND EQUIPMENT, NET
The composition of property and equipment, net is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2025 |
|
2024 |
| Cost: |
|
|
|
|
|
|
|
|
|
| Leasehold improvements |
|
$ |
131,208 |
|
|
$ |
129,326 |
| Computers, peripheral equipment and electronic equipment |
|
35,474 |
|
|
40,804 |
|
| Internal use software |
|
14,592 |
|
|
12,974 |
|
| Office furniture and equipment |
|
9,292 |
|
|
8,521 |
|
| Vehicles |
|
301 |
|
|
289 |
|
|
|
|
|
|
|
|
190,867 |
|
|
191,914 |
|
|
|
|
|
|
| Less - accumulated depreciation |
|
76,448 |
|
|
63,759 |
|
|
|
|
|
|
| Depreciated cost |
|
$ |
114,419 |
|
|
$ |
128,155 |
Depreciation expense related to property and equipment, net was included in the following line items in the consolidated statements of comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Cost of revenues |
|
$ |
2,395 |
|
|
$ |
2,722 |
|
|
$ |
3,060 |
|
| Research and development, net |
|
14,349 |
|
|
14,296 |
|
|
10,566 |
|
| Selling and marketing |
|
5,059 |
|
|
5,401 |
|
|
4,366 |
|
| General and administrative |
|
2,688 |
|
|
2,827 |
|
|
2,500 |
|
|
|
|
|
|
|
|
|
|
$ |
24,491 |
|
|
$ |
25,246 |
|
|
$ |
20,492 |
|
During 2025 and 2024, the Company recorded reductions of $11,802 and $14,024, respectively, to the cost and accumulated depreciation balances related to fully depreciated equipment no longer in use.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 8:- INTANGIBLE ASSETS, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2025 |
|
2024 |
| Cost: |
|
|
|
|
|
|
|
|
|
| Technology |
|
$ |
42,669 |
|
|
$ |
28,819 |
|
| Customer relations |
|
17,603 |
|
|
17,603 |
|
| Non-Competition agreement |
|
127 |
|
|
127 |
|
| Customer data |
|
12,043 |
|
|
12,043 |
|
| Domain |
|
552 |
|
|
552 |
|
| Trade Name |
|
2,780 |
|
|
— |
|
| Other intangible assets |
|
291 |
|
|
291 |
|
|
|
|
|
|
|
|
76,065 |
|
|
59,435 |
|
|
|
|
|
|
| Less - accumulated amortization |
|
44,255 |
|
|
37,294 |
|
|
|
|
|
|
| Intangible assets, net |
|
$ |
31,810 |
|
|
$ |
22,141 |
|
Estimated amortization expense for the years ended:
|
|
|
|
|
|
|
|
|
| 2026 |
|
$ |
8,088 |
| 2027 |
|
8,040 |
|
| 2028 |
|
7,448 |
|
| 2029 |
|
3,938 |
|
| 2030 |
|
1,811 |
|
| Thereafter |
|
2,485 |
|
|
|
|
|
|
$ |
31,810 |
Amortization expense related to intangible assets, net was included in the following line items in the consolidated statements of comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Cost of revenues |
|
$ |
4,420 |
|
|
$ |
2,669 |
|
|
$ |
2,669 |
|
| Selling and marketing |
|
2,538 |
|
|
3,196 |
|
|
3,281 |
|
| General and administrative |
|
4 |
|
|
4 |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
$ |
6,962 |
|
|
$ |
5,869 |
|
|
$ |
5,954 |
|
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 9:- ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2025 |
|
2024 |
|
|
|
|
|
| Accrued expenses |
|
$ |
53,137 |
|
|
$ |
31,857 |
| Government authorities |
|
47,016 |
|
|
31,387 |
|
| Foreign currency derivative liabilities |
|
11,222 |
|
|
2 |
|
| Contingent consideration, current |
|
5,822 |
|
|
— |
|
| Accrued employee compensation related to business combination |
|
29,519 |
|
|
— |
|
|
|
|
|
|
|
|
$ |
146,716 |
|
|
$ |
63,246 |
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 10:- CONVERTIBLE NOTES
2030 Convertible Notes
In September 2025, the Company issued $1,150,000 aggregate principal amount, 0.00% coupon rate of Convertible Senior Notes due 2030 (the “2030 Convertible Notes”). The 2030 Convertible Notes will mature on September 15, 2030, unless earlier repurchased, redeemed or converted. Upon conversion, the Company will pay or deliver, at its election, cash, ordinary shares, or a combination of cash and ordinary shares.
The 2030 Convertible Notes are initially convertible at a rate of 4.7509 ordinary shares per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $210.49 per ordinary share). The conversion rate is subject to adjustment in accordance with the terms of the indenture. Following certain corporate events that occur prior to the maturity date or the Company’s delivery of a redemption notice, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert their notes in connection with such corporate event or notice of redemption, as the case may be.
Conversion terms of the 2030 Convertible Notes
Holders may convert their notes at their option at any time prior to the close of business on the business day immediately preceding March 15, 2030, only under the following circumstances:
a.During any calendar quarter commencing after December 31, 2025 (and only during such calendar quarter), if the last reported sale price of the Company's ordinary shares for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including the last trading day of the immediately preceding quarter was greater than or equal to 130% of the conversion price on each applicable trading day.
b. During the five-business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the ordinary shares and the conversion rate on each such trading day.
c.If the Company called the notes for a tax or optional redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the applicable redemption date.
d.Upon the occurrence of specified corporate events.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 10:- CONVERTIBLE NOTES (Cont.)
On or after March 15, 2030, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2030 Convertible Notes at any time, regardless of the foregoing circumstances. During the year ended December 31, 2025, the conditions allowing holders of the 2030 Convertible Notes to convert were not met. The Notes are therefore not convertible as of December 31, 2025 and are classified as long-term liability.
Holders of the 2030 Convertible Notes who convert their Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the indenture), or in connection with a redemption notice, may be entitled, under certain circumstances, to an increase in the conversion rate. Additionally, upon the occurrence of a fundamental change, holders may require the Company to repurchase all or a portion of their 2030 Convertible Notes at a price equal to 100% of the principal amount being repurchased, plus any accrued and unpaid special interest.
The Company may not redeem the 2030 Convertible Notes prior to September 20, 2028, except in the event of certain changes in tax law. On or after September 20, 2028, the Company may redeem for cash all or any portion of the 2030 Convertible Notes, at its option, if the last reported sale price of its ordinary shares has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on and including the trading day immediately preceding the date on which the Company provides notice of the redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid special interest, if any, to, but excluding, the redemption date.
The carrying amount of the liability is represented by the face amount of the notes, less total issuance costs, plus any amortization of issuance costs. The total issuance costs upon issuance of the notes were $25,942 and are amortized to interest expense using the effective interest rate method over the contractual term of the notes. Interest expense is recognized at an annual effective interest rate of 0.46% over the contractual term of the notes.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 10:- CONVERTIBLE NOTES (Cont.)
The net carrying amount of the 2030 Convertible Notes were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2025 |
|
2024 |
|
|
|
|
|
| Principal original amount |
|
$ |
1,150,000 |
|
|
$ |
— |
|
| Unamortized debt issuance costs |
|
(24,231) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
| Net carrying amount |
|
$ |
1,125,769 |
|
|
$ |
— |
|
The Company recognized interest expense on the 2030 Convertible Notes as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Amortization of debt issuance costs |
|
$ |
1,711 |
|
$ |
— |
|
$ |
— |
2030 Capped Call Transactions
In connection with the pricing of the 2030 Convertible Notes, the Company entered into Capped Call Transactions (the “2030 Capped Call Transactions” or “2030 Capped Calls”) with certain of the initial purchasers of the notes and/or their affiliates and other financial institutions.
The 2030 Capped Call Transactions are purchased call options in respect of the Company’s ordinary shares, which cover, subject to anti-dilution adjustments substantially similar to those in the 2030 Convertible Notes, the number of the Company’s ordinary shares that initially underlie the 2030 Convertible Notes. Each 2030 Capped Call Transaction has an initial strike price of $210.49 per share and an initial cap price of $267.89 per share. The 2030 Capped Call Transactions are intended to offset potential dilution to the Company’s ordinary shares and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount upon any conversion of the notes under certain circumstances. The 2030 Capped Call Transactions will expire in 2030, if not unwound earlier.
The Company paid an aggregate amount of $71,875 for the 2030 Capped Call Transactions, which was recorded as a reduction to additional paid-in capital in the consolidated balance sheets.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 10:- CONVERTIBLE NOTES (Cont.)
2025 Convertible Notes
In August 2020, The Company issued $575,000 aggregate principal amount, 0.00% coupon rate, of Convertible Senior Notes due 2025 (the “2025 Convertible Notes”). The 2025 Convertible Notes were set to mature on August 15, 2025, unless earlier repurchased, redeemed or converted. Upon conversion, the Company could pay or deliver, at its election, cash, ordinary shares, or a combination of cash and ordinary shares. The 2025 Convertible Notes were not converted, and the Company repaid the full principal amount of $575,000 at maturity on August 15, 2025.
The 2025 Convertible Notes were convertible at a conversion rate of 2.4813 ordinary shares per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $403.01 per ordinary share). The conversion rate was subject to adjustment in accordance with the terms of the indenture. Following certain corporate events that occur prior to the maturity date, or the Company’s delivery of a redemption notice, the Company was required, in certain circumstances, to increase the conversion rate for a holder who elects to convert their notes in connection with such corporate event or notice of redemption, as the case may be.
Conversion terms of the 2025 Convertible Notes:
Holders were able to convert their notes at their option at any time prior to the close of business on the business day immediately preceding February 15, 2025 only under the following circumstances:
a.During any calendar quarter commencing after December 31, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s ordinary shares for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding quarter was greater than or equal to 130% of the conversion price on each applicable trading day.
b.During the five-business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the ordinary shares and the conversion rate on each such trading day.
c.If the Company called the notes for a tax or optional redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the applicable redemption date; or
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 10:- CONVERTIBLE NOTES (Cont.)
d.Upon the occurrence of specified corporate events.
On or after February 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders were able to convert their 2025 Convertible Notes at any time, regardless of the foregoing circumstances. The conditions for conversion of the 2025 Convertible Notes were not satisfied.
Holders of the 2025 Convertible Notes who converted their notes in connection with certain corporate events that constituted a make-whole fundamental change (as defined in the indenture), or in connection with a redemption notice, under certain circumstances, could have been entitled to an increase in the conversion rate. Additionally, upon the occurrence fundamental change, holders could have required the Company to repurchase all or a portion of their 2025 Convertible Notes at a price equal to 100% of the principal amount being repurchased, plus any accrued and unpaid special interest.
The Company could not redeem the 2025 Convertible Notes prior to August 21, 2023, except in the event of certain changes in tax law. On or after August 21, 2023. the Company could redeem for cash all or any portion of the 2025 Convertible Notes, at its option, if the last reported sale price of its ordinary shares had been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of the redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus any accrued and unpaid special interest if any, to, but excluding, the redemption date.
The carrying amount of the liability was represented by the face amount of the notes, less total issuance costs, plus any amortization of issuance costs. The total issuance costs upon issuance of the notes were $15,712 and are amortized to interest expense using the effective interest rate method over the contractual term of the notes. Interest expense was recognized at an annual effective interest rate of 0.56% over the contractual term of the notes.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 10:- CONVERTIBLE NOTES (Cont.)
The net carrying amount of the 2025 Convertible Notes were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2025 |
|
2024 |
|
|
|
|
|
| Principal original amount |
|
$ |
575,000 |
|
|
$ |
575,000 |
|
| Unamortized debt issuance costs |
|
— |
|
|
(2,120) |
|
| Repayment of convertible notes |
|
(575,000) |
|
|
— |
|
|
|
|
|
|
| Net carrying amount |
|
$ |
— |
|
|
$ |
572,880 |
|
The Company recognized interest expense on the 2025 Convertible Notes as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Amortization of debt issuance costs |
|
$ |
2,120 |
|
$ |
3,166 |
|
$ |
3,148 |
2025 Capped Call Transactions
In connection with the pricing of the 2025 Convertible Notes, the Company entered into Capped Call Transactions (the “2025 Capped Call Transactions” or “2025 Capped Calls”) with certain of the purchasers of the notes and/or their affiliates and other financial institutions.
The 2025 Capped Call Transactions were purchased call options that gave the Company the option to purchase the Company's ordinary shares, subject to anti-dilution adjustments substantially identical to those in the 2025 Convertible Notes. The 2025 Capped Call Transactions were intended to offset potential dilution to the Company’s ordinary shares and/or offset the potential cash payments that the Company could have been required to make in excess of the principal amount upon conversion of the notes under certain circumstances. The 2025 Capped Call Transactions expired unexercised in 2025.
The Company paid an aggregate amount of $46,000 for the 2025 Capped Call Transactions, which was recorded as a reduction to additional paid-in capital in the consolidated balance sheets.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 10:- CONVERTIBLE NOTES (Cont.)
2023 Convertible Notes
In June and July of 2018, the Company issued $442,750 aggregate principal amount, 0.00% coupon rate, of Convertible Senior Notes due 2023 (the “2023 Convertible Notes”). During the first quarter of 2021, the 2023 Convertible Notes were partially converted into 560,770 ordinary shares. The Company fully repaid the remaining principal amount of $362,667 of the 2023 Convertible Notes at maturity on July 1, 2023.
The 2023 Convertible were convertible at a conversion rate of 7.0113 ordinary shares per $1,000 principal amount of notes (equivalent to a conversion price of approximately $142.63 per ordinary share). The conversion terms of the 2023 Convertible Notes were substantively similar to those of the 2030 Convertible Notes described above.
The total issuance costs upon issuance of the notes were $12,601 and were amortized using the effective interest method until the notes' conversion or maturity, as applicable. Interest expense was recognized at an annual effective interest rate of 0.58% over the contractual term of the notes, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Amortization of debt issuance costs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,046 |
|
2023 Capped Call Transactions
In connection with the pricing of the 2023 Convertible Notes, the Company entered into Capped Call Transactions (the “2023 Capped Call Transactions”). These transactions were designed to reduce the potential dilution to the ordinary shares upon any conversion of the 2023 Convertible Notes and/or offset any cash payments the Company might be required to make in excess of the principal amount upon conversion under certain events. The 2023 Capped Call Transactions expired out-of-the-money in 2023. The cost of the 2023 Capped Call Transactions, totaling $45,338, was recorded as a reduction to additional paid-in capital in the consolidated balance sheets.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 11:- LEASES
The Company has entered into operating lease agreements, primarily for office facilities located around the world. These leases expire at various dates through January 2044, including renewal options that are reasonably certain to be exercised. The Company's Headquarters Lease is its most significant lease.
The Company entered into a lease agreement for its corporate headquarters in April 2019 (the "Headquarters Lease"). According to the Headquarters Lease, the landlord constructed approximately 80,000 square meters (approximately 861,112 square feet) in Tel Aviv, Israel (the "Premises"), which are leased to the Company and serve as its corporate headquarters. The transfer of possession of the Premises to the Company took place in two phases, in 2022 and 2023. The initial lease term is 10 years, which commenced upon the transfer of possession of the first phase of the Premises. The Company has options to extend the lease for additional periods of up to 15 years, most of which are at its sole discretion and were included in the lease term for accounting purposes, as their exercise was determined to be reasonably certain. Lease payments under the Headquarters Lease are denominated in NIS and are linked to changes in the Israeli Consumer Price Index.
The components of lease expense were as follows for the periods presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Operating and variable lease cost |
|
$ |
43,742 |
|
|
$ |
42,080 |
|
|
$ |
38,839 |
|
| Short-term lease cost |
|
2,052 |
|
|
1,974 |
|
|
1,916 |
|
|
|
|
|
|
|
|
| Total operating lease cost |
|
$ |
45,794 |
|
|
$ |
44,054 |
|
|
$ |
40,755 |
|
The weighted-average remaining lease term and discount rate related to operating leases were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2025 |
|
2024 |
|
|
|
|
|
| Weighted-average remaining lease term |
|
16.98 |
|
17.93 |
| Weighted-average discount rate |
|
5.8% |
|
5.8% |
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 11:- LEASES (Cont.)
Cash payments related to operating lease liabilities for the years ended December 31, 2025, 2024 and 2023, were $38,727, $31,583, and $43,324, respectively.
The maturities of the Company’s operating lease liabilities were as follows:
|
|
|
|
|
|
|
|
|
| Fiscal years ending December 31, |
|
December 31, 2025 |
|
|
|
| 2026 |
|
$ |
40,351 |
| 2027 |
|
44,559 |
| 2028 |
|
44,505 |
| 2029 |
|
43,580 |
| 2030 |
|
41,854 |
| Thereafter |
|
508,464 |
|
|
|
| Total undiscounted lease payments |
|
$ |
723,313 |
|
|
|
| Less imputed interest |
|
$ |
262,473 |
|
|
|
| Total lease liabilities |
|
$ |
460,840 |
The Company subleases certain unused office space to third parties. Sublease income was immaterial for the years ended December 31, 2025, 2024 and 2023.
During the year ended December 31, 2023, the Company recorded an impairment charge of $25,525 for certain ROU assets. This impairment was attributed to leased office facilities that are no longer used for the Company’s business operation, part of which are being subleased. Refer to Note 18 for additional information. No material impairment was recognized during the years ended December 31, 2025 and 2024.
During the years ended December 31, 2025, 2024, and 2023, due to the Russia-Ukraine conflict that began in February 2022, the Company modified or terminated certain leases of office facilities in Ukraine, or received certain rent concessions in connection with such leases. The impact on the Company's consolidated financial statements was immaterial.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 12:- COMMITMENTS AND CONTINGENT LIABILITIES
Legal contingencies:
From time to time, the Company may become a party to litigation and subject to claims incidental to the ordinary course of business, including intellectual property claims, labor and employment matters, breach of contract claims, tax disputes and other matters. As of December 31, 2025, the Company is not involved in any claims or legal proceedings which require accrual of liability for the estimated loss or disclosure.
NOTE 13:- SHAREHOLDERS' EQUITY
a.Ordinary shares:
The ordinary shares of the Company confer on the holders thereof voting rights, rights to receive dividends and rights to participate in distribution of assets upon liquidation.
b.Treasury shares:
In July 2023, the Board authorized a share repurchase program allowing the Company to repurchase up to $500,000 of its ordinary shares and/or Convertible Notes. The initial repurchases pursuant to this repurchase program, as authorized by the Board and approved by the Israeli court, provided the Company with the authority to make repurchases of $300,000 of its ordinary shares and/or Convertible Notes through July 30, 2024. In February 2024, the Board increased this repurchase program by an additional $25,000.
In March and July 2024, the Board authorized share repurchase programs allowing the Company to repurchase up to an aggregate of $425,000 of its ordinary shares and/or Convertible Notes. Regulatory amendments passed earlier in 2024 eliminated the need for Israeli court approval for the Board-authorized repurchase programs, subject to certain conditions.
In February 2025, the Board authorized a share repurchase program allowing the Company to repurchase up to $200,000 of its ordinary shares and/or Convertible Notes. In May and August 2025, the Board increased the repurchase program by an additional $400,000 in aggregate.
During the year ended December 31, 2025, the Company repurchased 3,543,902 outstanding ordinary shares for $574,999. During the year ended December 31, 2024, the Company repurchased 3,593,721 outstanding ordinary shares for $466,302. During the year ended December 31, 2023, the Company repurchased 1,348,865 outstanding ordinary shares for $127,017.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.)
As of December 31, 2025, the Company had $225,000 remaining available under the share repurchase programs authorized by the Board. Refer to Note 20 for information on the authorization of a new share repurchase program in January 2026.
c.Share-based compensation:
In October 2013, the Board adopted a new Employee Shares Incentive Plan – the 2013 Incentive Compensation Plan, as amended from time to time, most recently on December 7, 2023 (the "2013 Plan"). The 2013 Plan provides for the grant of options, restricted shares, RSUs and PSUs.
Under the 2013 Plan, as of December 31, 2025, an aggregate of 1,907,903 shares were still available for future grant. Each option granted under the Plan expires no later than ten years from the date of grant. The vesting period of the options is generally four years, unless the Board or the Board's Compensation Committee determines otherwise. Any option which is forfeited or cancelled before expiration becomes available for future grants.
The total share-based compensation expense related to all of the Company's equity-based awards, which include options, RSUs, PSUs and employee share purchase rights issued pursuant to the Company's ESPP and recognized for the years ended December 31, 2025, 2024 and 2023 was comprised as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Cost of revenues |
|
$ |
13,915 |
|
|
$ |
14,146 |
|
|
$ |
15,013 |
|
| Research and development |
|
127,503 |
|
|
126,462 |
|
|
119,482 |
|
| Selling and marketing |
|
36,971 |
|
|
38,755 |
|
|
41,277 |
|
| General and administrative |
|
58,987 |
|
|
61,358 |
|
|
48,853 |
|
|
|
|
|
|
|
|
| Total share-based compensation expense |
|
$ |
237,376 |
|
$ |
240,721 |
|
$ |
224,625 |
Total unrecognized compensation cost amounted to $377,632 as of December 31, 2025, and is expected to be recognized over a weighted average period of approximately 2.69 years.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.)
d.Options granted to employees:
A summary of the activity in options granted to employees for the year ended December 31, 2025 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of
options |
|
Weighted
average
exercise
price |
|
Weighted
Average
remaining contractual term
(in years) |
|
Aggregate
intrinsic value |
|
|
|
|
|
|
|
|
|
| Balance at December 31, 2024 |
|
3,165,633 |
|
$ |
107.86 |
|
|
4.38 |
|
$ |
355,730 |
|
|
|
|
|
|
|
|
|
|
| Granted |
|
43,361 |
|
|
213.99 |
|
|
|
|
|
| Exercised |
|
(527,541) |
|
|
49.98 |
|
|
|
|
|
| Forfeited |
|
(5,559) |
|
|
135.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance at December 31, 2025 |
|
2,675,894 |
|
120.93 |
|
|
3.81 |
|
47,603 |
|
|
|
|
|
|
|
|
|
| Exercisable at December 31, 2025 |
|
2,564,968 |
|
119.34 |
|
|
3.63 |
|
46,946 |
|
|
|
|
|
|
|
|
|
| Vested and expected to vest at December 31, 2025 |
|
2,672,608 |
|
$ |
120.92 |
|
|
3.81 |
|
$ |
47,527 |
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.)
The Company estimates the fair value of share options granted using the Black-Scholes-Merton option-pricing model. The following table sets forth the parameters used in computation of the options compensation to employees for the years ended December 31, 2025, 2024 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Expected volatility |
|
56.26%-59.53% |
|
58.16%-59.04% |
|
59.91% |
| Expected dividends |
|
0% |
|
0% |
|
0% |
| Expected term (in years) |
|
5.12-5.18 |
|
5.10-5.16 |
|
5.05 |
| Risk free rate |
|
3.70%-4.31% |
|
4.08%-4.45% |
|
4.11% |
The following table sets forth the parameters used in computation of the ESPP for the years ended December 31, 2025, 2024 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Expected volatility |
|
40.52%-52.19% |
|
34.52%-43.55% |
|
50.40%-67.14% |
| Expected dividends |
|
0% |
|
0% |
|
0% |
| Expected term (in years) |
|
0.5 |
|
0.5 |
|
0.5 |
| Risk free rate |
|
3.98%-4.21% |
|
4.84%-5.27% |
|
5.17%-5.47% |
A summary of options data for the years ended December 31, 2025, 2024 and 2023, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Weighted-average grant date fair value of options granted, per option |
|
$ |
127.95 |
|
|
$ |
78.15 |
|
|
$ |
84.97 |
|
| Total intrinsic value of the options exercised |
|
$ |
55,684 |
|
|
$ |
102,390 |
|
|
$ |
19,450 |
|
The aggregate intrinsic value is calculated as the difference between the per-share exercise price and the deemed fair value of the Company's ordinary share for each share subject to an option multiplied by the number of shares subject to options at the date of exercise.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.)
The following tables summarize information about the Company's outstanding and exercisable options granted to employees as of December 31, 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise price
(range) |
|
Options outstanding
as of
December 31, 2025 |
|
Weighted average remaining
contractual term |
|
Options exercisable
as of December 31,
2025 |
|
Weighted average remaining
contractual term |
|
|
|
|
(years) |
|
|
|
(years) |
|
|
|
|
|
|
|
|
|
| 0-55.86 |
|
419,493 |
|
1.32 |
|
413,320 |
|
1.21 |
| 55.87-61.95 |
|
454,421 |
|
2.12 |
|
454,421 |
|
2.12 |
| 61.96-101.67 |
|
191,664 |
|
4.92 |
|
190,712 |
|
4.91 |
| 101.68-102.67 |
|
382,311 |
|
3.12 |
|
382,311 |
|
3.12 |
| 102.68-132.55 |
|
135,487 |
|
6.78 |
|
92,906 |
|
6.24 |
| 132.56-139 |
|
267,236 |
|
6.11 |
|
246,531 |
|
6.11 |
| 139.01-143.13 |
|
374,405 |
|
4.14 |
|
374,405 |
|
4.14 |
| 143.14-251.67 |
|
62,391 |
|
7.57 |
|
21,876 |
|
4.74 |
| 251.68-260.88 |
|
366,849 |
|
5.11 |
|
366,849 |
|
5.11 |
| 260.89-353.09 |
|
21,637 |
|
5.01 |
|
21,637 |
|
5.01 |
|
|
|
|
|
|
|
|
|
|
|
2,675,894 |
|
3.81 |
|
2,564,968 |
|
3.63 |
During the years ended December 31, 2025, 2024, and 2023, employees purchased 355,694, 410,665, and 575,034 ordinary shares, respectively, under the Company’s ESPP. These shares were issued at weighted-average purchase prices of $129.27, $97.69, and $61.76 per share, resulting in total proceeds of $45,980, $40,116, and $35,511 for the years ended December 31, 2025, 2024, and 2023, respectively.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.)
e.A summary of RSUs and PSUs activity for the year ended December 31, 2025, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of
shares |
|
Weighted
average
grant date
fair value per share |
|
|
|
|
|
|
|
|
|
|
| Unvested as of December 31, 2024 |
|
3,343,704 |
|
|
$ |
116.59 |
|
|
|
|
|
|
| Granted |
|
1,894,096 |
|
|
169.7 |
| Vested |
|
(1,636,925) |
|
|
125.29 |
| Forfeited |
|
(261,575) |
|
|
129.14 |
|
|
|
|
|
| Unvested as of December 31, 2025 |
|
3,339,300 |
|
|
$ |
141.60 |
|
The weighted-average grant date fair value of RSUs and PSUs granted during the years ended December 31, 2024 and 2023 was $116.94 and $87.96 per share, respectively. The total fair value of RSUs and PSUs vested during the years ended December 31, 2025, 2024 and 2023 was $270,253, $220,381, and $126,599, respectively.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.)
f.Comprehensive income:
The following table summarizes the changes in accumulated other comprehensive income, which is reported as a component of shareholders’ equity, for the years ended December 31, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2025 |
|
|
Unrealized gain (losses) on marketable securities |
|
Unrealized gain (losses) on cash flow hedges |
|
Total |
|
|
|
|
|
|
|
| Beginning balance, net |
|
$ |
(326) |
|
$ |
7,568 |
|
$ |
7,242 |
| Other comprehensive income before reclassifications, net |
|
331 |
|
44,537 |
|
44,868 |
| Amounts reclassified from accumulated other comprehensive income to earnings: |
|
|
|
|
|
|
| Cost of revenues |
|
— |
|
(1,563) |
|
(1,563) |
| Research and development, net |
|
— |
|
(20,206) |
|
(20,206) |
| Selling and marketing |
|
— |
|
(6,995) |
|
(6,995) |
| General and administrative |
|
— |
|
(4,401) |
|
(4,401) |
| Financial expenses, net |
|
(1) |
|
— |
|
(1) |
| Tax effect on other comprehensive income |
|
(40) |
|
(1,365) |
|
(1,405) |
|
|
|
|
|
|
|
| Total accumulated other comprehensive income (loss), net |
|
$ |
(36) |
|
|
$ |
17,575 |
|
|
$ |
17,539 |
|
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 13:- SHAREHOLDERS' EQUITY (Cont.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2024 |
|
|
Unrealized gain (losses) on marketable securities |
|
Unrealized gain (losses) on cash flow hedges |
|
Total |
|
|
|
|
|
|
|
| Beginning balance, net |
|
$ |
(3,096) |
|
$ |
7,288 |
|
$ |
4,192 |
| Other comprehensive income (loss) before reclassifications, net |
|
2,736 |
|
(7,138) |
|
(4,402) |
| Amounts reclassified from accumulated other comprehensive income (loss) to earnings: |
|
|
|
|
|
|
| Cost of revenues |
|
— |
|
360 |
|
360 |
| Research and development, net |
|
— |
|
4,475 |
|
4,475 |
| Selling and marketing |
|
— |
|
1,598 |
|
1,598 |
| General and administrative |
|
— |
|
1,023 |
|
1,023 |
| Financial income, net |
|
(10) |
|
— |
|
(10) |
| Tax effect on other comprehensive income |
|
44 |
|
(38) |
|
6 |
|
|
|
|
|
|
|
| Total accumulated other comprehensive income (loss), net |
|
$ |
(326) |
|
$ |
7,568 |
|
$ |
7,242 |
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 14:- INCOME TAXES
The Company's subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity.
a.Corporate tax in Israel:
The Israeli corporate tax rate was 23% for the years ended December 31, 2025, 2024 and 2023.
However, the effective tax rate payable by a company that qualifies as an Industrial Company that derives income from a Preferred Technological Enterprise or a Special Preferred Technological Enterprise (as discussed below) may be considerably less. Real capital gains derived by an Israeli company are subject to the prevailing corporate tax rate in the year of sale. The Company believes it qualifies as a Preferred Technological Enterprise and, accordingly, is eligible for a reduced corporate tax rate of 12% on its preferred technological income.
b.Income before taxes on income is comprised as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Domestic |
|
$ |
(3,630) |
|
|
$ |
133,707 |
|
|
$ |
25,408 |
|
| Foreign |
|
4,719 |
|
|
18,218 |
|
|
12,431 |
|
|
|
|
|
|
|
|
| Income before taxes on income |
|
$ |
1,089 |
|
|
$ |
151,925 |
|
$ |
37,839 |
c.Deferred income taxes:
Deferred taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts recorded for tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 14:- INCOME TAXES (Cont.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
2025 |
|
2024 |
| Deferred tax assets: |
|
|
|
|
|
|
|
|
|
| Net operating loss carryforward and credits |
|
$ |
5,979 |
|
|
$ |
6,574 |
|
| Operating lease liabilities |
|
50,650 |
|
|
46,203 |
|
| Research and development expenses carryforward |
|
10,486 |
|
|
8,479 |
|
| Share-based compensation |
|
65,199 |
|
|
55,301 |
|
|
|
|
|
|
| Accrued employees costs |
|
5,589 |
|
|
4,780 |
|
| Other |
|
6,866 |
|
|
2,041 |
|
|
|
|
|
|
| Deferred tax assets |
|
144,769 |
|
|
123,378 |
|
|
|
|
|
|
| Valuation allowance |
|
— |
|
|
(72,814) |
|
|
|
|
|
|
| Deferred tax liabilities: |
|
|
|
|
|
|
|
|
|
| Unrealized gains on marketable and other equity securities |
|
1,472 |
|
|
766 |
|
| Property and equipment |
|
1,232 |
|
|
941 |
|
| Operating lease ROU assets |
|
45,181 |
|
|
46,897 |
|
| Acquired intangible assets |
|
2,023 |
|
|
2,154 |
|
| Other |
|
4,235 |
|
|
1,771 |
|
|
|
|
|
|
| Deferred tax liabilities |
|
$ |
54,143 |
|
$ |
52,529 |
|
|
|
|
|
| Deferred tax assets (liabilities), net |
|
$ |
90,626 |
|
|
$ |
(1,965) |
|
|
|
|
|
|
| Deferred taxes are included in the consolidated balance sheets, as follows: |
|
|
|
|
|
|
|
|
|
| Long-term assets |
|
$ |
94,549 |
|
$ |
— |
| Long-term liabilities |
|
$ |
3,923 |
|
$ |
1,965 |
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 14:- INCOME TAXES (Cont.)
The Company periodically evaluates the realizability of its deferred tax assets, taking into account all available positive and negative evidence. In prior years, the Company concluded that a valuation allowance was required against the majority of its deferred tax assets, primarily due to a cumulative loss position during those years, which limited the extent to which other, more subjective forms of positive evidence, could be considered. As of December 31, 2025, the Company determined that a valuation allowance is no longer necessary, primarily due to its transition to sustained profitability in recent years, which provides objective and verifiable positive evidence, together with expectations of future taxable income. Accordingly, as of that date, the Company concluded that it is more likely than not that its deferred tax assets will be realized and recorded an income tax benefit of $70,920 during the year ended December 31, 2025 related to the reversal of the valuation allowance.
d.Income tax expense (benefit) is comprised as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Current: |
|
|
|
|
|
|
| Domestic |
|
$ |
38,198 |
|
|
$ |
5,710 |
|
|
$ |
6,557 |
|
| Foreign |
|
7,994 |
|
|
6,940 |
|
|
4,164 |
|
| Total current tax expense (benefit) |
|
46,192 |
|
|
12,650 |
|
|
10,721 |
|
|
|
|
|
|
|
|
| Deferred: |
|
|
|
|
|
|
| Domestic |
|
(92,878) |
|
|
953 |
|
|
(6,019) |
|
| Foreign |
|
(4,361) |
|
|
— |
|
|
— |
|
| Total deferred tax expense (benefit) |
|
(97,239) |
|
|
953 |
|
|
(6,019) |
|
|
|
|
|
|
|
|
| Total tax expense (income) |
|
$ |
(51,047) |
|
$ |
13,603 |
|
$ |
4,702 |
e.As described in Note 2(ag), the Company prospectively adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Accordingly, the revised disclosures are presented for the year ended December 31, 2025, and prior years reflect the disclosures required under the previous guidance.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 14:- INCOME TAXES (Cont.)
The following table presents a reconciliation of the Company’s theoretical income tax expense (benefit) to its actual income tax expense (benefit) for the year ended December 31, 2025, in accordance with the guidance in ASU 2023-09:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2025 |
|
|
Amount |
|
Percent |
|
|
|
|
|
| Statutory income tax |
|
250 |
|
23% |
|
|
|
|
|
| Foreign tax effects |
|
|
|
|
| United States |
|
|
|
|
| Statutory tax rate differences |
|
237 |
|
|
22% |
| Changes in valuation allowance |
|
(1,643) |
|
|
(151)% |
| Other |
|
1,323 |
|
|
122% |
| Brazil |
|
|
|
|
| Statutory tax rate differences |
|
250 |
|
|
23% |
| Withholding tax |
|
929 |
|
|
85% |
| PIS and COFINS tax credits |
|
(1,242) |
|
|
(114)% |
| Earnings remittance tax |
|
969 |
|
|
89% |
| Other |
|
608 |
|
|
56% |
| Other foreign jurisdictions |
|
(700) |
|
|
(64)% |
| Effect of cross-border tax laws |
|
217 |
|
|
20% |
| Tax credits |
|
|
|
|
| Foreign tax credit |
|
(6,960) |
|
|
(639)% |
| Other |
|
(1,118) |
|
|
(103)% |
| Changes in valuation allowance |
|
(69,277) |
|
|
(6,364)% |
| Non-taxable or non-deductible items |
|
|
|
|
| Non-deductible expenses related to business combinations |
|
12,128 |
|
|
1,114% |
| Share-based compensation |
|
7,758 |
|
|
713% |
| Other |
|
715 |
|
|
66% |
| Changes in unrecognized tax benefits |
|
8,905 |
|
|
818% |
| Other adjustments |
|
|
|
|
| Preferred enterprise benefits |
|
326 |
|
|
30% |
| Other |
|
(4,722) |
|
|
(434)% |
|
|
|
|
|
| Income tax benefit |
|
$ |
(51,047) |
|
(4690)% |
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 14:- INCOME TAXES (Cont.)
The following table presents a reconciliation of the Company’s theoretical income tax expense (benefit) to its actual income tax expense (benefit) for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2024 |
|
2023 |
|
|
|
|
|
| Income before taxes on income |
|
$ |
151,925 |
|
$ |
37,839 |
|
|
|
|
|
| Statutory tax rate |
|
23% |
|
23% |
|
|
|
|
|
| Theoretical income tax expense |
|
34,943 |
|
|
8,703 |
|
|
|
|
|
|
| Change in valuation allowance |
|
(18,717) |
|
|
9,273 |
|
| Share-based compensation |
|
(740) |
|
|
1,236 |
|
| Non-deductible expenses and other permanent differences |
|
2,146 |
|
|
(8,265) |
|
| Effect of subsidiaries with different tax rates |
|
2,597 |
|
|
4,597 |
|
| Preferred enterprise benefits |
|
(14,881) |
|
|
(7,709) |
|
| Income taxes related to prior years |
|
1,336 |
|
|
(1,001) |
|
| Uncertain tax positions |
|
6,068 |
|
|
(1,587) |
|
| Other |
|
851 |
|
|
(545) |
|
|
|
|
|
|
| Income tax expense |
|
$ |
13,603 |
|
$ |
4,702 |
f.Net operating loss carryforward:
As of December 31, 2025, the Company had carryforward operating losses in Israel totaling $31,500 resulting from the merger of Hour One. These losses are deductible against the Company’s income starting in 2026, subject to an annual limitation equal to the lower of 20% of the total losses or 50% of the Company’s taxable income for the year. In the U.S., the Company had carryforward operating losses of $4,800, of which $3,100 will expire by 2035 and $1,700 can be carried forward indefinitely.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 14:- INCOME TAXES (Cont.)
g.Income taxes paid:
The following table presents cash paid for income taxes, net of refunds received, for the year ended December 31, 2025, pursuant to the disclosure requirements of ASU 2023-09:
|
|
|
|
|
|
|
|
|
|
|
Year ended |
|
|
December 31, 2025 |
|
|
|
| Domestic |
|
$ |
1,322 |
|
| Foreign |
|
|
| United States |
|
832 |
|
| Brazil |
|
367 |
|
| Lithuania |
|
252 |
| Poland |
|
309 |
| Ireland |
|
198 |
| Other |
|
275 |
|
|
|
|
| Cash paid for income taxes, net of refunds received |
|
$ |
3,555 |
|
Cash paid for income taxes, net of refunds, during the years ended December 31, 2024 and 2023 was $11,326 and $12,410, respectively.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 14:- INCOME TAXES (Cont.)
h.The Law for the Encouragement of Capital Investments, 1959 (the "Law"):
The Law for the Encouragement of Capital Investments, 5719-1959, generally referred to as the Investment Law, provides certain incentives for capital investments in production facilities (or other eligible assets). The Investment Law was significantly amended effective as of January 1, 2011, or the 2011 Amendment, and as of January 1, 2017, referred to as Amendment 73. The 2011 Amendment canceled the availability of the benefits granted to companies under the Investment Law prior to 2011 and, instead, introduced new benefits for income generated by a “Preferred Company” through its “Preferred Enterprise” (as such terms are defined in the Investment Law) as of January 1, 2011. A Preferred Company is an industrial company owning a Preferred Enterprise which meets certain conditions (including a minimum threshold of 25% export). However, under this new legislation the requirement for a minimum investment in productive assets was cancelled.
Pursuant to the 2011 Amendment, a Preferred Company is entitled to a reduced corporate tax rate of 16% and 9% in 2014 and thereafter. Dividends paid out of income attributed to a Preferred Enterprise during 2014 and thereafter are generally subject to withholding tax at the rate of 20% or such lower rate as may be provided in an applicable tax treaty. However, if such dividends are paid to an Israeli company, no tax is required to be withheld (however, if afterward distributed to individuals or non-Israeli company a withholding of 20% or such lower rate as may be provided in an applicable tax treaty, will apply).
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 14:- INCOME TAXES (Cont.)
In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2018 and 2019 Budget Years), 2016 which includes Amendment 73 to the Law ("Amendment 73") was published. According to Amendment 73, a preferred enterprise located in development area A will be subject to a tax rate of 7.5% instead of 9% effective from January 1, 2017 and thereafter (the tax rate applicable to preferred enterprises located in other areas remains at 16%).
The new tax tracks under the Amendment are as follows: Preferred Technological Enterprise - an enterprise for which total consolidated revenues of its parent company and all subsidiaries are less than NIS 10 billion. A Preferred Technological Enterprise, as defined in the Law, which is located in the center of Israel will be subject to tax at a rate of 12% on profits deriving from qualifying intellectual property (in development area A - a tax rate of 7.5%). These corporate tax rates shall apply only with respect to the portion of income attributed to the qualifying intellectual property located in Israel.
In 2025, the Company generated taxable income in Israel, and in general, the Company meets the conditions of a “Preferred Technological Enterprise.” Accordingly, the Company’s taxable income in Israel, should to be subject to tax at the rate of 12% (and 7.5% with respect to income attributed to development area A).
i.Tax benefits for research and development:
Israeli tax law (section 20a to the Israeli Tax Ordinance) allows, under certain conditions, a tax deduction for research and development expenses, including capital expenses, for the year in which they are paid. Such expenses must relate to scientific research in industry, agriculture, transportation, or energy, and must be approved by the relevant Israeli government ministry, determined by the field of research. Furthermore, the research and development must be for the promotion of the Company's business and carried out by or on behalf of the company seeking such tax deduction. However, the amount of such deductible expenses is reduced by the sum of any funds received through government grants for the finance of such scientific research and development projects. As for expenses incurred in scientific research that is not approved by the relevant Israeli government ministry, they will be deductible over a three-year period starting from the tax year in which they are paid.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 14:- INCOME TAXES (Cont.)
The Company believes that it is eligible for the above mentioned benefit for the majority of its research and development expenses. For 2025, the Company intends to apply to the Innovation Authority for approval to allow a tax deduction for most or all of the Company’s research and development expenses during the year incurred.
j.Tax reform in the U.S.:
The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21% in 2018, repealed the corporate alternative minimum tax, and requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign-sourced earnings.
The Company calculates an effective rate by computing the effective state tax rate and adding the expected federal statutory rate with a reduction for the federal benefit of the state tax expense.
The Company remeasured all U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 22% (combined federal and state tax rate).
k.Pillar Two:
In December 2021, the Organization for Economic Cooperation and Development ("OECD") released the Pillar Two Model Rules (also referred to as the global minimum tax or Global Anti-Base Erosion ("GloBE") rules), which aim to ensure that multinational enterprises are subject to a minimum level of taxation in each jurisdiction where they operate. The rules establish a global minimum tax rate of 15%, calculated on a jurisdictional basis for companies with revenue exceeding €750 million. Most jurisdictions in which the Company operates have enacted legislation implementing these rules, with an effective date of January 1, 2024. In December 2025, the state of Israel enacted the Minimum Corporate Tax Law for Multinational Groups, aligning with the OECD Pillar Two framework. The law introduced a Qualified Domestic Minimum Top-Up Tax (QDMTT) mechanism, which ensures that profits of multinational group entities are subject to a minimum Effective Tax Rate in Israel. The QDMTT applies from January 1, 2026, to income generated from that date onward. For companies benefiting from tax incentives under the Encouragement of Capital Investments Law, 1959, the QDMTT framework may affect the manner in which such incentives are utilized and presented in the financial statements.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 14:- INCOME TAXES (Cont.)
In particular, certain incentives may not reduce the Effective Tax Rate below the minimum threshold set by the QDMTT for financial reporting purposes. At the same time, a proposed Israeli law has been introduced with the objective of preserving and enhancing Israel’s investment incentives while maintaining compliance with OECD guidelines. The Pillar Two Rules did not have an impact on the Company’s consolidated financial statements for the year ended December 31, 2025. The Company will continue to monitor legislative developments and assess the potential impact on its financial statements.
l.Tax assessments:
In Israel, the Company has final income tax assessments through tax year 2019. In the US, the Company has final federal assessments through the tax year 2020 while 2021 is under an audit by the IRS. Tax years thereafter remain subject to examination by the applicable tax authorities.
m.Uncertain tax positions:
A reconciliation of the opening and closing amounts of total unrecognized tax benefits is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Opening balance |
|
$ |
6,424 |
|
|
$ |
1,802 |
|
|
$ |
3,338 |
|
| Additions based on tax positions related to prior year |
|
2,331 |
|
|
1,764 |
|
|
— |
|
| Additions based on tax positions related to current year |
|
32,078 |
|
|
2,858 |
|
|
886 |
|
| Decreases based on tax positions related to prior year |
|
— |
|
|
— |
|
|
(2,422) |
|
|
|
|
|
|
|
|
| Closing balance |
|
$ |
40,833 |
|
|
$ |
6,424 |
|
|
$ |
1,802 |
|
As of December 31, 2025 and 2024, the closing balance of unrecognized tax benefits is included in other long-term liabilities on the consolidated balance sheet. The Company did not have material accrued interest or penalties related to unrecognized tax benefits for any of the periods presented.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 15:- FINANCIAL INCOME (EXPENSES), NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Bank charges |
|
$ |
(946) |
|
|
$ |
(698) |
|
|
$ |
(628) |
|
| Income (expenses) related to hedging activity |
|
(43,075) |
|
|
6,490 |
|
|
(6,998) |
|
| Amortization of issuance costs |
|
(3,831) |
|
|
(3,166) |
|
|
(4,194) |
|
| Exchange rate gain (loss) |
|
(7,154) |
|
|
4,704 |
|
|
(1,499) |
|
| Net gain (loss) from equity securities |
|
1,090 |
|
|
2,536 |
|
|
30,608 |
|
|
|
|
|
|
|
|
| Total income (expenses) |
|
(53,916) |
|
|
9,866 |
|
|
17,289 |
|
|
|
|
|
|
|
|
| Interest income |
|
48,901 |
|
|
41,954 |
|
|
45,185 |
|
|
|
|
|
|
|
|
| Total financial income (expenses), net |
|
$ |
(5,015) |
|
|
$ |
51,820 |
|
|
$ |
62,474 |
|
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 16:- BASIC AND DILUTED NET INCOME PER SHARE
The following table sets forth the computation of the basic and diluted net income per share for the years ended December 31, 2025, 2024 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
| Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
50,646 |
|
|
$ |
138,322 |
|
|
$ |
33,137 |
|
Add: Interest expense on Convertible Notes (*) |
|
— |
|
|
3,166 |
|
|
— |
|
|
|
|
|
|
|
|
| Net income excluding interest expense on Convertible Notes |
|
$ |
50,646 |
|
|
$ |
141,488 |
|
|
$ |
33,137 |
|
|
|
|
|
|
|
|
| Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic weighted-average shares used to compute net income per share |
|
55,550,762 |
|
55,579,368 |
|
56,829,962 |
|
|
|
|
|
|
|
| Weighted-average effect of dilutive ordinary shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Employee stock options and ESPP shares |
|
1,092,457 |
|
1,513,986 |
|
1,039,744 |
|
| RSUs and PSUs |
|
1,073,373 |
|
1,433,269 |
|
533,331 |
|
| Convertible Notes |
|
— |
|
|
1,426,748 |
|
|
— |
|
|
|
|
|
|
|
|
| Dilutive weighted-average shares used to compute net income per share |
|
57,716,592 |
|
59,953,371 |
|
58,403,037 |
|
|
|
|
|
|
|
| Basic net income per share |
|
$ |
0.91 |
|
|
$ |
2.49 |
|
|
$ |
0.58 |
|
|
|
|
|
|
|
|
| Diluted net income per share |
|
$ |
0.88 |
|
|
$ |
2.36 |
|
|
$ |
0.57 |
|
(*) When the Convertible Notes are dilutive, the associated interest expense, net is added back to net income when calculating diluted net income per share.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 16:- BASIC AND DILUTED NET INCOME PER SHARE (Cont.)
The following potentially dilutive shares were excluded from the diluted income per share calculations for the periods presented because their effect would have been anti-dilutive:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
| Employee stock options and ESPP shares |
|
687,056 |
|
740,329 |
|
2,245,872 |
| RSUs and PSUs |
|
1,185,904 |
|
238,588 |
|
818,288 |
| Convertible Notes |
|
5,463,535 |
|
— |
|
|
1,426,748 |
|
|
|
|
|
|
|
|
|
7,336,495 |
|
978,917 |
|
4,490,908 |
NOTE 17:- SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION
a.Wix is a leading, global, web development platform for millions of creators, delivering its solutions through a SaaS model. The Company generates revenues from Creative Subscriptions and Business Solutions, as disclosed in Note 2(r).
The Company operates in one operating and reportable segment. The Company’s CODM is its Chief Executive Officer, who utilizes consolidated measures of profit or loss to evaluate the Company's overall performance and inform resource allocation decisions. The measure of profit or loss most consistent with GAAP used by the CODM is consolidated net income, as presented in the consolidated statements of comprehensive income. This measure is primarily utilized to assess budget-to-actual variances and to compare against historical performance.
The Company’s significant segment expenses are those presented in the consolidated statements of comprehensive income. No supplemental expense information beyond what is disclosed in these consolidated financial statements is regularly provided to the CODM. The measure of segment assets is total assets, as presented in the consolidated balance sheets.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 17:- SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION (Cont.)
b.The following table presents total revenues by geographic areas, based on the location of the end customer, for the years ended December 31, 2025, 2024 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025 |
|
|
United States |
|
Europe |
|
Israel |
|
Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
1,107,874 |
|
|
$ |
506,861 |
|
|
$ |
17,693 |
|
|
$ |
360,616 |
|
|
$ |
1,993,044 |
|
|
|
|
|
|
|
|
|
|
|
|
| % of total |
|
56% |
|
25% |
|
1% |
|
18% |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2024 |
|
|
United States |
|
Europe |
|
Israel |
|
Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
974,546 |
|
|
$ |
440,521 |
|
|
$ |
13,428 |
|
|
$ |
332,155 |
|
|
$ |
1,760,650 |
|
|
|
|
|
|
|
|
|
|
|
|
| % of total |
|
55% |
|
25% |
|
1% |
|
19% |
|
100% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
|
United States |
|
Europe |
|
Israel |
|
Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
864,475 |
|
|
$ |
380,495 |
|
|
$ |
11,678 |
|
|
$ |
305,017 |
|
|
$ |
1,561,665 |
|
|
|
|
|
|
|
|
|
|
|
|
| % of total |
|
55% |
|
24% |
|
1% |
|
20% |
|
100% |
c.The following table presents long-term assets by geographic area as of December 31, 2025 and 2024, including long-lived assets and property and equipment, net, and excluding intangible assets and deferred tax assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2025 |
|
|
United States |
|
Europe |
|
Israel |
|
Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
| ROU assets |
|
$ |
16,703 |
|
|
$ |
14,799 |
|
|
$ |
366,763 |
|
|
$ |
— |
|
|
$ |
398,265 |
|
| Property and equipment, net |
|
2,136 |
|
|
3,975 |
|
|
108,218 |
|
|
90 |
|
|
114,419 |
|
Other long-term assets (*) |
|
475,053 |
|
|
157 |
|
|
37,667 |
|
|
19 |
|
|
512,896 |
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term assets (*) |
|
$ |
493,892 |
|
|
$ |
18,931 |
|
|
$ |
512,648 |
|
|
$ |
109 |
|
|
$ |
1,025,580 |
|
|
|
|
|
|
|
|
|
|
|
|
| % of total |
|
48% |
|
2% |
|
50% |
|
—% |
|
100% |
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 17:- SEGMENTS, CUSTOMERS AND GEOGRAPHIC INFORMATION (Cont.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2024 |
|
|
United States |
|
Europe |
|
Israel |
|
Other |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
| ROU assets |
|
$ |
8,734 |
|
|
$ |
16,390 |
|
|
$ |
374,737 |
|
|
$ |
— |
|
|
$ |
399,861 |
|
| Property and equipment, net |
|
2,767 |
|
|
4,707 |
|
|
120,615 |
|
|
66 |
|
|
128,155 |
|
Other long-term assets (*) |
|
6,305 |
|
|
77 |
|
|
26,774 |
|
|
— |
|
|
33,156 |
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term assets (*) |
|
$ |
17,806 |
|
|
$ |
21,174 |
|
|
$ |
522,126 |
|
|
$ |
66 |
|
|
$ |
561,172 |
|
|
|
|
|
|
|
|
|
|
|
|
| % of total |
|
3% |
|
4% |
|
93% |
|
—% |
|
100% |
(*) Excluding intangible and deferred tax assets.
NOTE 18:- IMPAIRMENT, RESTRUCTURING AND OTHER COSTS
During the year ended December 31, 2023, the Company implemented and substantially completed significant cost reduction measures (referred to below as the “Plan”), as part of its ongoing focus on operational efficiency and efforts to enhance gross margins, operating leverage, and free cash flow.
Key initiatives taken during 2023 included a workforce reduction of approximately 7%, primarily within the Customer Care function, alongside facility optimization measures to right-size the Company’s office footprint and better align it with its operating needs.
The Company incurred total costs of $32,614 in connection with the Plan during the year ended December 31, 2023, which were included in impairment, restructuring and other costs in the statement of comprehensive income. These costs were comprised of impairment of ROU assets and related leasehold improvements of $25,905, triggered by the Company's decision to cease using and marketing certain leased office facilities for sublease, employee severance costs of $4,504, and other associated costs of $2,205. Cash payments of $6,760 related to the Plan were made during 2023.
|
|
|
|
|
|
|
WIX.COM LTD. AND ITS SUBSIDIARIES |
|
|
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
| U.S. dollars in thousands (except share and per share data) |
|
NOTE 19:- RELATED PARTIES
In September 2025, the Company transferred certain intellectual property and a group of employees to a newly formed Israeli entity. In connection with this transaction, the Company and third-party investors, including a related party of the Company, invested an aggregate amount of approximately $9,250 (of which the Company invested $1,950) in an arm’s-length transaction. Following the transfer and related financing, the Company holds approximately 30% of the entity on a fully diluted basis. The investment is accounted for in the Company’s consolidated financial statements under the equity method of accounting.
NOTE 20:- SUBSEQUENT EVENTS
a.In January 2026, the Board authorized a 2-year repurchase program under which up to a total of $2,000,000 is available to purchase the Company’s ordinary shares and/or Convertible Notes.
b.On March 3, 2026, the Company entered into a Credit Agreement with Hapoalim Bank Ltd. (the “Bank”), which provides a $500,000 credit facility, available to be drawn in up to two tranches between April 1, 2026 and March 31, 2027. Amounts drawn under the facility bear interest at a floating rate based on monthly SOFR plus an funding spread adjustment and a margin of up to 0.40% on the first $400,000 and up to 1.15% on the remaining $100,000. The facility includes certain operating restrictions, financial covenants and collateral, requiring the Company to maintain with the Bank approximately 1 billion NIS in Bank of Israel Bills and a $120,000 cash deposit, and contains standard provisions regarding fees, default interest, and prepayment and cancellation rights.
c.On March 4, 2026, the Company entered into a securities purchase agreement for a private placement with Durable Capital Partners LP and other purchasers, pursuant to which, on March 5, 2026, the Company issued 3,266,699 units for aggregate gross proceeds of $260,000, at a purchase price per unit representing a 5% discount to the closing price of the Company’s ordinary shares on such date. Each unit consists of one ordinary share and a warrant to purchase 0.25 of an ordinary share (the “Warrants”), with an initial exercise price set at a 25% premium to the closing price. In total, the Company issued an aggregate of 3,266,699 ordinary shares and Warrants in respect of 816,674 additional ordinary shares. The Warrants become exercisable on May 5, 2026, and expire on the third anniversary of the closing date. The Warrants include customary anti-dilution adjustments and make-whole fundamental change provisions that may increase the number of shares issuable upon exercise, and may be settled by net share or cash settlement at the Company’s discretion.
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WIX.COM LTD. AND ITS SUBSIDIARIES |
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NOTE 20:- SUBSEQUENT EVENTS (Cont.)
d.On March 5, 2026, the Company commenced a “modified Dutch Auction” tender offer to purchase up to $1,750,000 in aggregate purchase price of its issued and outstanding ordinary shares (or such lesser amount as is properly tendered and not withdrawn). The purchase price will be not greater than $92 nor less than $80 per share, payable in cash, less any applicable withholding taxes and without interest. The tender offer is subject to certain terms and conditions and is scheduled to expire on April 1, 2026, unless extended or terminated.
EX-2.1
2
a20-fxexhibit21x2025.htm
EX-2.1
Document
EXHIBIT 2.1
DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
Wix.com Ltd. (the “Company,” “we,” “us” and “our”) has one class of securities registered pursuant to Section 12(b) of the Exchange Act, the Company’s ordinary shares.
The authorized share capital of the Company is NIS 5,000,000, divided into 500,000,000 ordinary shares with a nominal value of NIS 0.01 per share. The Company may alter its authorized share capital in accordance with the provisions of the Israeli Companies Law, 5759-1999, as amended from time to time, including any regulations promulgated thereunder (the “Companies Law”).
General
Our board of directors may determine the issue prices and terms for our ordinary shares or other securities, and may further determine any other provision relating to such issue of shares or securities. Our ordinary shares are not redeemable and do not have any preemptive rights. All of our ordinary shares have equal rights and are fully paid. Our board of directors may not make calls or assessments on our ordinary shares. Our board of directors is not authorized to issue preferred shares absent an amendment to our articles of association in order to authorize such shares. Such an amendment would require the affirmative vote of the holders of a majority of our outstanding shares entitled to vote at a general meeting.
The description below is a summary of the material provisions of our articles of association and of the Companies Law.
Share Ownership Restrictions
The ownership or voting of ordinary shares by non-residents of Israel is not restricted in any way by our articles of association or the laws of the State of Israel, except that citizens of countries which are in a state of war with Israel may not be recognized as owners of ordinary shares.
Transfer of Shares
Fully paid ordinary shares are issued in registered form and may be freely transferred under our articles of association unless the transfer is restricted or prohibited by another instrument, Israeli law or the rules of a stock exchange on which the shares are traded.
Dividend and Liquidation Rights
Under Israeli law, we may declare and pay a dividend only if, upon the reasonable determination of our board of directors, the distribution will not prevent us from being able to meet the terms of our existing and contingent obligations as they become due. Under the Companies Law, the distribution amount is further limited to the greater of retained earnings or earnings generated over the two most recent years according to our then last reviewed or audited financial statements, provided that the date of the financial statements is not more than six months prior to the date of distribution. In the event that we do not have retained earnings and earnings legally available for distribution, as defined in the Companies Law, we may seek the approval of the court in order to distribute a dividend. The court may approve our request if it is convinced that there is no reasonable concern that the payment of a dividend will prevent us from satisfying our existing and foreseeable obligations as they become due.
In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders of ordinary shares on a pro-rata basis. Dividend and liquidation rights may be affected by the grant of preferential dividend or distribution rights to the holders of a class of shares with preferential rights that may be authorized in the future.
Shareholder Meetings
We are required to convene an annual general meeting of our shareholders once every calendar year, not more than 15 months following the preceding annual general meeting. Our board of directors may convene a special general meeting of our shareholders and is required to do so at the request of a shareholder holding the required percentage under the Companies Law.
Under a recent amendment to the Israeli Companies Regulations (Relief for Companies with Securities Listed for Trading on a Foreign Stock Exchange), 5760-2000 (the “Companies Regulations”) one or more holders of 10% or more of our share capital and 1% of our voting power, or at the request of one or more holders of 10% or more of our voting power may request to convene a special meeting of shareholders .
All shareholder meetings require prior notice of at least 21 days and, in certain cases, 35 days. Shareholders must comply with advance notice provisions to bring business before, or nominate directors for election at, a shareholder meeting.
Under the Companies Regulations, one or more shareholders holding at least 5% of the voting rights in the company may request that the board of directors include a matter in the agenda of a general meeting of shareholders to be convened in the future, provided that it is appropriate to discuss such a matter at the general meeting. If the matter requested to be added to the agenda is to appoint or remove a director, such request must be submitted by one or more shareholders holding at least 10% of the voting rights in the company.
The chairperson of our board of directors, the lead independent director, or another one of our directors authorized by our board of directors presides over our general meetings. If either of such persons is not present within 15 minutes from the appointed time for the commencement of the meeting, the directors present at such meeting shall appoint one of our directors as the chairperson for such meeting and if they fail to do so, then the shareholders present shall appoint one of our directors or office holders to act as chairperson and if any such person refuses to so act or is not present, then one of the shareholders present at such meeting shall act as chairperson. Subject to the provisions of the Companies Law and the regulations promulgated thereunder, shareholders entitled to participate and vote at general meetings are the shareholders of record on a date to be decided by the board of directors, which may be between four and 40 days prior to the date of the meeting, depending on the type of meeting and whether written proxies are being used.
Quorum
The quorum required for a meeting of shareholders consists of at least two shareholders present in person, by proxy or by written ballot, who hold or represent between them at least 25% of our voting power. A meeting adjourned for lack of a quorum generally is adjourned to the same day in the following week at the same time and place (without requirement of additional notification to the shareholders), or to a later time, if indicated in the notice to the meeting or to such other time and place as determined by the board of directors in a notice to our shareholders. At the reconvened meeting, if a quorum is not present within half an hour from the appointed time for the commencement of the meeting, the meeting will take place with whatever number of participants are present, unless the meeting was called pursuant to a request by our shareholders, in which case the quorum required is the number of shareholders required to call the meeting.
Resolutions
Under the Companies Law, unless otherwise provided in the articles of association or applicable law, all resolutions of the shareholders require a simple majority of the voting rights represented at the meeting, in person, by proxy or by written ballot, and voting on the resolution (excluding abstentions).
Voting rights
General
Holders of our ordinary shares have one vote for each ordinary share held on all matters submitted to a vote of shareholders at a shareholder meeting. Shareholders may vote at shareholder meetings either in person, by proxy or by written ballot. Israeli law does not allow public companies to adopt shareholder resolutions by means of written consent in lieu of a shareholder meeting. An amendment to our articles of association generally requires a vote of the holders of a majority of our outstanding ordinary shares entitled to vote at a general meeting of shareholders and voting in person or by proxy at the meeting, and the amendment of a limited number of provisions, such as the provision dividing our directors into three classes, requires a vote of the holders of 662/3% of our outstanding ordinary shares entitled to vote at a general meeting and voting in person or by proxy at the meeting.
Election and Removal of Directors
Our board of directors is divided into three classes with staggered three year terms. Only one class of directors is elected at each annual meeting of our shareholders, with the other classes continuing for the remainder of their respective three-year terms. Our ordinary shares do not have cumulative voting rights for the election of directors. Rather, under our articles of association our directors are elected, upon expiration of the term of office of any director, by the holders of a simple majority of our ordinary shares at a general shareholder meeting (excluding abstentions). As a result, the holders of our ordinary shares that represent more than 50% of the voting power represented at a shareholder meeting and voting thereon (excluding abstentions) have the power to elect any or all of our directors whose positions are being filled at that meeting. Shareholders may only remove a director upon the affirmative vote of the holders of at least 662/3% of the outstanding shares having the right to vote at a general meeting of shareholders and voting in person or by proxy at the meeting.
Vacancies on our board of directors may only be filled by the vote of a simple majority of the directors then in office. A director so appointed will hold office until the annual meeting of our shareholders for the year in which his or her term expires and after his or her successor is duly elected and qualified.
Transactions with Interested Shareholders
Our articles of association contain a provision that prohibits us from engaging in any business combination with any interested shareholder for a period of three years following the date that the shareholder became an interested shareholder, unless:
•prior to that date, the board of directors of the Company approved either the business combination or the transaction that resulted in the shareholder becoming an interested shareholder; or
•upon consummation of the transaction that resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting share of the Company outstanding at the time the transaction commenced, excluding, for purposes of determining the number of shares outstanding, unissued shares of the company which may be issued pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
A “business combination” is defined to include the following:
•any merger or consolidation involving the Company and the interested shareholder;
•any sale, transfer, pledge or other disposition of 10% or more of the assets of the Company involving the interested shareholder;
•subject to certain exceptions, any transaction that results in the issuance or transfer by the Company of any shares of the Company to the interested shareholder;
•any transaction involving the Company that has the effect of increasing the proportionate share of the shares of any class or series of the Company beneficially owned by the interested shareholder; or
•the receipt by the interested shareholder or the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the Company.
An “interested shareholder” is defined as an entity or person beneficially owning 15% or more of the outstanding voting shares of the company and any entity or person affiliated with or controlling or controlled by any of these entities or persons.
This provision may have the effect of preventing, delaying or discouraging coercive takeover practices and inadequate takeover bids. This provision is also designed, in part, to encourage persons seeking to acquire control of our company to negotiate first with our board. We believe that the benefits of increased protection of our potential ability to negotiate more favorable terms with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire our company.
Acquisitions under Israeli Law
Approval of Transactions with Controlling Shareholders
Pursuant to the Companies Law, an extraordinary transaction between a public company and a controlling shareholder, or in which a controlling shareholder has a personal interest, and the terms of any compensation arrangement of a controlling shareholder who is an office holder or his relative, require the approval of a company’s audit committee (or compensation committee with respect to compensation arrangements), board of directors and shareholders, in that order. In addition, the shareholder approval must fulfill one of the following requirements:
•at least a majority of the voting rights in the company held by shareholders who have no personal interest in the transaction and who are present and voting at the general meeting, must be voted in favor of approving the transaction (for this purpose, abstentions are disregarded); or
•the voting rights held by shareholders who have no personal interest in the transaction and who are present and voting at the general meeting, and who vote against the transaction, do not exceed 2% of the voting rights in the company.
To the extent that any such transaction with a controlling shareholder or his relative is for a period extending beyond three years, shareholder approval is required once every three years, unless, in respect to certain transactions, the audit committee determines that the duration of the transaction is reasonable under the circumstances.
Pursuant to regulations adopted under the Companies Law, a transaction with a controlling shareholder that would otherwise require approval of the shareholders is exempt from shareholders’ approval if the audit committee and the board of directors determine that the transaction is on market terms and in the ordinary course of business and does not otherwise harm the company. Under these regulations, a shareholder holding at least 1% of the issued share capital of the company may require, within 14 days of the publication of such determination, that despite such determination by the audit committee and the board of directors, such transaction will require shareholder approval under the same majority requirements that otherwise apply to such transactions.
A controlling shareholder is a shareholder who has the ability to direct the activities of a company, including a shareholder who holds 25% or more of the voting rights if no other shareholder holds more than 50% of the voting rights. For this purpose, the holdings of all shareholders who have a personal interest in the same transaction will be aggregated.
Full Tender Offer
A person wishing to acquire shares of a public Israeli company and who could as a result hold over 90% of the target company’s voting rights or the target company’s issued and outstanding share capital (or of a class thereof), is required by the Companies Law to make a tender offer to all of the company’s shareholders for the purchase of all of the issued and outstanding shares of the company (or the applicable class). If (a) the shareholders who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company (or the applicable class) and the shareholders who accept the offer constitute a majority of the offerees that do not have a personal interest in the acceptance of the tender offer or (b) the shareholders who did not accept the tender offer hold less than 2% of the issued and outstanding share capital of the company (or of the applicable class), all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation of law. A shareholder who had its shares so transferred may petition the court within six months from the date of acceptance of the full tender offer, regardless of whether such shareholder agreed to the offer, to determine whether the tender offer was for less than fair value and whether the fair value should be paid as determined by the court. However, an offeror may provide in the offer that a shareholder who accepted the offer will not be entitled to appraisal rights as described in the preceding sentence, as long as the offeror and the company disclosed the information required by law in connection with the tender offer. If the full tender offer was not accepted in accordance with any of the above alternatives, the acquirer may not acquire shares of the company that will increase its holdings to more than 90% of the company’s issued and outstanding share capital (or of the applicable class) from shareholders who accepted the tender offer.
Special Tender Offer
The Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special tender offer if as a result of the acquisition the purchaser would become a holder of 25% or more of the voting rights in the company. This rule does not apply if there is already another holder of 25% or more of the voting rights in the company. Similarly, the Companies Law provides that an acquisition of shares in a public company must be made by means of a tender offer if as a result of the acquisition the purchaser would become a holder of more than 45% of the voting rights in the company, if there is no other shareholder of the company who holds more than 45% of the voting rights in the company. These requirements do not apply if the acquisition (i) occurs in the context of a private placement by the company that received shareholder approval, (ii) was from a shareholder holding 25% or more of the voting rights in the company and resulted in the acquirer becoming a holder of 25% or more of the voting rights in the company, or (iii) was from a holder of more than 45% of the voting rights in the company and resulted in the acquirer becoming a holder of more than 45% of the voting rights in the company. A special tender offer may be consummated only if (i) at least 5% of the voting power attached to the company’s outstanding shares will be acquired by the offeror and (ii) the number of shares tendered in the offer exceeds the number of shares whose holders objected to the offer (excluding controlling shareholders, holders of 25% or more of the voting rights in the company and any person having a personal interest in the acceptance of the tender offer).
In the event that a special tender offer is made, a company’s board of directors is required to express its opinion on the advisability of the offer, or shall abstain from expressing any opinion if it is unable to do so, provided that it gives the reasons for its abstention. An office holder in a target company who, in his or her capacity as an office holder, performs an action the purpose of which is to cause the failure of an existing or foreseeable special tender offer or is to impair the chances of its acceptance, is liable to the potential purchaser and shareholders for damages, unless such office holder acted in good faith and had reasonable grounds to believe he or she was acting for the benefit of the company. However, office holders of the target company may negotiate with the potential purchaser in order to improve the terms of the special tender offer, and may further negotiate with third parties in order to obtain a competing offer.
If a special tender offer is accepted, then shareholders who did not respond to or that had objected the offer may accept the offer within four days of the last day set for the acceptance of the offer.
In the event that a special tender offer is accepted, then the purchaser or any person or entity controlling it or under common control with the purchaser or such controlling person or entity may not make a subsequent tender offer for the purchase of shares of the target company and may not enter into a merger with the target company for a period of one year from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial special tender offer.
Merger
The Companies Law permits merger transactions if approved by each party’s board of directors and, unless certain conditions described under the Companies Law are met, a majority of each party’s shareholders. The board of directors of a merging company is required pursuant to the Companies Law to discuss and determine in its opinion whether there exists a reasonable concern that as a result of a proposed merger, the surviving company will not be able to satisfy its obligations towards its creditors, such determination taking into account the financial status of the merging companies. If the board of directors determines that such a concern exists, it may not approve a proposed merger. Following the approval of the board of directors of each of the merging companies, the boards of directors must jointly prepare a merger proposal for submission to the Israeli Registrar of Companies.
For purposes of the shareholder vote, unless a court rules otherwise, if one of the merging companies (or any person who holds 25% or more of the outstanding shares or the right to appoint 25% or more of the directors of one of the merging companies) holds shares in the other merging company, the merger will not be deemed approved if a majority of the shares voted at the shareholders meeting by shareholders other than the other party to the merger, or by any person who holds 25% or more of the outstanding shares or the right to appoint 25% or more of the directors of the other party, vote against the merger. In addition, if the non-surviving entity of the merger has more than one class of shares, the merger must be approved by each class of shareholders. If the transaction would have been approved but for the separate approval of each class or the exclusion of the votes of certain shareholders as provided above, a court may still approve the merger upon the request of holders of at least 25% of the voting rights of a company, if the court holds that the merger is fair and reasonable, taking into account the value of the parties to the merger and the consideration offered to the shareholders. If a merger is with a company’s controlling shareholder or if the controlling shareholder has a personal interest in the merger, then the merger is instead subject to the same special majority approval that governs all extraordinary transactions with controlling shareholders as described above.
Under the Companies Law, each merging company must inform its secured creditors of the proposed merger plans. Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes that there exists a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations of any of the parties to the merger, and may further give instructions to secure the rights of creditors.
In addition, a merger may not be completed unless at least 50 days have passed from the date that a proposal for approval of the merger is filed with the Israeli Registrar of Companies and 30 days from the date that shareholder approval of both merging companies is obtained.
Forum For Adjudication of Disputes
Our articles of association provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the United States federal securities laws. Section 22 of the Securities Act of 1933, as amended (the “Securities Act”) creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both U.S. state and federal courts have jurisdiction to entertain such claims. This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may increase the costs associated with such lawsuits, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our Articles inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.
Our articles of association also provide that unless we consent in writing to the selection of an alternative forum, the competent courts in Tel Aviv, Israel shall be the exclusive forum for any action asserting a claim arising pursuant to any provision of the Companies Law or the Israeli Securities Law, 5728-1968, as amended, including, (i) any derivative action or proceeding brought on behalf of the Company, and (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employee of the Company, to the Company or the Company’s shareholders.
Any person or entity purchasing or otherwise acquiring any interest in our share capital shall be deemed to have notice of and to have consented to the choice of forum provisions of our Articles described above.
EX-4.2
3
a20-fxexhibit42x2025.htm
EX-4.2
Document
EXHIBIT 4.2
WIX.COM LTD.
2013 INCENTIVE COMPENSATION PLAN
As amended on July 29, 2025
Wix.com Ltd., an Israeli company (the “Company”), has adopted the Wix.com Ltd. 2013 Incentive Compensation Plan (the “Plan”) for the benefit of non-employee directors of the Company and officers and eligible employees and consultants of the Company and any Affiliates (as each term is defined below), as follows:
ARTICLE I.
ESTABLISHMENT; PURPOSES; AND DURATION
1.1. Establishment of the Plan. The Company hereby establishes this incentive compensation plan to be known as the “Wix.com Ltd. 2013 Incentive Compensation Plan,” as set forth in this document. The Plan permits the grant of Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards, Dividend Equivalents and Cash-Based Awards. The Plan shall become effective upon the date of its adoption by the Board (the “Effective Date”), provided that prior to the IPO Date and within twelve (12) months after the date the Plan is adopted by the Board, the Plan is approved by the holders of a majority of the outstanding Shares which are present and voted at a meeting, or by written consent in lieu of a meeting; provided further that no Award shall be exercisable or vested until such shareholder approval, and if the Plan is not so approved by the Company’s shareholders on or before the last day of such twelve (12)-month period, the Plan and any Awards previously granted shall thereupon be automatically canceled and deemed to have been null and void ab initio. The Plan shall remain in effect as provided in Section 1.3.
1.2. Purposes of the Plan. The purposes of the Plan are to provide additional incentives to non-employee directors of the Company and to those officers, employees and consultants of the Company and Affiliates, whose substantial contributions are essential to the continued growth and success of the business of the Company and the Affiliates, in order to strengthen their commitment to the Company and the Affiliates, and to attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company and to further align the interests of such non-employee directors, officers, employees and consultants with the interests of the shareholders of the Company. To accomplish such purposes, the Plan provides that the Company may grant Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards, Dividend Equivalents and Cash-Based Awards.
1.3. Duration of the Plan. The Plan shall commence on the Effective Date, as described in Section 1.1, and shall remain in effect, subject to the right of the Board of Directors to amend or terminate the Plan at any time pursuant to Article XV, until all Shares subject to it shall have been delivered, and any restrictions on such Shares have lapsed, pursuant to the Plan’s provisions.
ARTICLE II.
DEFINITIONS
Certain terms used herein have the definitions given to them in the first instance in which they are used. In addition, for purposes of the Plan, the following terms are defined as set forth below:
2.1. “Affiliate” means (i) any Subsidiary; (ii) any Person that directly or indirectly controls, is controlled by or is under common control with the Company; and/or (iii) to the extent provided by the Committee, any Person in which the Company has a significant interest. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting or other securities, by contract or otherwise.
2.2. “Applicable Exchange” means the New York Stock Exchange, NASDAQ Stock Market or such other securities exchange as may at the applicable time be the principal market for the Shares.
2.3. “Applicable Law” means any applicable law, rule, regulation, statute, pronouncement, policy, interpretation, judgment, order or decree of any federal, provincial, state or local governmental, regulatory or adjudicative authority or agency, of any jurisdiction, and the rules and regulations of any stock exchange or trading system on which the Shares are then traded or listed.
2.4. “Award” means, individually or collectively, a grant under the Plan of Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Cash-Based Awards, Other Stock-Based Awards and Dividend Equivalents.
2.5. “Award Agreement” means either: (a) a written agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under the Plan, or (b) a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including any amendment or modification thereof. Subject to compliance with Applicable Law, the Committee may provide for the use of electronic, internet or other non-paper Award Agreements, and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant.
2.6. “Beneficial Ownership” (including correlative terms) shall have the meaning given such term in Rule 13d-3 promulgated under the Exchange Act.
2.7. “Board” or “Board of Directors” means the Board of Directors of the Company.
2.8. “Cash-Based Award” means an Award, whose value is determined by the Committee, granted to a Participant, as described in Article XI.
2.9. “Cause” means, unless otherwise provided in an Award Agreement, any of the following: (a) any fraud, embezzlement or felony or similar act by the Participant (whether or not related to Participant’s relationship with the Company or any of its Affiliates); (b) an act of moral turpitude by the Participant, or any act that causes significant injury to the reputation, business, assets, operations or business relationship of the Company or an Affiliate; (c) any breach by the Participant of an agreement between the Company or any Affiliate and the Participant, including, without limitation, breach of confidentiality, non-competition or non-solicitation covenants, or of any duty of the Participant to the Company or any Affiliate thereof; (d) in case of an Employee, performance by an Employee of any act that entitles the Company or an Affiliate (as applicable) to dismiss him without paying him any or partial severance pay in connection with such dismissal under Applicable Law; or (e) any circumstances that constitute grounds for termination for cause as defined under the Participant’s employment, consulting or service agreement with the Company or Affiliate, to the extent applicable.
2.10. “Change of Control” means the occurrence of any of the following:
(a) an acquisition in one transaction or a series of related transactions (other than directly from the Company or pursuant to Awards granted under the Plan or compensatory options or other similar awards granted by the Company) by any Person of any Voting Securities of the Company, immediately after which such Person has Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the Company’s then outstanding Voting Securities; provided, however, that in determining whether a Change of Control has occurred pursuant to this Section 2.10(a), Voting Securities of the Company which are acquired in a Non-Control Acquisition shall not constitute an acquisition that would cause a Change of Control; or
(b) the consummation of any merger, consolidation, recapitalization or reorganization involving the Company unless:
(i) the shareholders of the Company, immediately before such merger, consolidation, recapitalization or reorganization, own, directly or indirectly, immediately following such merger, consolidation, recapitalization or reorganization, more than fifty percent (50%) of the combined voting power of the outstanding Voting Securities of the corporation resulting from such merger or consolidation or reorganization (the “Company Surviving Corporation”) in substantially the same proportion as their ownership of the Voting Securities of the Company immediately before such merger, consolidation, recapitalization or reorganization; and
(ii) the individuals who were members of the Board immediately prior to the execution of the agreement providing for such merger, consolidation, recapitalization or reorganization constitute at least a majority of the members of the board of directors of the Company Surviving Corporation, or a corporation Beneficially Owning, directly or indirectly, a majority of the voting securities of the Company Surviving Corporation, and
(iii) no Person, other than (A) the Company, (B) any Related Entity, (C) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation, recapitalization or reorganization, was maintained by the Company, the Company Surviving Corporation, or any Related Entity or (D) any Person who, together with its Affiliates, immediately prior to such merger, consolidation, recapitalization or reorganization had Beneficial Ownership of fifty percent (50%) or more of the then outstanding Voting Securities of the Company, owns, together with its Affiliates, Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the Company Surviving Corporation’s then outstanding Voting Securities (a transaction described in clauses (b)(i) through (b)(iii) above is referred to herein as a “Non-Control Transaction”); or
(c) any sale, lease, exchange, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets or business of the Company to any Person (other than (A) a transfer or distribution to a Related Entity, or (B) a transfer or distribution to the Company’s shareholders of the stock of a Related Entity or any other assets).
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person (the “Subject Person”) acquired Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the then outstanding Voting Securities of the Company as a result of the acquisition of Voting Securities of the Company by the Company which, by reducing the number of Voting Securities of the Company then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company and (1) before such share acquisition by the Company the Subject Person becomes the Beneficial Owner of any new or additional Voting Securities of the Company in a related transaction or (2) after such share acquisition by the Company the Subject Person becomes the Beneficial Owner of any new or additional Voting Securities of the Company which in either case increases the percentage of the then outstanding Voting Securities of the Company Beneficially Owned by the Subject Person, then a Change of Control shall be deemed to occur.
Solely for purposes of this Section 2.10, (1) “Affiliate” shall mean, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such Person, and (2) “control” (including with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise. Any Relative (for this purpose, “Relative” means a spouse, child, parent, parent of spouse, sibling or grandchild) of an individual shall be deemed to be an Affiliate of such individual for this purpose. None of the Company or any Person controlled by the Company shall be deemed to be an Affiliate of any holder of Shares.
2.11. “Committee” means the Compensation Committee of the Board of Directors or a subcommittee thereof, or such other committee designated by the Board to administer the Plan.
2.12. “Company Surviving Corporation” has the meaning provided in Section 2.10(b)(i).
2.13. “Consultant” means a consultant, advisor or independent contractor who is a natural person and who performs services for the Company or an Affiliate in a capacity other than as an Employee or Director (or who is a personal services company that is wholly owned by such a service provider, or the equivalent thereof, as determined by the Committee in its discretion).
2.14. “Director” means any individual who is a member of the Board of Directors of the Company and/or any Affiliate.
2.15. “Disability” means the inability of a Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months, as determined by a medical doctor satisfactory to the Committee.
2.16. “Disaffiliation” means an Affiliate’s ceasing to be an Affiliate for any reason (including as a result of a public offering, or a spin-off or sale by the Company, of the stock of the Affiliate) or a sale of a division of the Company or an Affiliate.
2.17. “Dividend Equivalents” means the equivalent value (in cash or Shares) of dividends that would otherwise be paid on the Shares subject to an Award but that have not been issued or delivered, as described in Article X.
2.18. “Effective Date” shall have the meaning ascribed to such term in Section 1.1.
2.19. “Employee” means any person designated as an employee of the Company and/or an Affiliate on the payroll records thereof. An Employee shall not include any individual during any period he or she is classified or treated by the Company or an Affiliate as an independent contractor, a consultant, or any employee of an employment, consulting, or temporary agency or any other entity other than the Company and/or an Affiliate without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified as a common-law employee of the Company and/or an Affiliate during such period. For the avoidance of doubt, a Director who would otherwise be an “Employee” within the meaning of this Section 2.19 shall be considered an Employee for purposes of the Plan.
2.20. “Exchange Act” means the Securities Exchange Act of 1934, as it may be amended from time to time, including the rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto.
2.21. “Fair Market Value” means, if the Shares are listed on a national securities exchange, as of any given date, the closing price for a Share on such date on the Applicable Exchange, or if Shares were not traded on the Applicable Exchange on such measurement date, then on the next preceding date on which Shares are traded, all as reported by such source as the Committee may select. If the Shares are not listed on a national securities exchange, Fair Market Value shall be determined by the Committee in good faith. The foregoing to the contrary notwithstanding, the Fair Market Value of a Share on the IPO Date shall be the price to the public as set forth in the final prospectus filed with the SEC pursuant to Rule 424 under the Securities Act with respect to the IPO.
2.22. “Fiscal Year” means the calendar year, or such other consecutive twelve-month period as the Committee may select.
2.23. “Freestanding SAR” means an SAR that is granted independently of any Options, as described in Article VII.
2.24. “Grant Price” means the price established at the time of grant of a SAR pursuant to Article VII, used to determine whether there is any payment due upon exercise of the SAR.
2.25. “Insider” means an individual who is, on the relevant date, an officer, director or ten percent (10%) Beneficial Owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Committee in accordance with Section 16 of the Exchange Act.
2.26. “IPO” means a firm commitment underwritten initial public offering of the Shares under the Securities Act as a result of which the Shares become listed on one or more securities exchanges.
2.27. “IPO Date” means the date of the pricing of the IPO.
2.28. “New Employer” means, after a Change of Control, a Participant’s employer, or any direct or indirect parent or any direct or indirect majority-owned subsidiary of such employer.
2.29. “Non-Control Acquisition” means an acquisition (whether by merger, stock purchase, asset purchase or otherwise) by (a) an employee benefit plan (or a trust forming a part thereof) maintained by (i) the Company or (ii) any corporation or other Person of which fifty percent (50%) or more of its total value or total voting power of its Voting Securities or equity interests is owned, directly or indirectly, by the Company (a “Related Entity”); (b) the Company or any Related Entity; (c) any Person in connection with a Non-Control Transaction; or (d) any Person that owns, together with its Affiliates, Beneficial Ownership of fifty percent (50%) or more of the outstanding Voting Securities of the Company on the Effective Date.
2.30. “Non-Control Transaction” shall have the meaning provided in Section 2.10(b).
2.31. “Non-Employee Director” means a Director who is not an Employee; provided, however, that, “Non-Employee Director” shall also include an investment fund sponsor that (a) both (i) sponsors an investment fund that holds Shares and initially invested in Shares prior to the IPO Date and (ii) employs, or has a partner who is, an individual who serves as a Non-Employee Director (as determined without regard to this proviso), and (b) is approved by the Committee for this purpose (for the avoidance of doubt, any Award granted to a Non-Employee Director within the meaning of this proviso shall be granted for the purposes described in Section 1.2).
2.32. “Notice” means notice provided by a Participant to the Company in a manner prescribed by the Committee.
2.33. “Option” or “Stock Option” means a Stock Option, as described in Article VI.
2.34. “Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option.
2.35. “Other Stock-Based Award” means an equity-based or equity-related Award described in Section 9.1, granted in accordance with the terms and conditions set forth in Article IX.
2.36. “Participant” means any eligible individual as set forth in Article V who holds one or more outstanding Awards.
2.37. “Period of Restriction” means the period of time during which Shares of Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture, or, as applicable, the period of time within which performance is measured for purposes of determining whether such an Award has been earned, and, in the case of Restricted Stock, the transfer of Shares of Restricted Stock is limited in some way, in each case in accordance with Article VIII.
2.38. “Person” means “person” as such term is used for purposes of Section 13(d) or 14(d) of the Exchange Act, including any individual, corporation, limited liability company, partnership, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other entity or any group of persons.
2.39. “Restricted Stock” means an Award granted to a Participant pursuant to Article VIII.
2.40. “Restricted Stock Unit” means an Award, whose value is equal to a Share, granted to a Participant pursuant to Article VIII.
2.41. “Rule 16b-3” means Rule 16b-3 under the Exchange Act, or any successor rule, as the same may be amended from time to time.
2.42. “SEC” means the Securities and Exchange Commission.
2.43. “Securities Act” means the Securities Act of 1933, as it may be amended from time to time, including the rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto.
2.44. “Share” means an Ordinary Share of the Company, par value NIS 0.01 each (including any new, additional or different stock or securities resulting from any change in corporate capitalization as listed in Section 4.3).
2.45. “Stock Appreciation Right” or “SAR” means an Award, granted as a Freestanding SAR or in connection with a related Option (a “Tandem SAR”), designated as an SAR, pursuant to the terms of Article VII.
2.46. “Subject Person” has the meaning provided in Section 2.10.
2.47. “Subplan” means additional incentive compensation plans as may be established by the Board within the parameters and in accordance with the overall terms and provisions of the Plan as may be needed to facilitate local administration of the Plan in any jurisdiction in which the Company or an Affiliate operate in and to conform the Plan to the legal requirements of any such jurisdiction or to allow for favorable tax treatment under any applicable provision of tax law, including, without limitation, Appendix A - Israel, Appendix B – United States, enclosed hereto and other appendices that may be enclosed to this Plan.
2.48. “Subsidiary” means any present or future corporation which is or would be a subsidiary of the Company as determined by the Committee.
2.49. “Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, options or other awards previously granted, or the right or obligation to grant future options or other awards, by a company acquired by the Company and/or an Affiliate or with which the Company and/or an Affiliate combines, or otherwise in connection with any merger, consolidation, acquisition of property or stock, or reorganization involving the Company or an Affiliate.
2.50. “Tandem SAR” means an SAR that is granted in connection with a related Option pursuant to Article VII.
2.51. “Termination” means the termination of the applicable Participant’s employment with, or performance of services for, the Company or any Affiliate under any circumstances, including, without limitation, termination by resignation, discharge, death, disability, and retirement. Unless otherwise determined by the Committee, a Termination shall not be considered to have occurred in the case of: (i) sick leave; (ii) military leave; (iii) any other bona fide leave of absence approved by the Committee; (iv) changes in status from Director to advisory director; (v) transfers between locations of the Company or between or among the Company and/or an Affiliate or Affiliates, including, whenever there was a termination of employment or service of Participant and simultaneous reemployment (or commencement of service or employment) or continuing employment or service of a Participant by the Company or any Affiliate; or (vi) if so determined by the Committee, any change in status between service as an Employee, Director or Consultant if such individual continues to perform bona fide services for the Company or an Affiliate. A Participant employed by, or performing services for, an Affiliate or a division of the Company or of an Affiliate shall be deemed to incur a Termination if, as a result of a Disaffiliation, such Affiliate or division ceases to be an Affiliate or such a division, as the case may be, and the Participant does not immediately thereafter become an employee of, or service provider for, the Company or another Affiliate. The Committee shall have the discretion to determine whether and to what extent the vesting of any Awards shall be tolled during any paid or unpaid leave of absence; provided, however, that, in the absence of such determination, vesting for all Awards shall be tolled during any such unpaid leave (but not for a paid leave).
2.52. “Voting Securities” shall mean, with respect to any Person that is a corporation, all outstanding voting securities of such Person entitled to vote generally in the election of the board of directors of such Person.
ARTICLE III.
ADMINISTRATION
3.1. General. The Committee shall have exclusive authority to operate, manage and administer the Plan including but not limited to authorizing and administering Subplans all in accordance with its terms and conditions. Notwithstanding the foregoing, in its absolute discretion, the Board may at any time and from time to time exercise any and all rights, duties and responsibilities of the Committee under the Plan, including establishing procedures to be followed by the Committee, but excluding matters which under any applicable law, regulation or rule, including any exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3), are required to be determined in the sole discretion of the Committee. If and to the extent that the Committee may not operate in respect of any matter pursuant to Applicable Law, does not exist or cannot function, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee, subject to the limitations set forth in the immediately preceding sentence. Accordingly, in any such case described in the immediately preceding sentence, any reference to the “Committee” shall also refer to the Board.
3.2. Committee. The members of the Committee shall be appointed from time to time by, and shall serve at the discretion of, the Board of Directors.
3.3. Authority of the Committee. The Committee shall have full discretionary authority to grant or, when so restricted by applicable law, recommend the Board to grant, pursuant to the terms of the Plan, Awards to those individuals who are eligible to receive Awards under the Plan. Except as limited by law or by the Articles of Association of the Company, and subject to the provisions herein, the Committee shall have full power, in accordance with the other terms and provisions of the Plan, to:
(a) select Employees, Non-Employee Directors and Consultants who may receive Awards under the Plan and become Participants;
(b) determine eligibility for participation in the Plan and decide all questions concerning eligibility for, and the amount of, Awards under the Plan;
(c) determine the sizes and types of Awards;
(d) determine the terms and conditions of Awards, including the Option Prices of Options and the Grant Prices of SARs;
(e) grant Awards as an alternative to, or as the form of payment for grants or rights earned or payable under, other bonus or compensation plans, arrangements or policies of the Company or an Affiliate;
(f) grant Substitute Awards on such terms and conditions as the Committee may prescribe;
(g) make all determinations under the Plan concerning Termination of any Participant’s employment or service with the Company or an Affiliate, including whether such Termination occurs by reason of cause, disability, retirement or in connection with a Change of Control and whether a leave constitutes a Termination;
(h) determine whether a Change of Control shall have occurred;
(i) construe and interpret the Plan and any agreement or instrument entered into under the Plan, including any Subplan and Award Agreement;
(j) establish and administer any terms, conditions, restrictions, limitations, forfeiture, vesting or exercise schedule, and other provisions of or relating to any Award;
(k) establish and administer any performance goals in connection with any Awards, including performance criteria and applicable performance periods, determine the extent to which any performance goals and/or other terms and conditions of an Award are attained or are not attained;
(l) construe any ambiguous provisions, correct any defects, supply any omissions and reconcile any inconsistencies in the Plan, Subplan and/or any Award Agreement or any other instrument relating to any Awards;
(m) establish, adopt, amend, waive and/or rescind rules, regulations, procedures, guidelines, forms and/or instruments for the Plan’s operation or administration;
(n) make all valuation determinations relating to Awards and the payment or settlement thereof;
(o) grant waivers of terms, conditions, restrictions and limitations under the Plan or applicable to any Award, or accelerate the vesting or exercisability of any Award;
(p) subject to the provisions of Article XV, amend or adjust the terms and conditions of any outstanding Award and/or adjust the number and/or class of shares of stock subject to any outstanding Award;
(q) at any time and from time to time after the granting of an Award, specify such additional terms, conditions and restrictions with respect to such Award as may be deemed necessary or appropriate to ensure compliance with any and all applicable laws or rules, including terms, restrictions and conditions for compliance with applicable securities laws or listing rules, methods of withholding or providing for the payment of required taxes and restrictions regarding a Participant’s ability to exercise Options through a cashless (broker-assisted) exercise;
(r) offer to buy out an Award previously granted, based on such terms and conditions as the Committee shall establish with and communicate to the Participant at the time such offer is made;
(s) determine whether, and to what extent and under what circumstances Awards may be settled in cash, Shares or other property or canceled or suspended;
(t) establish any “blackout” period that the Committee in its sole discretion deems necessary or advisable; and
(u) exercise all such other authorities, take all such other actions and make all such other determinations as it deems necessary or advisable for the proper operation and/or administration of the Plan.
3.4. Award Agreements. The Committee shall, subject to applicable laws and rules, determine the date an Award is granted. Each Award shall be evidenced by an Award Agreement; however, two or more Awards granted to a single Participant may be combined in a single Award Agreement. Unless required by Applicable Law, an Award Agreement shall not be a precondition to the granting of an Award; provided, however, that (a) the Committee may, but need not, require as a condition to any Award Agreement’s effectiveness, that such Award Agreement be executed on behalf of the Company and/or by the Participant to whom the Award evidenced thereby shall have been granted (including by electronic signature or other electronic indication of acceptance), and such executed Award Agreement be delivered to the Company, and (b) no person shall have any rights under any Award unless and until the Participant to whom such Award shall have been granted has complied with the applicable terms and conditions of the Award. The Committee shall prescribe the form of all Award Agreements, and, subject to the terms and conditions of the Plan, shall determine the content of all Award Agreements. Any Award Agreement may be supplemented or amended in writing from time to time as approved by the Committee; provided that the terms and conditions of any such Award Agreement as supplemented or amended are not inconsistent with the provisions of the Plan. In the event of any dispute or discrepancy concerning the terms of an Award, the records of the Committee or its designee shall be determinative.
3.5. Discretionary Authority; Decisions Binding. The Committee shall have full discretionary authority in all matters related to the discharge of its responsibilities and the exercise of its authority under the Plan. All determinations, decisions, actions and interpretations by the Committee with respect to the Plan and any Award Agreement, and all related orders and resolutions of the Committee shall be final, conclusive and binding on all Participants, the Company and its shareholders, any Affiliate and all persons having or claiming to have any right or interest in or under the Plan and/or any Award Agreement. The Committee shall consider such factors as it deems relevant to making or taking such decisions, determinations, actions and interpretations, including the recommendations or advice of any Director or officer or employee of the Company, any director, officer or employee of an Affiliate and such attorneys, consultants and accountants as the Committee may select in its sole and absolute discretion. A Participant or other holder of an Award may contest a decision or action by the Committee with respect to such person or Award only on the grounds that such decision or action was arbitrary or capricious or was unlawful, and any review of such decision or action shall be limited to determining whether the Committee’s decision or action was arbitrary or capricious or was unlawful.
3.6. Attorneys; Consultants. The Committee may consult with counsel who may be counsel to the Company. The Committee may, with the approval of the Board, employ such other attorneys and/or consultants, accountants, appraisers, brokers, agents and other persons, any of whom may be an Employee, as the Committee deems necessary or appropriate. The Committee, the Company and its officers and Directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. The Committee shall not incur any liability for any action taken in good faith in reliance upon the advice of such counsel or other persons.
3.7. Delegation of Administration. Except to the extent prohibited or restricted by applicable law, including any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3), or the applicable rules of a stock exchange, the Committee may, in its discretion, allocate all or any portion of its responsibilities and powers under this Article III to any one or more of its members and/or delegate all or any part of its responsibilities and powers under this Article III to any person or persons selected by it; provided, however, that the Committee may not delegate its authority to correct defects, omissions or inconsistencies in the Plan. Any such authority delegated or allocated by the Committee under this Section 3.7 shall be exercised in accordance with the terms and conditions of the Plan and any rules, regulations or administrative guidelines that may from time to time be established by the Committee, and any such allocation or delegation may be revoked by the Committee at any time.
ARTICLE IV.
SHARES SUBJECT TO THE PLAN
4.1. Number of Shares Available for Issuance. The shares of stock subject to Awards granted under the Plan shall be Shares. Such Shares subject to the Plan may be authorized and unissued shares (which will not be subject to preemptive rights), Shares held in treasury by the Company, Shares purchased on the open market or by private purchase or any combination of the foregoing. Subject to adjustment as provided in Section 4.3, the total number of Shares that may be issued pursuant to Awards under the Plan shall be the amount determined by the Board.
4.2. Rules for Calculating Shares Issued.
(a) Shares underlying Awards (or awards under the Prior Plan (in an amount not to exceed 11,215,356)) that are (x) forfeited (including any Shares subject to an Award (or any such other award) that are repurchased by the Company due to failure to meet any applicable condition), cancelled, terminated or expire unexercised, or (y) settled in cash in lieu of issuance of Shares shall be available for issuance pursuant to future Awards, to the extent that such Shares are forfeited, repurchased or not issued under any such Award.
(b) Any Shares tendered to pay the Option Price of an Option or other purchase price of an Award (or the option price or other purchase price of any option or other award under the Prior Plan), or withholding tax obligations with respect to an Award (or any awards under the Prior Plan), shall be available for issuance pursuant to future Awards.
(c) If any Shares subject to an Award (or any award under the Prior Plan) are not delivered to a Participant because (A) such Shares are withheld to pay the Option Price or other purchase price of such Award (or any award under the Prior Plan), or withholding tax obligations with respect to such Award (or other such award) or (B) a payment upon exercise of a Stock Appreciation Right (or stock appreciation right under the Prior Plan) is made in Shares, the number of Shares subject to the exercised or purchased portion of any such Award that are not delivered to the Participant shall be available for issuance pursuant to future Awards, unless determined otherwise by the Committee.
(d) Any Shares delivered under the Plan upon exercise or satisfaction of Substitute Awards shall not reduce the Shares available for issuance under the Plan.
4.3. Adjustment Provisions. Notwithstanding any other provisions of the Plan to the contrary, in the event of (a) any dividend (excluding any ordinary dividend) or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to acquire Shares or other securities of the Company, or other similar corporate transaction or event (including a Change of Control) that affects the Shares, or (b) any unusual or nonrecurring events (including a Change of Control) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation system, accounting principles or law, such that in either case an adjustment is determined by the Committee in its sole discretion to be necessary or appropriate, then subject to Applicable Law, the Committee shall make any such adjustments in such manner as it may deem equitable, without obtaining Participants' consent, including any or all of the following:
(i) adjusting any or all of (A) the number of Shares or other securities of the Company (or number and kind of other securities or other property) that may be delivered in respect of Awards or with respect to which Awards may be granted under the Plan and (B) the terms of any outstanding Award, including (1) the number of Shares or other securities of the Company (or number and kind of other securities or other property) subject to outstanding Awards or to which outstanding Awards relate, (2) the Option Price or Grant Price with respect to any Award or (3) any applicable performance measures;
(ii) providing for a substitution or assumption of Awards, accelerating the exercisability of, lapse of restrictions (including any Period of Restriction) on, or termination of, Awards or providing for a period of time for exercise prior to the occurrence of such event; and
(iii) cancelling any one or more outstanding Awards and causing to be paid to the holders thereof, in cash, Shares, other securities or other property, or any combination thereof, the value of such Awards, if any, as determined by the Committee (which, if applicable, may be based upon the price per Share received or to be received by other stockholders of the Company in such event, as the Committee shall resolve), including, in the case of an outstanding Option or SAR, a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the Shares subject to such Option or SAR over the aggregate Option Price or Grant Price of such Option or SAR, respectively (it is being understood that, in such event, any Option or SAR having a per share Option Price or Grant Price equal to, or in excess of, the Fair Market Value of a Share may be canceled and terminated without any payment or consideration therefor);
provided, however, that in the case of any “equity restructuring” (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (or any successor pronouncement)), the Committee shall make an equitable or proportionate adjustment to outstanding Awards to reflect such equity restructuring. Any adjustments under this Section 4.3 shall be made in a manner that does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act, to the extent applicable. Any actions or determinations of the Committee under this Section 4.3 need not be uniform as to all outstanding Awards, nor treat all Participants identically. All determinations of the Committee as to adjustments, if any, under this Section 4.3 shall be conclusive and binding for all purposes.
4.4. No Limitation on Corporate Actions. The existence of the Plan and any Awards granted hereunder shall not affect in any way the right or power of the Company or any Affiliate to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or business structure, any merger or consolidation, any issuance of debt, preferred or prior preference stock ahead of or affecting the Shares, additional shares of capital stock or other securities or subscription rights thereto, any dissolution or liquidation, any sale or transfer of all or part of its assets or business or any other corporate act or proceeding (including Change of Control).
ARTICLE V.
ELIGIBILITY AND PARTICIPATION
5.1. Eligibility. Employees, Non-Employee Directors and Consultants shall be eligible to become Participants and receive Awards in accordance with the terms and conditions of the Plan.
5.2. Actual Participation. Subject to the provisions of the Plan, the Committee may, from time to time, select Participants from all eligible Employees, Non-Employee Directors and Consultants and shall determine the nature and amount of each Award.
ARTICLE VI.
STOCK OPTIONS
6.1. Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee. The Committee may grant an Option or provide for the grant of an Option, either from time to time in the discretion of the Committee or automatically upon the occurrence of specified events, including the achievement of performance goals, the satisfaction of an event or condition within the control of the recipient of the Option or within the control of others. The granting of an Option shall take place when the Committee (or its designee) by resolution, written consent or other appropriate action determines to grant such Option for a particular number of Shares to a particular Participant at a particular Option Price, or such later date as the Committee (or such designee) shall provide in such resolution, consent or action.
6.2. Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the maximum duration of the Option, the number of Shares to which the Option pertains, the conditions upon which the Option shall become exercisable and such other provisions as the Committee shall determine, which are not inconsistent with the terms of the Plan.
6.3. Option Price. The Option Price for each Option shall be determined by the Committee and set forth in the Award Agreement.
6.4. Duration of Options. Each Option granted to a Participant shall expire at such time as the Committee shall determine at the time of grant and set forth in the Award Agreement; provided, however, that no Option shall be exercisable later than the tenth (10th) anniversary of its grant date.
6.5. Exercise of Options. Options shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance determine and set forth herein and in the Award Agreement, including, without limitation vesting of the Options pursuant to Section 13.3 herein, which need not be the same for each grant or for each Option or Participant. The period of time over which an Option may be exercised may be extended by the Committee in its sole discretion, if on the scheduled expiration date or termination date (other than due to Termination for Cause) of such Option the Participant’s exercise of such Option would violate an Applicable Law; provided, however, that during such extended exercise period the Option may only be exercised to the extent the Option was exercisable in accordance with its terms immediately prior to such scheduled expiration date; provided further, however, that such extended exercise period shall end not later than thirty (30) days after the exercise of such Option first would no longer violate such law.
6.6. Payment. Options shall be exercised by the delivery of a written notice of exercise to the Company, in a form specified or accepted by the Committee, or by complying with any alternative exercise procedures that may be authorized by the Committee, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for such Shares, which shall include applicable taxes, if any, in accordance with Article XVI. The Option Price upon exercise of any Option shall be payable to the Company in full by certified or bank check or such other instrument as the Committee may accept. If approved by the Committee in its sole discretion, and subject to any such terms, conditions and limitations as the Committee may prescribe and to the extent permitted by Applicable Law, payment of the Option Price, in full or in part, may also be made as follows:
(a) Payment may be made in the form of unrestricted and unencumbered Shares (by actual delivery of such Shares or by attestation) already owned by the Participant exercising such Option, or by such Participant and his or her spouse jointly (based on the Fair Market Value of the Shares on the date the Option is exercised), provided that such already owned Shares must have been either previously acquired by the Participant on the open market or held by the Participant for at least six (6) months at the time of exercise (or meet any such other requirements as the Committee may determine are necessary in order to avoid an accounting earnings charge on account of the use of such Shares to pay the Option Price).
(b) Payment may be made by delivering a properly executed exercise notice to the Company, together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds necessary to pay the Option Price, and, if requested, the amount of any federal, state, local or non-United States withholding taxes. To facilitate the foregoing, the Company may, to the extent permitted by applicable law, enter into agreements for coordinated procedures with one or more brokerage firms.
(c) Payment may be made by instructing the Committee to withhold a number of Shares otherwise deliverable to the Participant pursuant to the Option having an aggregate Fair Market Value on the date of exercise equal to the product of: (i) Option Price multiplied by (ii) the number of Shares in respect of which the Option shall have been exercised.
(d) Payment may be made by a method whereby the Committee shall withhold a number of Shares otherwise deliverable to the Participant pursuant to the Option (in this Section 6.6(d) "Cashless Exercise"), according to the following formula:
N = X(A-B)/A
Where:
“N” = the calculated number of Shares to be issued to the Participant upon exercise of the Option after rounding to the nearest whole number;
“X” = the number of Shares with respect to which the Option is exercised, according to the Participant's notice of exercise;
“A” = Fair Market Value of one (1) Share on the date of exercise.
“B” = the exercise price per Share (as defined in the Participant’s applicable Award Agreement).
(e) In respect of Participants who are not subject to taxation in the United States, payment may be made by a method whereby the Committee shall withhold a number of Shares otherwise deliverable to the Participant pursuant to the Option (in this Section 6.6(e) "Cashless Exercise"), according to the following formula:
N = X(A-B)/A
Where:
“N” = the calculated number of Shares to be issued to the Participant upon exercise of the Option after rounding to the nearest whole number;
“X” = the number of Shares with respect to which the Option is exercised, according to the Participant's notice of exercise;
“A” = the higher between: (1) the closing price for a Share on the last trading day prior to the exercise date or (2) the limit price that the Participant has indicated when submitted the same-day sale instructions to a broker.
“B” = the exercise price per Share (as defined in the Participant’s applicable Award Agreement).
(f) Payment may be made by any other method approved or accepted by the Committee in its discretion.
Subject to any governing rules or regulations, as soon as practicable after receipt of a written notification of exercise and full payment in accordance with the preceding provisions of this Section 6.6 and satisfaction of tax obligations in accordance with Article XVI, the Company shall deliver to the Participant exercising an Option, in the Participant’s name, evidence of book entry Shares, or, upon the Participant’s request, Share certificates, in an appropriate amount based upon the number of Shares purchased under the Option, subject to Section 18.9. Unless otherwise determined by the Committee, all payments under all of the methods described above shall be paid in United States dollars.
6.7. Rights as a Shareholder. No Participant or other person shall become the beneficial owner of any Shares subject to an Option, nor have any rights to dividends or other rights of a shareholder with respect to any such Shares, until the Participant has actually received such Shares following exercise of his or her Option in accordance with the provisions of the Plan and the applicable Award Agreement.
6.8. Termination of Employment or Service. Except as otherwise provided in Section 6.5 and this Section 6.8 or in the applicable Award Agreement, an Option may be exercised only to the extent that it is then exercisable, and if at all times during the period beginning with the date of granting of such Option and ending on the date of exercise of such Option the Participant is an Employee, Non-Employee Director or Consultant. An Option shall cease to become exercisable upon a Termination of the holder thereof. Notwithstanding the foregoing provisions of this Section 6.8 to the contrary, unless earlier terminated in accordance with an Option’s terms, following any such Termination of a Participant, his or her the vested Option shall be exercisable as follows, provided, however, that in no event may an Option be exercised after the expiration date of such Option specified in the applicable Award Agreement, except as otherwise provided by Section 6.6:
(a) In the event that such Termination is under any circumstances other than for Cause or by reason of death or Disability, all Options of such Participant that are vested and exercisable at the time of such Termination may, unless earlier terminated in accordance with their terms, be exercised within up to ninety (90) days after the effective date of such Termination, or such different period as the Committee may prescribe.
(b) Notwithstanding any other provision herein to the contrary, if such Termination is for Cause or if, whether or not such Termination is by either party, circumstances arise or are discovered with respect to the Participant that would have constituted Cause for Termination of such Participant, all Options theretofore granted to such Participant (whether vested or not) shall, to the extent not theretofore exercised, terminate as of the effective date of such Termination, unless otherwise determined by the Committee in its discretion that an Option.
(c) In the event that (1) a Participant dies while employed by, or performing service for, the Company or an Affiliate, or a Participant dies within any period after such Participant's Termination, or (2) the Participant shall Terminate by reason of Disability, then all Options
theretofore granted to such Participant that are then outstanding under Section 6.8(a) and vested but unexercised may be exercised by the Participant or, in case of death, by the Participant's beneficiary designated in accordance with Section 12.2, or, if none, then by the Participant’s estate or by a person who acquired the right to exercise such Options by bequest or inheritance or otherwise by result of death of the Participant, at any time within twelve (12) months after the date of such death or Disability (or such different period as the Committee may prescribe in its discretion).
ARTICLE VII.
STOCK APPRECIATION RIGHTS
7.1. Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be granted to Participants at any time and from time to time as shall be determined by the Committee. The Committee may grant an SAR (a) in connection and simultaneously with the grant of an Option (a Tandem SAR) or (b) independent of, and unrelated to, an Option (a Freestanding SAR). The Committee shall have complete discretion in determining the number of Shares to which an SAR pertains (subject to Article IV) and, consistent with the provisions of the Plan, in determining the terms and conditions pertaining to any SAR.
7.2. Grant Price. The Grant Price for each SAR shall be determined by the Committee and set forth in the Award Agreement. The Grant Price of a Tandem SAR shall be equal to the Option Price of the related Option.
7.3. Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option. A Tandem SAR shall be exercisable only when and to the extent the related Option is exercisable and may be exercised only with respect to the Shares for which the related Option is then exercisable. A Tandem SAR shall entitle a Participant to elect, in the manner set forth in the Plan and the applicable Award Agreement, in lieu of exercising his or her unexercised related Option for all or a portion of the Shares for which such Option is then exercisable pursuant to its terms, to surrender such Option to the Company with respect to any or all of such Shares and to receive from the Company in exchange therefor a payment described in Section 7.7. An Option with respect to which a Participant has elected to exercise a Tandem SAR shall, to the extent of the Shares covered by such exercise, be canceled automatically and surrendered to the Company. Such Option shall thereafter remain exercisable according to its terms only with respect to the number of Shares as to which it would otherwise be exercisable, less the number of Shares with respect to which such Tandem SAR has been so exercised.
7.4. Exercise of Freestanding SARs. Freestanding SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, in accordance with the Plan, including vesting under Section 13.3, determines and sets forth in the Award Agreement. An Agreement may provide that the period of time over which a Freestanding SAR may be exercised may be extended by the Committee if on the scheduled expiration date of such SAR the Participant’s exercise of such SAR would violate an applicable law; provided, however, that during such extended exercise period the SAR may only be exercised to the extent the SAR was exercisable in accordance with its terms immediately prior to such scheduled expiration date; provided further, however, that such extended exercise period shall end not later than thirty (30) days after the exercise of such SAR first would no longer violate such law.
7.5. Award Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall specify the number of Shares to which the SAR pertains, the Grant Price, the term of the SAR, and such other terms and conditions as the Committee shall determine in accordance with the Plan.
7.6. Term of SARs. The term of an SAR granted under the Plan shall be determined by the Committee and set forth in the Award Agreement; provided, however, that the term of any Tandem SAR shall be the same as the related Option; provided further, however, that no Freestanding SAR shall be exercisable later than the tenth (10th) anniversary of its grant date.
7.7. Payment of SAR Amount. An election to exercise SARs shall be deemed to have been made on the date of Notice of such election to the Company. Upon exercise of an SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying:
(a) The excess of the Fair Market Value of a Share on the date of exercise over the Grant Price of the SAR; by
(b) The number of Shares with respect to which the SAR is exercised.
Notwithstanding the foregoing provisions of this Section 7.7 to the contrary, the Committee may establish and set forth in the applicable Award Agreement a maximum amount per Share that will be payable upon the exercise of an SAR. At the discretion of the Committee, such payment upon exercise of an SAR shall be in cash, in Shares of equivalent Fair Market Value, or in some combination thereof.
7.8. Rights as a Shareholder. A Participant receiving an SAR shall have the rights of a Shareholder only as to Shares, if any, actually issued to such Participant upon satisfaction or achievement of the terms and conditions of the Award, and in accordance with the provisions of the Plan and the applicable Award Agreement, and not with respect to Shares to which such Award relates but which are not actually issued to such Participant.
7.9. Termination of Employment or Service. Except as otherwise provided by Section 6.5 (in the case of Tandem SARs) or in Section 7.4 (in the case of Freestanding SARs) or in the applicable Award Agreement, a SAR may be exercised only to the extent that it is then vested and exercisable, and if at all times during the period beginning with the date of granting of such SAR and ending on the date of exercise of such SAR the Participant is an Employee, Non-Employee Director or Consultant. A SAR shall cease to become exercisable upon a Termination of the holder thereof. Notwithstanding the foregoing provisions of this Section 7.9 to the contrary, unless earlier terminated in accordance with the its terms, the SAR may be exercised after Termination in accordance with the provisions of Section 6.8 above; provided, however, that in no event may a SAR be exercised after the expiration date of such SAR specified in the applicable Award Agreement, except as provided in Section 6.5 (in the case of Tandem SARs) or in Section 7.4 (in the case of Freestanding SARs).
ARTICLE VIII.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
8.1. Awards of Restricted Stock and Restricted Stock Units. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock and/or Restricted Stock Units to Participants in such amounts as the Committee shall determine. Awards of Restricted Stock may be made with or without the requirement of a cash payment from the Participant to whom such Award is made in exchange for, or as a condition precedent to, the completion of such Award and the issuance of Shares of Restricted Stock, and any such required cash payment shall be set forth in the applicable Award Agreement. Subject to the terms and conditions of this Article VIII and the Award Agreement, upon delivery of Shares of Restricted Stock to a Participant, or creation of a book entry evidencing a Participant’s ownership of Shares of Restricted Stock, pursuant to Section 8.6, the Participant shall have all of the rights of a shareholder with respect to such Shares, subject to the terms and restrictions set forth in this Article VIII or the applicable Award Agreement or as determined by the Committee.
8.2. Award Agreement. Each Restricted Stock and/or Restricted Stock Unit Award shall be evidenced by an Award Agreement that shall specify the Period of Restriction, the number of Shares of Restricted Stock or the number of Restricted Stock Units granted, and such other provisions as the Committee shall determine in accordance with the Plan.
8.3. Nontransferability of Restricted Stock. Except as provided in this Article VIII, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, encumbered, alienated, hypothecated or otherwise disposed of until the end of the applicable Period of Restriction established by the Committee and specified in the Restricted Stock Award Agreement.
8.4. Period of Restriction and Other Restrictions. The Period of Restriction applicable to an Award of Restricted Stock or Restricted Stock Units shall lapse based on a Participant’s continuing service or employment with the Company or an Affiliate, the achievement of performance goals, the satisfaction of other conditions or restrictions or upon the occurrence of other events, in each case, as determined by the Committee, at its discretion, and stated in the Award Agreement.
8.5. Delivery of Shares and Settlement of Restricted Stock Units. Upon the expiration of the Period of Restriction with respect to any Shares of Restricted Stock, the restrictions set forth in the applicable Award Agreement shall be of no further force or effect with respect to such Shares, except as set forth in such Award Agreement. If applicable stock certificates are held by the Secretary of the Company or an escrow holder, upon such expiration, the Company shall deliver to the Participant, his beneficiary or trustee (as applicable), without charge, the stock certificate evidencing the Shares of Restricted Stock that have not then been forfeited and with respect to which the Period of Restriction has expired. Unless otherwise provided by the Committee in an Award Agreement, upon the expiration of the Period of Restriction with respect to any outstanding Restricted Stock Units, the Company shall deliver to the Participant, or his beneficiary or trustee (as applicable), without charge, one Share for each such outstanding Restricted Stock Unit; provided, however, that the Committee may, in its discretion, elect to (i) pay cash or part cash and part Shares in lieu of delivering only Shares in respect of such Restricted Stock Units or (ii) defer the delivery of Shares beyond the expiration of the Period of Restriction. If a cash payment is made in lieu of delivering Shares, the amount of such payment shall be equal to the Fair Market Value of such Shares as of the date on which the Period of Restriction lapsed with respect to such Restricted Stock Units, less applicable tax withholdings in accordance with Article XVI.
8.6. Forms of Restricted Stock Awards. Each Participant who receives an Award of Shares of Restricted Stock shall be issued a stock certificate or certificates evidencing the Shares covered by such Award registered in the name of such Participant or its trustee (as the case may be), which certificate or certificates shall bear an appropriate legend, and, if the Committee determines that the Shares of Restricted Stock shall be held by the Company or in escrow rather than delivered to the Participant or its trustee pending expiration of the Period of Restriction, the Committee may require the Participant to additionally execute and deliver to the Company: (i) an escrow agreement satisfactory to the Committee, if applicable, and (ii) an appropriate stock power (endorsed in blank) with respect to such Shares of Restricted Stock. The Committee may require a Participant who receives a certificate or certificates evidencing a Restricted Stock Award to immediately deposit such certificate or certificates, together with a stock power or other appropriate instrument of transfer, endorsed in blank by the Participant, with signatures guaranteed in accordance with the Exchange Act if required by the Committee, with the Secretary of the Company or an escrow holder as provided in the immediately following sentence. The Secretary of the Company or such escrow holder as the Committee may appoint shall retain physical custody of each certificate representing a Restricted Stock Award until the Period of Restriction and any other restrictions imposed by the Committee or under the Award Agreement with respect to the Shares evidenced by such certificate expire or shall have been removed. The foregoing to the contrary notwithstanding, the Committee may, in its discretion, provide that a Participant’s ownership of Shares of Restricted Stock prior to the lapse of the Period of Restriction or any other applicable restrictions shall, in lieu of such certificates, be evidenced by a “book entry” (i.e., a computerized or manual entry) in the records of the Company or its designated agent in the name of the Participant or its trustee (as the case may be) who has received such Award. Such records of the Company or such agent shall, absent manifest error, be binding on all Participants who receive Restricted Stock Awards evidenced in such manner. The holding of Shares of Restricted Stock by the Company or such an escrow holder, or the use of book entries to evidence the ownership of Shares of Restricted Stock, in accordance with this Section 8.6, shall not affect the rights of Participants as owners or beneficial owners of the Shares of Restricted Stock awarded to them, nor affect the restrictions applicable to such Shares under the Award Agreement or the Plan, including the Period of Restriction.
8.7. Rights as a Shareholder.
(a) Restricted Stock. Participants holding Shares of Restricted Stock shall have all rights of a shareholder as to such Shares immediately upon issuance of such Shares, subject to the terms and conditions of the Plan, the applicable Award Agreement and the Company's Articles of Association; provided, however, that during the Period of Restriction, the Committee may apply any restrictions to any cash dividends otherwise payable with respect to such Shares while they are so held as the Committee deems appropriate. Except as set forth in the Award Agreement and subject to Applicable Law, in the event of (A) any adjustment as provided in Section 4.3, or (B) any shares or securities are received as a dividend, or an extraordinary dividend is paid in cash, on Shares of Restricted Stock, any new or additional Shares or securities or any extraordinary dividends paid in cash received by a recipient of Restricted Stock shall be subject to the same terms and conditions, including the Period of Restriction, as relate to the original Shares of Restricted Stock.
(b) Restricted Stock Units. A Participant receiving Restricted Stock Units shall have the rights of a shareholder only as to Shares, if any, actually issued to such Participant upon expiration of the Period of Restriction and satisfaction or achievement of the terms and conditions of the Award, and in accordance with the provisions of the Plan and the applicable Award Agreement, and not with respect to Shares to which such Award relates but which are not actually issued to such Participant.
8.8. Termination of Employment or Service. Except as otherwise provided in this Section 8.8, during the Period of Restriction, any Restricted Stock Units and/or Shares of Restricted Stock held by a Participant or its trustee (as applicable) that are subject to such Period of Restriction shall be forfeited and revert to the Company (or, if Shares of Restricted Stock were sold to the Participant, the Participant shall be required to resell such Shares to the Company at cost) upon the Participant’s Termination or the failure to meet or satisfy any applicable performance goals, vesting terms or other terms, conditions and restrictions to the extent set forth in the applicable Award Agreement. Each applicable Award Agreement shall set forth the extent to which, if any, the Participant shall have the right to retain Restricted Stock Units and/or Shares of Restricted Stock, then subject to the Period of Restriction, following such Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for, or circumstances of, such Termination.
ARTICLE IX.
OTHER STOCK-BASED AWARDS
9.1. Other Stock-Based Awards. The Committee may grant types of equity-based or equity-related Awards not otherwise described by the terms of the Plan (including the grant or offer for sale of unrestricted Shares), in such amounts and subject to such terms and conditions, as the Committee shall determine. Such Other Stock-Based Awards may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares. The terms and conditions of such Awards shall be consistent with the Plan and set forth in the Award Agreement and need not be uniform among all such Awards or all Participants receiving such Awards.
9.2. Value of Other Stock-Based Awards. Each Other Stock-Based Award shall be expressed in terms of Shares or units based on Shares, as determined by the Committee. The Committee may establish performance goals in its discretion, and any such performance goals shall be set forth in the applicable Award Agreement. If the Committee exercises its discretion to establish performance goals, the number and/or value of Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which such performance goals are met.
9.3. Payment of Other Stock-Based Awards. Payment, if any, with respect to an Other Stock-Based Award shall be made in accordance with the terms of the Award, as set forth in the Award Agreement, in cash, Shares or a combination of cash and Shares, as the Committee determines.
9.4. Rights as a Shareholder. A Participant receiving an Other Stock-Based Award shall have the rights of a shareholder only as to Shares, if any, actually issued to such Participant upon satisfaction or achievement of the terms and conditions of the Award, and in accordance with the provisions of the Plan and the applicable Award Agreement, and not with respect to Shares to which such Award relates but which are not actually issued to such Participant.
9.5. Termination of Employment or Service. The Committee shall determine the extent to which the Participant shall have the right to receive Other Stock-Based Awards following the Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, such provisions may be included in the applicable Award Agreement, but need not be uniform among all Other Stock-Based Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for Termination.
ARTICLE X.
DIVIDEND EQUIVALENTS
Unless otherwise provided by the Committee, no adjustment shall be made in the Shares issuable or taken into account under Awards on account of cash dividends that may be paid or other rights that may be issued to the holders of Shares prior to issuance of such Shares under such Award. The Committee may grant Dividend Equivalents based on the dividends declared on Shares that are subject to any Award, including any Award the payment or settlement of which is deferred pursuant to Section 18.5. Any Award of Dividend Equivalents may be credited as of the dividend payment dates, during the period between the Grant Date of the Award and the date the Award becomes payable or terminates or expires, as determined by the Committee. Dividend Equivalents may be subject to any limitations and/or restrictions determined by the Committee. Dividend Equivalents shall be converted to cash or additional Shares by such formula and at such time, and shall be paid at such times, as may be determined by the Committee.
ARTICLE XI.
CASH-BASED AWARDS
11.1. Grant of Cash-Based Awards. Subject to the terms of the Plan, Cash-Based Awards may be granted to Participants in such amounts and upon such terms, and at any time and from time to time, as shall be determined by the Committee, in accordance with the Plan. A Cash-Based Award entitles the Participant who receives such Award to receive a payment in cash upon the attainment of applicable performance goals for the applicable performance period, and/or satisfaction of other terms and conditions, in each case determined by the Committee, and which shall be set forth in the Award Agreement. The terms and conditions of such Awards shall be consistent with the Plan and set forth in the Award Agreement and need not be uniform among all such Awards or all Participants receiving such Awards.
11.2. Earning and Payment of Cash-Based Awards. Cash-Based Awards shall become earned, in whole or in part, based upon the attainment of performance goals specified by the Committee and/or the occurrence of any event or events and/or satisfaction of such terms and conditions, including a Change of Control, as the Committee shall determine, either at or after the Grant Date. The Committee shall determine the extent to which any applicable performance goals and/or other terms and conditions of a Cash-Based Award are attained or not attained following conclusion of the applicable performance period. The Committee may, in its discretion, waive any such performance goals and/or other terms and conditions relating to any such Award. Payment of earned Cash-Based Awards shall be as determined by the Committee and set forth in the Award Agreement.
11.3. Termination of Employment or Service. Each Award Agreement shall set forth the extent to which the Participant shall have the right to retain Cash-Based Award following such Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for Termination.
ARTICLE XII.
TRANSFERABILITY OF AWARDS; BENEFICIARY DESIGNATION
12.1. Transferability of Awards. Except as otherwise provided in Section 8.6 or Section 12.2 or a Participant’s Award Agreement or otherwise determined at any time by the Committee, no Award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution; provided that the Committee may permit further transferability, on a general or a specific basis, and may impose conditions and limitations on any permitted transferability, subject to any applicable Period of Restriction. Further, except as otherwise provided in a Participant’s Award Agreement or otherwise determined at any time by the Committee, or unless the Committee decides to permit further transferability, subject any applicable Period of Restriction, all Awards granted to a Participant under the Plan, and all rights with respect to such Awards, shall be exercisable or available during his or her lifetime only by or to such Participant. With respect to those Awards, if any, that are permitted to be transferred to another Person, references in the Plan to exercise or payment related to such Awards by or to the Participant shall be deemed to include, as determined by the Committee, the Participant’s permitted transferee. In the event any Award is exercised by or otherwise paid to the executors, administrators, heirs or distributees of the estate of a deceased Participant, or such a Participant’s beneficiary, or the transferee of an Award, in any such case, pursuant to the terms and conditions of the Plan and the applicable Agreement and in accordance with such terms and conditions as may be specified from time to time by the Committee, the Company shall be under no obligation to issue Shares thereunder unless and until the Company is satisfied, as determined in the discretion of the Committee, that the person or persons exercising such Award, or to receive such payment, are the duly appointed legal representative of the deceased Participant’s estate or the proper legatees or distributees thereof or the named beneficiary of such Participant, or the valid transferee of such Award, as applicable. Any purported assignment, transfer or encumbrance of an Award that does not comply with this Section 12.1 shall be void and unenforceable against the Company.
12.1. Beneficiary Designation. Each Participant may, from time to time, name any beneficiary or beneficiaries who shall be permitted to exercise his or her Option or SAR or to whom any benefit under the Plan is to be paid in case of the Participant’s death before he or she fully exercises his or her Option or SAR or receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such beneficiary designation, a Participant’s unexercised Option or SAR, or amounts due but remaining unpaid to such Participant, at the Participant’s death, shall be exercised or paid as designated by the Participant by will or by the laws of descent and distribution.
ARTICLE XIII.
RIGHTS OF PARTICIPANTS
13.1. Rights or Claims. No person shall have any rights or claims under the Plan except in accordance with the provisions of the Plan and any applicable Award Agreement. The liability of the Company and any Affiliate under the Plan is limited to the obligations expressly set forth in the Plan, and no term or provision of the Plan may be construed to impose any further or additional duties, obligations, or costs on the Company or any Affiliate thereof or the Board or the Committee not expressly set forth in the Plan. The grant of an Award under the Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in the Plan as being applicable to such type of Award, or to all Awards, or as are expressly set forth in the Award Agreement evidencing such Award. Without limiting the generality of the foregoing, neither the existence of the Plan nor anything contained in the Plan or in any Award Agreement shall be deemed to:
(a) Give any Employee or Non-Employee Director the right to be retained in the service of the Company and/or an Affiliate, whether in any particular position, at any particular rate of compensation, for any particular period of time or otherwise;
(b) Restrict in any way the right of the Company and/or an Affiliate to terminate, change or modify any Employee’s employment or any Non-Employee Director’s service as a Director at any time with or without cause;
(c) Confer on any Consultant any right of continued relationship with the Company and/or an Affiliate, or alter any relationship between them, including any right of the Company or an Affiliate to terminate, change or modify its relationship with a Consultant;
(d) Constitute a contract of employment or service between the Company or any Affiliate and any Employee, Non-Employee Director or Consultant, nor shall it constitute a right to remain in the employ or service of the Company or any Affiliate;
(e) Give any Employee, Non-Employee Director or Consultant the right to receive any bonus, whether payable in cash or in Shares, or in any combination thereof, from the Company and/or an Affiliate, nor be construed as limiting in any way the right of the Company and/or an Affiliate to determine, in its sole discretion, whether or not it shall pay any Employee, Non-Employee Director or Consultant bonuses, and, if so paid, the amount thereof and the manner of such payment; or
(f) Give any Participant any rights whatsoever with respect to an Award except as specifically provided in the Plan and the Award Agreement.
13.2. Adoption of the Plan. The adoption of the Plan shall not be deemed to give any Employee, Non-Employee Director or Consultant or any other individual any right to be selected as a Participant or to be granted an Award, or, having been so selected, to be selected to receive a future Award.
13.3. Vesting. Notwithstanding any other provision of the Plan, a Participant’s right or entitlement to exercise or otherwise vest in any Award not exercisable or vested at the time of grant shall only result from continued services as a Non-Employee Director or Consultant or continued employment, as the case may be, with the Company or any Affiliate, and/or satisfaction of any other performance goals or other conditions or restrictions applicable, by its terms, to such Award, except, in each such case, as the Committee may, in its discretion, expressly determine otherwise. Subject to the sole and absolute discretion and determination of the Committee, the Committee may decide to grant Awards under the Plan, the exercise or vesting of which, as applicable, shall be conditional upon the performance of the Company and/or an Affiliate and/or a division or other business unit of the Company or of an Affiliate and/or upon the performance of the Participant, over such period and measured against such objective criteria as shall be determined by the Committee and notified to the Participant
13.4. No Effects on Benefits. Payments and other compensation received by a Participant under an Award are not part of such Participant’s normal or expected compensation or salary for any purpose, including calculating termination, indemnity, severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments under any laws, plans, contracts, arrangements or otherwise. No claim or entitlement to compensation or damages arises from the termination of the Plan or diminution in value of any Award or Shares purchased or otherwise received under the Plan.
13.4. One or More Types of Awards. A particular type of Award may be granted to a Participant either alone or in addition to other Awards under the Plan.
ARTICLE XIV.
CHANGE OF CONTROL
14.1. Treatment of Outstanding Awards.
(a) In the event of a Change of Control, each outstanding Award shall be treated as the Committee determines, including, without limitation, that each Award be honored or assumed, or equivalent rights substituted therefor, by the New Employer. References to the Committee in this Article XIV are to the Committee as constituted prior to the Change of Control.
(b) Notwithstanding any other provisions of the Plan to the contrary, in the event that the New Employer does not honor, assume or substitute for the Award in such Change of Control Transaction as described in Section 14.1(a), (1)(A) the Award shall become fully exercisable (as applicable), vested and nonforfeitable; (B) any Period of Restriction applicable to the Award shall lapse; and (C) any target performance goals applicable to the Award shall be deemed to have been attained in full (unless actual performance exceeds the target, in which case actual performance shall be used) and any other terms and condition applicable to the award shall be deemed met; and (2) in the case of an Option or Stock Appreciation Right, the Committee will notify the applicable Participant that the Option or Stock Appreciation Right will be exercisable for a period of time determined by the Committee in its discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.
(c) For the purposes of this Article XIV, an Award shall be considered honored, assumed or substituted for if, following the Change of Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change of Control, the consideration (whether stock, cash, or other securities or property) received in the Change of Control transaction by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in such transaction is not solely common stock of the New Employer, the Committee may, with the consent of the New Employer, if applicable, provide for the consideration to be received upon the exercise or payment of an Award, for each Share subject to such Award, to be solely common stock of the New Employer equal in fair market value, as determined by the Committee, to the per share consideration received by holders of Shares in such transaction. Notwithstanding anything in this Article XIV to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered honor, assumed or substituted for if the Company or its successor or the New Employer modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals only to reflect any successor corporation’s post-Change of Control corporate structure will not be deemed to invalidate an otherwise valid honoring, assumption or substitution.
14.2. No Implied Rights; Other Limitations. No Participant shall have any right to prevent the consummation of any of the acts described in Section 4.3 or 14.1 affecting the number of Shares available to, or other entitlement of, such Participant under the Plan or such Participant’s Award. Any actions or determinations of the Committee under this Article XIV need not be uniform as to all outstanding Awards, nor treat all Participants identically.
ARTICLE XV.
AMENDMENT, MODIFICATION, AND TERMINATION
15.1. Amendment and Termination of the Plan. The Board may, at any time and with or without prior notice, amend, alter, suspend or terminate the Plan, retroactively or otherwise, but no such amendment, alteration, suspension or termination of the Plan shall be made which would materially impair the previously accrued rights of any Participant with respect to a previously granted Award without such Participant’s consent, except any such amendment made to comply with applicable law, tax rules, stock exchange rules or accounting rules. In addition, no such amendment shall be made without the approval of the Company’s stockholders to the extent such approval is required by any applicable law, tax rules, stock exchange rules or accounting rules (including as necessary to comply with any rules or requirements of any securities exchange or inter-dealer quotation system on which the Shares may be listed or quoted).
15.2. Amendment of Awards. Subject to the immediately following sentence, the Committee may unilaterally amend or alter the terms of any Award theretofore granted, including any Award Agreement, retroactively or otherwise, but no such amendment shall be inconsistent with the terms and conditions of the Plan or materially impair the previously accrued rights of the Participant to whom such Award was granted with respect to such Award without his or her consent, except such an amendment made to cause the Plan or such Award to comply with applicable law, tax rules, stock exchange rules or accounting rules.
ARTICLE XVI.
TAX WITHHOLDING AND OTHER TAX MATTERS
16.1. Tax Withholding. The Company and/or any Affiliate are authorized to withhold from any Award granted or payment due under the Plan the amount of all taxes due in respect of such Award or payment and take any such other action as may be necessary or appropriate, as determined by the Committee, to satisfy all obligations for the payment of such taxes. No later than the date as of which an amount first becomes includible in the gross income or wages of a Participant for tax purposes with respect to any Award, such Participant shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any taxes or social security (or similar) contributions of any kind required by law to be withheld with respect to such amount. The obligations of the Company under the Plan shall be conditional on such payment or satisfactory arrangements (as determined by the Committee in its discretion), and the Company and the Subsidiaries and Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to such Participant, whether or not under the Plan.
16.2. Withholding or Tendering Shares. Without limiting the generality of Section 16.1, subject to compliance with Applicable Law, the Committee may in its discretion permit a Participant to satisfy or arrange to satisfy, in whole or in part, the tax obligations incident to an Award by: (a) electing to have the Company withhold Shares or other property otherwise deliverable to such Participant pursuant to his or her Award (provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy required withholding obligations using the minimum statutory withholding rates for tax purposes, including payroll taxes, that are applicable to supplemental taxable income) and/or (b) tendering to the Company Shares owned by such Participant (or by such Participant and his or her spouse jointly) and purchased or held for the requisite period of time as may be required to avoid the Company’s or the Affiliates’ incurring an adverse accounting charge, based, in each case, on the Fair Market Value of the Shares on the payment date as determined by the Committee. All such elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate. The Committee may establish such procedures as it deems appropriate, including making irrevocable elections, for settlement of withholding obligations with Shares or otherwise.
16.3. Restrictions. The satisfaction of tax obligations pursuant to this Article XVI shall be subject to such restrictions as the Committee may impose, including any restrictions required by Applicable Law or the rules and regulations of the SEC, and shall be construed consistent with an intent to comply with any such Applicable Laws.
16.4. No Guarantee of Favorable Tax Treatment. The Company does not warrant that any Award under the Plan will qualify for favorable tax treatment under any provision of any applicable law. The Company shall not be liable to any Participant for any tax, interest, or penalties the Participant might owe as a result of the grant, holding, vesting, exercise, or payment of any Award under the Plan.
ARTICLE XVII.
LIMITS OF LIABILITY; INDEMNIFICATION
17.1. Limits of Liability.
(a) Any liability of the Company or an Affiliate to any Participant with respect to any Award shall be based solely upon contractual obligations created by the Plan and the Award Agreement.
(b) None of the Company, any Affiliate, any member of the Board or the Committee or any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability, in the absence of bad faith, to any party for any action taken or not taken in connection with the Plan, except as may expressly be provided by statute.
(c) Each member of the Committee, while serving as such, shall be considered to be acting in his or her capacity as a director of the Company. Members of the Board of Directors and members of the Committee acting under the Plan shall be fully protected in relying in good faith upon the advice of counsel and shall incur no liability except for gross negligence or willful misconduct in the performance of their duties.
(d) The Company shall not be liable to a Participant or any other person as to: (i) the non-issuance of Shares as to which the Company has been unable to obtain from any regulatory body having relevant jurisdiction the authority deemed by the Committee or the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, and (ii) any tax consequence expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Option or other Award.
17.2. Indemnification. Subject to the requirements and restrictions of Applicable Law and any separate indemnity agreement by and between the Company or any Affiliate and a respective member of the Committee or of the Board, or an officer of the Company, each individual who is or shall have been a member of the Committee or of the Board, or an officer of the Company to whom authority was delegated in accordance with Article III, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is a result of the individual’s own willful misconduct or except as provided by statute. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individual may be entitled under the Company’s Articles of Association, as a matter of law, or otherwise, or any power that the Company may have to indemnify or hold harmless such individual.
ARTICLE XVIII.
MISCELLANEOUS
18.1. Drafting Context. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. The words “Article,” “Section,” and “paragraph” herein shall refer to provisions of the Plan, unless expressly indicated otherwise. The words “include,” “includes,” and “including” herein shall be deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of similar import, unless the context otherwise requires. Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth therein or herein), (ii) references to any law, constitution, statute, treaty, regulation, rule or ordinance, including any section or other part thereof, shall refer to it as amended from time to time and shall include any successor thereof, and (iii) all references herein to Sections shall be construed to refer to Sections to the Plan The headings and captions appearing herein are inserted only as a matter of convenience. They do not define, limit, construe, or describe the scope or intent of the provisions of the Plan.
18.2. Forfeiture / Clawback. The Committee may, in its discretion, specify in an Award Agreement or a policy that will be deemed incorporated into an Award Agreement by reference (regardless of whether such policy is established before or after the date of such Award Agreement), that a Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, rescission or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting, restrictions or performance conditions of an Award. Such events may include, but shall not be limited to, Termination with or without cause, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or restatement of the Company’s financial statements to reflect adverse results from those previously released financial statements, as a consequence of errors, omissions, fraud, or misconduct.
18.3. Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
18.4. Exercise and Payment of Awards. An Award shall be deemed exercised or claimed when the Secretary of the Company or any other Company official or other person designated by the Committee for such purpose receives appropriate written notice from a Participant, in form acceptable to the Committee, together with payment of the applicable Option Price, Grant Price or other purchase price, if any, and compliance with Article XVI, in accordance with the Plan and such Participant’s Award Agreement.
18.5. Deferrals. Subject to applicable law, the Committee may from time to time establish procedures pursuant to which a Participant may defer on an elective or mandatory basis receipt of all or a portion of the cash or Shares subject to an Award on such terms and conditions as the Committee shall determine, including those of any deferred compensation plan of the Company or any Affiliate specified by the Committee for such purpose.
18.6. Loans. The Company may, in the discretion of the Committee, extend one or more loans to Participants in connection with the exercise or receipt of an Award granted to any such Participant; provided, however, that the Company shall not extend loans to any Participant if prohibited by Applicable Law or the rules of any stock exchange or quotation system on which the Company’s securities are listed. The terms and conditions of any such loan shall be established by the Committee.
18.7. No Effect on Other Plans. Neither the adoption of the Plan nor anything contained herein shall affect any other compensation or incentive plans or arrangements of the Company or any Affiliate, or prevent or limit the right of the Company or any Affiliate to establish any other forms of incentives or compensation for their directors, officers, eligible employees or consultants or grant or assume options or other rights otherwise than under the Plan.
18.8. Section 16 of Exchange Act. The provisions and operation of the Plan are intended to ensure that no transaction under the Plan is subject to (and not exempt from) the short-swing profit recovery rules of Section 16(b) of the Exchange Act. Unless otherwise stated in the Award Agreement, notwithstanding any other provision of the Plan, any Award granted to an Insider shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3) that are requirements for the application of such exemptive rule, and the Plan and the Award Agreement shall be deemed amended to the extent necessary to conform to such limitations.
18.9. Requirements of Law; Limitations on Awards.
(a) The granting of Awards and the issuance of Shares under the Plan shall be subject to all Applicable Laws and to such approvals by any governmental agencies or national securities exchanges as may be required.
(b) If at any time the Committee shall determine, in its discretion, that the listing, registration and/or qualification of Shares upon any securities exchange or under any law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of Shares hereunder, the Company shall have no obligation to allow the grant, exercise or payment of any Award, or to issue or deliver evidence of title for Shares issued under the Plan, in whole or in part, unless and until such listing, registration, qualification, consent and/or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Committee.
(c) If at any time counsel to the Company shall be of the opinion that any sale or delivery of Shares pursuant to an Award is or may be in the circumstances unlawful or result in the imposition of excise taxes on the Company or any Affiliate under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act, or otherwise with respect to Shares or Awards and the right to exercise or payment of any Option or Award shall be suspended until, in the opinion of such counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company or any Affiliate.
(d) Upon termination of any period of suspension under this Section 18.9, any Award affected by such suspension which shall not then have expired or terminated shall be reinstated as to all Shares available before such suspension and as to the Shares which would otherwise have become available during the period of such suspension, but no suspension shall extend the term of any Award.
(e) The Committee may require each person receiving Shares in connection with any Award under the Plan to represent and agree with the Company in writing that such person is acquiring such Shares for investment without a view to the distribution thereof, and/or provide such other representations and agreements as the Committee may prescribe. The Committee, in its absolute discretion, may impose such restrictions on the ownership and transferability of the Shares purchasable or otherwise receivable by any person under any Award as it deems appropriate. Any such restrictions shall be set forth in the applicable Award Agreement, and the certificates evidencing such shares may include any legend that the Committee deems appropriate to reflect any such restrictions.
(f) An Award and any Shares received upon the exercise or payment of an Award shall be subject to such other transfer and/or ownership restrictions and/or legending requirements under the Company's Articles of Association and/or as the Committee may establish in its discretion and may be referred to on the certificates evidencing such Shares, including restrictions under applicable securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares.
18.10. Participants Deemed to Accept Plan. By accepting any benefit under the Plan, each Participant and each person claiming under or through any such Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Board, the Committee or the Company, in any case in accordance with the terms and conditions of the Plan.
18.11. Governing Law. The Plan, all determinations made and actions taken pursuant hereto and, except as provided below or in an applicable subplan, each Award Agreement to a Participant shall be governed by the laws of the State of Israel, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction. Unless otherwise provided in the Award Agreement, Participants are deemed to submit to the exclusive jurisdiction and venue of the courts in Tel-Aviv, Israel, to resolve any and all issues that may arise out of or relate to the Plan or any related Award Agreement.
18.12. Plan Unfunded. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of Shares or the payment of cash upon exercise or payment of any Award. Proceeds from the sale of Shares pursuant to Options or other Awards granted under the Plan shall constitute general funds of the Company.
18.13. Administration Costs. The Company shall bear all costs and expenses incurred in administering the Plan, including expenses of issuing Shares pursuant to any Options or other Awards granted hereunder.
18.14. Uncertificated Shares. To the extent that the Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may nevertheless be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.
18.15. No Fractional Shares. An Option or other Award shall not be exercisable with respect to a fractional Share or the lesser of fifty (50) shares or the full number of Shares then subject to the Option or other Award. No fractional Shares shall be issued upon the exercise or payment of an Option or other Award and any such fractions shall be rounded to the nearest whole number.
18.16. Data Protection. By participating in the Plan, each Participant consents to the collection, processing, transmission and storage by the Company or any Affiliate, in any form whatsoever, of any data of a professional or personal nature which is necessary for the purposes of administering the Plan. The Company may share such information with any Affiliate, any trustee, its registrars, brokers, other third-party administrator or any person who obtains control of the Company or any Affiliate or any division respectively thereof.
18.17. Right of Offset. The Company and any Affiliate shall have the right to offset against the obligations to make payment or issue any Shares to any Participant under the Plan, any outstanding amounts (including travel and entertainment advance balances, loans, tax withholding amounts paid by the employer or amounts repayable to the Company or any Affiliate pursuant to tax equalization, housing, automobile or other employee programs) such Participant then owes to the Company or any Affiliate and any amounts the Committee otherwise deems appropriate pursuant to any tax equalization policy or agreement.
18.18. Participants. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws or practices of countries in which the Company and/or any Affiliate operates or has Employees, Non-Employee Directors or Consultants, the Committee, in its sole discretion, shall have the power and authority to:
(a) Determine which Affiliates shall be covered by the Plan;
(b) Determine which Employees, Non-Employee Directors and/or Consultants are eligible to participate in the Plan;
(c) Grant Awards (including substitutes for Awards), and modify the terms and conditions of any Awards, on such terms and conditions as the Committee determines necessary or appropriate to permit participation in the Plan by individuals otherwise eligible to so participate, or otherwise to comply with applicable laws or conform to applicable requirements or practices of the applicable jurisdictions;
(d) Establish Subplans and adopt or modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable. Any subplans and modifications to Plan terms and procedures established under this Section 18.18 by the Committee shall be attached to the Plan as appendices; and
(e) Take any action, before or after an Award is made, that the Committee, in its discretion, deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals.
Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate any Applicable Law.
18.19. Rules Particular to Specific Countries. Notwithstanding anything herein to the contrary, to the extent determined by the Committee, the terms and conditions of the Plan shall be adjusted with respect to a particular country or other jurisdiction by means of a Subplan to the Plan in the form of an appendix, and to the extent that the terms and conditions set forth in the Subplan conflict with any provisions of the Plan, the provisions of the Subplan shall govern. Terms and conditions set forth in the Subplan shall apply only to Awards granted to Participants under the jurisdiction of the specific country that is subject of the Subplan and shall not apply to any other Awards.
* * *
APPENDIX A – ISRAEL
TO THE
WIX.COM LTD.
2013 INCENTIVE COMPENSATION PLAN
1. GENERAL
1.1. This appendix (the: “Appendix”) shall apply only to Israeli Participants (as defined below). The provisions specified hereunder shall form an integral part of the Wix.com Ltd. 2013 Incentive Compensation Plan (hereinafter: the “Plan”, the “Company”), which applies to the issuance of Awards to employees, directors, consultants and service provides of the Company or its Affiliates.
1.2. This Appendix is effective with respect to Awards granted as of 30 days from the date it was submitted with the ITA and shall comply with Section 102 (as defined below).
1.3. This Appendix is to be read as a continuation of the Plan and only modifies Awards granted to Israeli Participants (as defined below) so that they comply with the requirements set by the Israeli law in general, and in particular with the provisions of Section 102 (as specified herein), as may be amended or replaced from time to time. For the avoidance of doubt, this Appendix does not add to or modify the Plan in respect of any other category of Participants.
1.4. The Plan and this Appendix are complimentary to each other and shall be deemed as one. Subject to Section 1.3 above, in any case of contradiction, whether explicit or implied, between any definitions and/or provisions of this Appendix and the Plan, the provisions set out in this Appendix shall prevail.
1.5. Any capitalized terms not specifically defined in this Appendix shall be construed according to the interpretation given to it in the Plan.
2. DEFINITIONS
2.1. “Affiliate” means any “employing company” within the meaning of Section 102(a) of the Ordinance.
2.2. “Approved 102 Award” means an Award granted pursuant to Section 102(b) of the Ordinance and held in trust by a Trustee for the benefit of the Employee.
2.3. “Capital Gain Award (CGA)” means an Approved 102 Award elected and designated by the Company to qualify under the capital gain tax treatment in accordance with the provisions of Section 102(b)(2) of the Ordinance.
2.4. “Controlling Shareholder” shall have the meaning ascribed to it in Section 102 of the Ordinance.
2.5. “Employee” means an Israeli Participant who is employed by the Company or its Affiliates, including an individual who is serving as an “office holder” as define din the Israeli Companies Law, 1999, as amended from time to time, but excluding any Controlling Shareholder.
2.6. “Israeli Participant” means a person who is a resident of the state of Israel or who is deemed to be a resident of the state of Israel for Israeli tax purposes, and receives or holds an Award under the Plan and this Appendix.
2.7. “ITA” means the Israeli Tax Authorities.
2.8. “Ordinary Income Award (OIA)” means an Approved 102 Award elected and designated by the Company to qualify under the ordinary income tax treatment in accordance with the provisions of Section 102(b)(1) of the Ordinance.
2.9. “102 Award” means any Award granted to Employees pursuant to Section 102 of the Ordinance and any other rulings, procedures and clarifications promulgated thereunder or issued by the ITA.
2.10. “3(i) Award” means an Award granted pursuant to Section 3(i) of the Ordinance to any person who is a Non- Employee.
2.11. “Israeli Award Agreement” notwithstanding Section 2.4 of the Plan, for the purpose of this Appendix, Israeli Award Agreement shall mean a written agreement entered into and signed by the Company and an Israeli Participant that sets out the terms and conditions of an Award.
2.12. “Non-Employee” means an Israeli Participant who is a consultant, adviser, service provider, Controlling Shareholder or any other person who is not an Employee.
2.13. “Ordinance” means the Israeli Income Tax Ordinance [New Version] 1961 as now in effect or as hereafter amended.
2.14. “Section 102” means section 102 of the Ordinance, the Income Tax Rules (Tax Relief for Issuance of Shares to Employees), 2003, and any other rules, regulations, orders or procedures promulgated thereunder as now in effect or as hereafter amended.
2.15. “Trustee” means any person appointed by the Company to serve as a trustee and approved by the ITA, all in accordance with the provisions of Section 102(a) of the Ordinance.
2.16. “Unapproved 102 Award” means an Award granted pursuant to Section 102(c) of the Ordinance and not held in trust by a Trustee.
3. ISSUANCE OF AWARDS
3.1. Notwithstanding Article V of the Plan and in addition thereto, any Israeli Participants eligible for participation in the Plan and this Appendix as Israeli Participants shall include any Employee and/or Non-Employee of the Company or of any of the Company’s Affiliates; provided, however, that (i) Employees may only be granted 102 Awards; and (ii) Non-Employees and/or Controlling Shareholders may only be granted 3(i) Awards.
3.2. The Company may designate Awards granted to Employees pursuant to Section 102 as Unapproved 102 Awards or Approved 102 Awards.
3.3. The grant of Approved 102 Awards shall be made under this Appendix, and shall be conditioned upon the approval of this Appendix by the ITA.
3.4. Approved 102 Awards may either be classified as Capital Gain Awards (“CGAs”) or Ordinary Income Awards (“OIAs”).
3.5. No Approved 102 Awards may be granted under this Appendix to any eligible Employee, unless and until, the Company’s election of the type of Approved 102 Awards as CGA or OIA granted to Employees (the “Election”), is appropriately filed with the ITA. Such Election shall become effective beginning the first date of grant of an Approved 102 Award under this Appendix and shall remain in effect until the end of the year following the year during which the Company first granted Approved 102 Awards. The Election shall obligate the Company to grant only the type of Approved 102 Award it has elected, and shall apply to all Israeli Participants who were granted Approved 102 Awards during the period indicated herein, all in accordance with the provisions of Section 102(g) of the Ordinance. For the avoidance of doubt, such Election shall not prevent the Company from granting Unapproved 102 Awards simultaneously.
3.6. All Approved 102 Awards must be held in trust by a Trustee, as described in Section 4 below.
3.7. For the avoidance of doubt, the designation of Unapproved 102 Awards and Approved 102 Awards shall be subject to the terms and conditions set forth in Section 102.
4. TRUSTEE
4.1. The terms and conditions applicable to the trust relating to Section 102 shall be set forth in an agreement signed by the Company and the Trustee (the “Trust Agreement”).
4.2. Approved 102 Awards which shall be granted under this Appendix and/or any Shares allocated or issued upon exercise or vesting of such Approved 102 Awards and/or other rights granted thereunder and/or shares received subsequently following any realization of rights, including without limitation bonus shares, shall be allocated or issued to the Trustee and held for the benefit of the Employee for no less than such period of time as required by Section 102 (the “Holding Period”). In case the requirements for Approved 102 Awards are not met, then the Approved 102 Awards shall be regarded as Unapproved 102 Awards, all in accordance with the provisions of Section 102.
4.3. Notwithstanding anything to the contrary, the Trustee shall not release any Shares allocated or issued upon exercise or vesting of Approved 102 Awards prior to the full payment of the Employee’s tax liabilities, if any, arising from Approved 102 Awards which were granted to him/her and/or any Shares allocated or issued upon exercise or vesting of such Awards.
4.4. With respect to any Approved 102 Award, subject to the provisions of Section 102, an Israeli Participant shall not sell or release from trust any Share received upon the exercise or vesting of an Approved 102 Award and/or any rights granted thereunder and/or share received subsequently following any realization of rights, including without limitation, bonus shares, until the lapse of the Holding Period required under Section 102. Notwithstanding the above, if any such sale or release occurs during the Holding Period, the sanctions under Section 102 shall apply to and shall be borne solely by such Israeli Participant. Subject to the foregoing, the Trustee may, pursuant to a written or electronic request from the Participant, release and transfer such Shares to a designated third party, provided that both of the following conditions have been fulfilled prior to such release or transfer: (i) payment has been made to the ITA of all taxes required to be paid upon the release and transfer of the Shares, and confirmation of such payment has been received by the Trustee and (ii) the Trustee has confirmed with the Company that all requirements for such release and transfer have been fulfilled according to the terms of the Company’s corporate documents, the Plan, the Israeli Award Agreement and any Applicable Law.
4.5. Upon receipt of any Approved 102 Award, if requested to do so by the Company. Affiliate or the Trustee, the Employee will sign an undertaking to release the Trustee from any liability in respect of any action or decision duly taken and bona fide executed in relation with this Appendix, or any Approved 102 Award or Share granted to him thereunder.
4.6. Without derogating from the provisions of Article XVI of the Plan, the provisions of Section 16.1 of the Plan shall apply also to the Trustee. Accordingly, Trustee shall also have withholding rights as further described in Section 16.1 of the Plan.
4.7. In the case of 102 Awards, the Trustee shall have no rights as a shareholder of the Company with respect to the Shares covered by such Award until the Trustee becomes the record holder for such Shares for the Participant’s benefit, and the Israeli Participant shall have no rights as a shareholder of the Company with respect to the Shares covered by the Award until the date of the release of such Shares from the Trustee to the Israeli Participant and the transfer of record ownership of such Shares to the Israeli Participant.
5. THE AWARDS
Notwithstanding anything to the contrary in the Plan and in addition thereto, the terms and conditions upon which the Awards shall be issued and exercised or vest, as applicable, shall be as specified in the Israeli Award Agreement to be executed pursuant to the Plan and to this Appendix. Each Israeli Award Agreement shall be subject to Section 102 or Section 3(i) of the Ordinance, as applicable, and shall state, inter alia, the number of Shares to which the Award relates, the type of Award granted thereunder (whether a CGA, OIA, Unapproved 102 Award or a 3(i) Award), and any applicable vesting provisions and exercise price that may be payable.
6. FAIR MARKET VALUE
Without derogating from Section 2.18 of the Plan and solely for the purpose of determining the tax liability pursuant to Section 102(b)(3) of the Ordinance, if at the date of grant of any CGA, the Company’s Shares are listed on any established stock exchange or a national market system or if the Company’s Shares will be registered for trading within ninety (90) days following the date of grant of the CGAs, the fair market value of the Shares at the date of grant shall be determined in accordance with the average value of the Company’s Shares on the thirty (30) trading days preceding the date of grant or on the thirty (30) trading days following the date of registration for trading, as the case may be.
7. EXERCISE OF AWARDS THAT ARE OPTIONS TO PURCHASE SHARES
Awards that represent options to purchase Shares shall be exercised by the Israeli Participant by giving a written or electronic notice to the Company and/or to any third party designated by the Company (the “Representative”), in such form and method as may be determined by the Company and, when applicable, by the Trustee, in accordance with the requirements of Section 102, which exercise shall be effective upon receipt of such notice by the Company and/or the Representative and the payWix.com Ltd., an Israeli company (the “Company”), has adopted the Wix.com Ltd. 2013 Incentive Compensation Plan (the “Plan”) for the benefit of non-employee directors of the Company and officers and eligible employees and consultants of the Company and any Affiliates (as each term is defined below), as follows:
ARTICLE I. ESTABLISHMENT; PURPOSES; AND DURATION
1.1.Establishment of the Plan. The Company hereby establishes this incentive compensation plan to be known as the “Wix.com Ltd. 2013 Incentive Compensation Plan,” as set forth in this document. The Plan permits the grant of Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards, Dividend Equivalents and Cash-Based Awards. The Plan shall become effective upon the date of its adoption by the Board (the “Effective Date”), provided that prior to the IPO Date and within twelve (12) months after the date the Plan is adopted by the Board, the Plan is approved by the holders of a majority of the outstanding Shares which are present and voted at a meeting, or by written consent in lieu of a meeting; provided further that no Award shall be exercisable or vested until such shareholder approval, and if the Plan is not so approved by the Company’s shareholders on or before the last day of such twelve (12)-month period, the Plan and any Awards previously granted shall thereupon be automatically canceled and deemed to have been null and void ab initio. The Plan shall remain in effect as provided in Section 1.3.
1.2.Purposes of the Plan. The purposes of the Plan are to provide additional incentives to non-employee directors of the Company and to those officers, employees and consultants of the Company and Affiliates, whose substantial contributions are essential to the continued growth and success of the business of the Company and the Affiliates, in order to strengthen their commitment to the Company and the Affiliates, and to attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company and to further align the interests of such non-employee directors, officers, employees and consultants with the interests of the shareholders of the Company. To accomplish such purposes, the Plan provides that the Company may grant Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards, Dividend Equivalents and Cash-Based Awards.
1.3.Duration of the Plan. The Plan shall commence on the Effective Date, as described in Section 1.1, and shall remain in effect, subject to the right of the Board of Directors to amend or terminate the Plan at any time pursuant to Article XV, until all Shares subject to it shall have been delivered, and any restrictions on such Shares have lapsed, pursuant to the Plan’s provisions.
1. DEFINITIONS
Certain terms used herein have the definitions given to them in the first instance in which they are used. In addition, for purposes of the Plan, the following terms are defined as set forth below:
1.1.“Affiliate” means (i) any Subsidiary; (ii) any Person that directly or indirectly controls, is controlled by or is under common control with the Company; and/or (iii) to the extent provided by the Committee, any Person in which the Company has a significant interest. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting or other securities, by contract or otherwise.
1.2.“Applicable Exchange” means the New York Stock Exchange, NASDAQ Stock Market or such other securities exchange as may at the applicable time be the principal market for the Shares.
“Applicable Law” means any applicable law, rule, regulation, statute, pronouncement, policy, interpretation, judgment, order or decree of any federal, provincial, state or local governmental, regulatory or adjudicative authority or agency, of any jurisdiction, and the rules and regulations of any stock exchange or trading system on which the Shares are then traded or listed. “Award” means, individually or collectively, a grant under the Plan of Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Cash-Based Awards, Other Stock-Based Awards and Dividend Equivalents. “Award Agreement” means either: (a) a written agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under the Plan, or (b) a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including any amendment or modification thereof. Subject to compliance with Applicable Law, the Committee may provide for the use of electronic, internet or other non-paper Award Agreements, and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant. “Beneficial Ownership” (including correlative terms) shall have the meaning given such term in Rule 13d-3 promulgated under the Exchange Act. “Board” or “Board of Directors” means the Board of Directors of the Company. “Cash-Based Award” means an Award, whose value is determined by the Committee, granted to a Participant, as described in Article XI. “Cause” means, unless otherwise provided in an Award Agreement, any of the following: (a) any fraud, embezzlement or felony or similar act by the Participant (whether or not related to Participant’s relationship with the Company or any of its Affiliates); (b) an act of moral turpitude by the Participant, or any act that causes significant injury to the reputation, business, assets, operations or business relationship of the Company or an Affiliate; (c) any breach by the Participant of an agreement between the Company or any Affiliate and the Participant, including, without limitation, breach of confidentiality, non-competition or non-solicitation covenants, or of any duty of the Participant to the Company or any Affiliate thereof; (d) in case of an Employee, performance by an Employee of any act that entitles the Company or an Affiliate (as applicable) to dismiss him without paying him any or partial severance pay in connection with such dismissal under Applicable Law; or (e) any circumstances that constitute grounds for termination for cause as defined under the Participant’s employment, consulting or service agreement with the Company or Affiliate, to the extent applicable. “Change of Control” means the occurrence of any of the following: an acquisition in one transaction or a series of related transactions (other than directly from the Company or pursuant to Awards granted under the Plan or compensatory options or other similar awards granted by the Company) by any Person of any Voting Securities of the Company, immediately after which such Person has Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the Company’s then outstanding Voting Securities; provided, however, that in determining whether a Change of Control has occurred pursuant to this Section 2.10(a), Voting Securities of the Company which are acquired in a Non-Control Acquisition shall not constitute an acquisition that would cause a Change of Control; or the consummation of any merger, consolidation, recapitalization or reorganization involving the Company unless: the shareholders of the Company, immediately before such merger, consolidation, recapitalization or reorganization, own, directly or indirectly, immediately following such merger, consolidation, recapitalization or reorganization, more than fifty percent (50%) of the combined voting power of the outstanding Voting Securities of the corporation resulting from such merger or consolidation or reorganization (the “Company Surviving Corporation”) in substantially the same proportion as their ownership of the Voting Securities of the Company immediately before such merger, consolidation, recapitalization or reorganization; and the individuals who were members of the Board immediately prior to the execution of the agreement providing for such merger, consolidation, recapitalization or reorganization constitute at least a majority of the members of the board of directors of the Company Surviving Corporation, or a corporation Beneficially Owning, directly or indirectly, a majority of the voting securities of the Company Surviving Corporation, and no Person, other than (A) the Company, (B) any Related Entity, (C) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation, recapitalization or reorganization, was maintained by the Company, the Company Surviving Corporation, or any Related Entity or (D) any Person who, together with its Affiliates, immediately prior to such merger, consolidation, recapitalization or reorganization had Beneficial Ownership of fifty percent (50%) or more of the then outstanding Voting Securities of the Company, owns, together with its Affiliates, Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the Company Surviving Corporation’s then outstanding Voting Securities (a transaction described in clauses (b)(i) through (b)(iii) above is referred to herein as a “Non-Control Transaction”); or any sale, lease, exchange, transfer or other disposition (in one transaction or a series of related transactions) of all or substantially all of the assets or business of the Company to any Person (other than (A) a transfer or distribution to a Related Entity, or (B) a transfer or distribution to the Company’s shareholders of the stock of a Related Entity or any other assets).
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because any Person (the “Subject Person”) acquired Beneficial Ownership of fifty percent (50%) or more of the combined voting power of the then outstanding Voting Securities of the Company as a result of the acquisition of Voting Securities of the Company by the Company which, by reducing the number of Voting Securities of the Company then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company and (1) before such share acquisition by the Company the Subject Person becomes the Beneficial Owner of any new or additional Voting Securities of the Company in a related transaction or (2) after such share acquisition by the Company the Subject Person becomes the Beneficial Owner of any new or additional Voting Securities of the Company which in either case increases the percentage of the then outstanding Voting Securities of the Company Beneficially Owned by the Subject Person, then a Change of Control shall be deemed to occur. Solely for purposes of this Section 2.10, (1) “Affiliate” shall mean, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such Person, and (2) “control” (including with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise. Any Relative (for this purpose, “Relative” means a spouse, child, parent, parent of spouse, sibling or grandchild) of an individual shall be deemed to be an Affiliate of such individual for this purpose. None of the Company or any Person controlled by the Company shall be deemed to be an Affiliate of any holder of Shares. “Committee” means the Compensation Committee of the Board of Directors or a subcommittee thereof, or such other committee designated by the Board to administer the Plan. “Company Surviving Corporation” has the meaning provided in Section 2.10(b)(i). “Consultant” means a consultant, advisor or independent contractor who is a natural person and who performs services for the Company or an Affiliate in a capacity other than as an Employee or Director (or who is a personal services company that is wholly owned by such a service provider, or the equivalent thereof, as determined by the Committee in its discretion). “Director” means any individual who is a member of the Board of Directors of the Company and/or any Affiliate. “Disability” means the inability of a Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months, as determined by a medical doctor satisfactory to the Committee. “Disaffiliation” means an Affiliate’s ceasing to be an Affiliate for any reason (including as a result of a public offering, or a spin-off or sale by the Company, of the stock of the Affiliate) or a sale of a division of the Company or an Affiliate.
“Dividend Equivalents” means the equivalent value (in cash or Shares) of dividends that would otherwise be paid on the Shares subject to an Award but that have not been issued or delivered, as described in Article X. “Effective Date” shall have the meaning ascribed to such term in Section 1.1. “Employee” means any person designated as an employee of the Company and/or an Affiliate on the payroll records thereof. An Employee shall not include any individual during any period he or she is classified or treated by the Company or an Affiliate as an independent contractor, a consultant, or any employee of an employment, consulting, or temporary agency or any other entity other than the Company and/or an Affiliate without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified as a common-law employee of the Company and/or an Affiliate during such period. For the avoidance of doubt, a Director who would otherwise be an “Employee” within the meaning of this Section 2.19 shall be considered an Employee for purposes of the Plan. “Exchange Act” means the Securities Exchange Act of 1934, as it may be amended from time to time, including the rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto. “Fair Market Value” means, if the Shares are listed on a national securities exchange, as of any given date, the closing price for a Share on such date on the Applicable Exchange, or if Shares were not traded on the Applicable Exchange on such measurement date, then on the next preceding date on which Shares are traded, all as reported by such source as the Committee may select. If the Shares are not listed on a national securities exchange, Fair Market Value shall be determined by the Committee in good faith. The foregoing to the contrary notwithstanding, the Fair Market Value of a Share on the IPO Date shall be the price to the public as set forth in the final prospectus filed with the SEC pursuant to Rule 424 under the Securities Act with respect to the IPO. “Fiscal Year” means the calendar year, or such other consecutive twelve-month period as the Committee may select. “Freestanding SAR” means an SAR that is granted independently of any Options, as described in Article VII. “Grant Price” means the price established at the time of grant of a SAR pursuant to Article VII, used to determine whether there is any payment due upon exercise of the SAR. “Insider” means an individual who is, on the relevant date, an officer, director or ten percent (10%) Beneficial Owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Committee in accordance with Section 16 of the Exchange Act. “IPO” means a firm commitment underwritten initial public offering of the Shares under the Securities Act as a result of which the Shares become listed on one or more securities exchanges. “IPO Date” means the date of the pricing of the IPO. “New Employer” means, after a Change of Control, a Participant’s employer, or any direct or indirect parent or any direct or indirect majority-owned subsidiary of such employer. “Non-Control Acquisition” means an acquisition (whether by merger, stock purchase, asset purchase or otherwise) by (a) an employee benefit plan (or a trust forming a part thereof) maintained by (i) the Company or (ii) any corporation or other Person of which fifty percent (50%) or more of its total value or total voting power of its Voting Securities or equity interests is owned, directly or indirectly, by the Company (a “Related Entity”); (b) the Company or any Related Entity; (c) any Person in connection with a Non-Control Transaction; or (d) any Person that owns, together with its Affiliates, Beneficial Ownership of fifty percent (50%) or more of the outstanding Voting Securities of the Company on the Effective Date. “Non-Control Transaction” shall have the meaning provided in Section 2.10(b). “Non-Employee Director” means a Director who is not an Employee; provided, however, that, “Non-Employee Director” shall also include an investment fund sponsor that (a) both (i) sponsors an investment fund that holds Shares and initially invested in Shares prior to the IPO Date and (ii) employs, or has a partner who is, an individual who serves as a Non-Employee Director (as determined without regard to this proviso), and (b) is approved by the Committee for this purpose (for the avoidance of doubt, any Award granted to a Non-Employee Director within the meaning of this proviso shall be granted for the purposes described in Section 1.2).
“Notice” means notice provided by a Participant to the Company in a manner prescribed by the Committee. “Option” or “Stock Option” means a Stock Option, as described in Article VI. “Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option. “Other Stock-Based Award” means an equity-based or equity-related Award described in Section 9.1, granted in accordance with the terms and conditions set forth in Article IX. “Participant” means any eligible individual as set forth in Article V who holds one or more outstanding Awards. “Period of Restriction” means the period of time during which Shares of Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture, or, as applicable, the period of time within which performance is measured for purposes of determining whether such an Award has been earned, and, in the case of Restricted Stock, the transfer of Shares of Restricted Stock is limited in some way, in each case in accordance with Article VIII. “Person” means “person” as such term is used for purposes of Section 13(d) or 14(d) of the Exchange Act, including any individual, corporation, limited liability company, partnership, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other entity or any group of persons. “Restricted Stock” means an Award granted to a Participant pursuant to Article VIII. “Restricted Stock Unit” means an Award, whose value is equal to a Share, granted to a Participant pursuant to Article VIII. “Rule 16b-3” means Rule 16b-3 under the Exchange Act, or any successor rule, as the same may be amended from time to time. “SEC” means the Securities and Exchange Commission. “Securities Act” means the Securities Act of 1933, as it may be amended from time to time, including the rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto. “Share” means an Ordinary Share of the Company, par value NIS 0.01 each (including any new, additional or different stock or securities resulting from any change in corporate capitalization as listed in Section 4.3). “Stock Appreciation Right” or “SAR” means an Award, granted as a Freestanding SAR or in connection with a related Option (a “Tandem SAR”), designated as an SAR, pursuant to the terms of Article VII. “Subject Person” has the meaning provided in Section 2.10. “Subplan” means additional incentive compensation plans as may be established by the Board within the parameters and in accordance with the overall terms and provisions of the Plan as may be needed to facilitate local administration of the Plan in any jurisdiction in which the Company or an Affiliate operate in and to conform the Plan to the legal requirements of any such jurisdiction or to allow for favorable tax treatment under any applicable provision of tax law, including, without limitation, Appendix A - Israel, Appendix B – United States, enclosed hereto and other appendices that may be enclosed to this Plan. “Subsidiary” means any present or future corporation which is or would be a subsidiary of the Company as determined by the Committee. “Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, options or other awards previously granted, or the right or obligation to grant future options or other awards, by a company acquired by the Company and/or an Affiliate or with which the Company and/or an Affiliate combines, or otherwise in connection with any merger, consolidation, acquisition of property or stock, or reorganization involving the Company or an Affiliate. “Tandem SAR” means an SAR that is granted in connection with a related Option pursuant to Article VII. “Termination” means the termination of the applicable Participant’s employment with, or performance of services for, the Company or any Affiliate under any circumstances, including, without limitation, termination by resignation, discharge, death, disability, and retirement. Unless otherwise determined by the Committee, a Termination shall not be considered to have occurred in the case of: (i) sick leave; (ii) military leave; (iii) any other bona fide leave of absence approved by the Committee; (iv) changes in status from Director to advisory director; (v) transfers between locations of the Company or between or among the Company and/or an Affiliate or Affiliates, including, whenever there was a termination of employment or service of Participant and simultaneous reemployment (or commencement of service or employment) or continuing employment or service of a Participant by the Company or any Affiliate; or (vi) if so determined by the Committee, any change in status between service as an Employee, Director or Consultant if such individual continues to perform bona fide services for the Company or an Affiliate.
A Participant employed by, or performing services for, an Affiliate or a division of the Company or of an Affiliate shall be deemed to incur a Termination if, as a result of a Disaffiliation, such Affiliate or division ceases to be an Affiliate or such a division, as the case may be, and the Participant does not immediately thereafter become an employee of, or service provider for, the Company or another Affiliate. The Committee shall have the discretion to determine whether and to what extent the vesting of any Awards shall be tolled during any paid or unpaid leave of absence; provided, however, that, in the absence of such determination, vesting for all Awards shall be tolled during any such unpaid leave (but not for a paid leave). “Voting Securities” shall mean, with respect to any Person that is a corporation, all outstanding voting securities of such Person entitled to vote generally in the election of the board of directors of such Person. ADMINISTRATION General. The Committee shall have exclusive authority to operate, manage and administer the Plan including but not limited to authorizing and administering Subplans all in accordance with its terms and conditions. Notwithstanding the foregoing, in its absolute discretion, the Board may at any time and from time to time exercise any and all rights, duties and responsibilities of the Committee under the Plan, including establishing procedures to be followed by the Committee, but excluding matters which under any applicable law, regulation or rule, including any exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3), are required to be determined in the sole discretion of the Committee. If and to the extent that the Committee may not operate in respect of any matter pursuant to Applicable Law, does not exist or cannot function, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee, subject to the limitations set forth in the immediately preceding sentence. Accordingly, in any such case described in the immediately preceding sentence, any reference to the “Committee” shall also refer to the Board. Committee. The members of the Committee shall be appointed from time to time by, and shall serve at the discretion of, the Board of Directors. Authority of the Committee. The Committee shall have full discretionary authority to grant or, when so restricted by applicable law, recommend the Board to grant, pursuant to the terms of the Plan, Awards to those individuals who are eligible to receive Awards under the Plan.
Except as limited by law or by the Articles of Association of the Company, and subject to the provisions herein, the Committee shall have full power, in accordance with the other terms and provisions of the Plan, to: select Employees, Non-Employee Directors and Consultants who may receive Awards under the Plan and become Participants; determine eligibility for participation in the Plan and decide all questions concerning eligibility for, and the amount of, Awards under the Plan; determine the sizes and types of Awards; determine the terms and conditions of Awards, including the Option Prices of Options and the Grant Prices of SARs; grant Awards as an alternative to, or as the form of payment for grants or rights earned or payable under, other bonus or compensation plans, arrangements or policies of the Company or an Affiliate; grant Substitute Awards on such terms and conditions as the Committee may prescribe; make all determinations under the Plan concerning Termination of any Participant’s employment or service with the Company or an Affiliate, including whether such Termination occurs by reason of cause, disability, retirement or in connection with a Change of Control and whether a leave constitutes a Termination; determine whether a Change of Control shall have occurred; construe and interpret the Plan and any agreement or instrument entered into under the Plan, including any Subplan and Award Agreement; establish and administer any terms, conditions, restrictions, limitations, forfeiture, vesting or exercise schedule, and other provisions of or relating to any Award; establish and administer any performance goals in connection with any Awards, including performance criteria and applicable performance periods, determine the extent to which any performance goals and/or other terms and conditions of an Award are attained or are not attained; construe any ambiguous provisions, correct any defects, supply any omissions and reconcile any inconsistencies in the Plan, Subplan and/or any Award Agreement or any other instrument relating to any Awards; establish, adopt, amend, waive and/or rescind rules, regulations, procedures, guidelines, forms and/or instruments for the Plan’s operation or administration; make all valuation determinations relating to Awards and the payment or settlement thereof; grant waivers of terms, conditions, restrictions and limitations under the Plan or applicable to any Award, or accelerate the vesting or exercisability of any Award; subject to the provisions of Article XV, amend or adjust the terms and conditions of any outstanding Award and/or adjust the number and/or class of shares of stock subject to any outstanding Award; at any time and from time to time after the granting of an Award, specify such additional terms, conditions and restrictions with respect to such Award as may be deemed necessary or appropriate to ensure compliance with any and all applicable laws or rules, including terms, restrictions and conditions for compliance with applicable securities laws or listing rules, methods of withholding or providing for the payment of required taxes and restrictions regarding a Participant’s ability to exercise Options through a cashless (broker-assisted) exercise; offer to buy out an Award previously granted, based on such terms and conditions as the Committee shall establish with and communicate to the Participant at the time such offer is made; determine whether, and to what extent and under what circumstances Awards may be settled in cash, Shares or other property or canceled or suspended; establish any “blackout” period that the Committee in its sole discretion deems necessary or advisable; and exercise all such other authorities, take all such other actions and make all such other determinations as it deems necessary or advisable for the proper operation and/or administration of the Plan. Award Agreements. The Committee shall, subject to applicable laws and rules, determine the date an Award is granted. Each Award shall be evidenced by an Award Agreement; however, two or more Awards granted to a single Participant may be combined in a single Award Agreement. Unless required by Applicable Law, an Award Agreement shall not be a precondition to the granting of an Award; provided, however, that (a) the Committee may, but need not, require as a condition to any Award Agreement’s effectiveness, that such Award Agreement be executed on behalf of the Company and/or by the Participant to whom the Award evidenced thereby shall have been granted (including by electronic signature or other electronic indication of acceptance), and such executed Award Agreement be delivered to the Company, and (b) no person shall have any rights under any Award unless and until the Participant to whom such Award shall have been granted has complied with the applicable terms and conditions of the Award. The Committee shall prescribe the form of all Award Agreements, and, subject to the terms and conditions of the Plan, shall determine the content of all Award Agreements. Any Award Agreement may be supplemented or amended in writing from time to time as approved by the Committee; provided that the terms and conditions of any such Award Agreement as supplemented or amended are not inconsistent with the provisions of the Plan. In the event of any dispute or discrepancy concerning the terms of an Award, the records of the Committee or its designee shall be determinative. Discretionary Authority; Decisions Binding. The Committee shall have full discretionary authority in all matters related to the discharge of its responsibilities and the exercise of its authority under the Plan. All determinations, decisions, actions and interpretations by the Committee with respect to the Plan and any Award Agreement, and all related orders and resolutions of the Committee shall be final, conclusive and binding on all Participants, the Company and its shareholders, any Affiliate and all persons having or claiming to have any right or interest in or under the Plan and/or any Award Agreement. The Committee shall consider such factors as it deems relevant to making or taking such decisions, determinations, actions and interpretations, including the recommendations or advice of any Director or officer or employee of the Company, any director, officer or employee of an Affiliate and such attorneys, consultants and accountants as the Committee may select in its sole and absolute discretion.
A Participant or other holder of an Award may contest a decision or action by the Committee with respect to such person or Award only on the grounds that such decision or action was arbitrary or capricious or was unlawful, and any review of such decision or action shall be limited to determining whether the Committee’s decision or action was arbitrary or capricious or was unlawful. Attorneys; Consultants. The Committee may consult with counsel who may be counsel to the Company. The Committee may, with the approval of the Board, employ such other attorneys and/or consultants, accountants, appraisers, brokers, agents and other persons, any of whom may be an Employee, as the Committee deems necessary or appropriate. The Committee, the Company and its officers and Directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. The Committee shall not incur any liability for any action taken in good faith in reliance upon the advice of such counsel or other persons. Delegation of Administration. Except to the extent prohibited or restricted by applicable law, including any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3), or the applicable rules of a stock exchange, the Committee may, in its discretion, allocate all or any portion of its responsibilities and powers under this Article III to any one or more of its members and/or delegate all or any part of its responsibilities and powers under this Article III to any person or persons selected by it; provided, however, that the Committee may not delegate its authority to correct defects, omissions or inconsistencies in the Plan. Any such authority delegated or allocated by the Committee under this Section 3.7 shall be exercised in accordance with the terms and conditions of the Plan and any rules, regulations or administrative guidelines that may from time to time be established by the Committee, and any such allocation or delegation may be revoked by the Committee at any time. SHARES SUBJECT TO THE PLAN Number of Shares Available for Issuance. The shares of stock subject to Awards granted under the Plan shall be Shares. Such Shares subject to the Plan may be authorized and unissued shares (which will not be subject to preemptive rights), Shares held in treasury by the Company, Shares purchased on the open market or by private purchase or any combination of the foregoing. Subject to adjustment as provided in Section 4.3, the total number of Shares that may be issued pursuant to Awards under the Plan shall be the amount determined by the Board. Rules for Calculating Shares Issued. Shares underlying Awards (or awards under the Prior Plan (in an amount not to exceed 11,215,356)) that are (x) forfeited (including any Shares subject to an Award (or any such other award) that are repurchased by the Company due to failure to meet any applicable condition), cancelled, terminated or expire unexercised, or (y) settled in cash in lieu of issuance of Shares shall be available for issuance pursuant to future Awards, to the extent that such Shares are forfeited, repurchased or not issued under any such Award. Any Shares tendered to pay the Option Price of an Option or other purchase price of an Award (or the option price or other purchase price of any option or other award under the Prior Plan), or withholding tax obligations with respect to an Award (or any awards under the Prior Plan), shall be available for issuance pursuant to future Awards. If any Shares subject to an Award (or any award under the Prior Plan) are not delivered to a Participant because (A) such Shares are withheld to pay the Option Price or other purchase price of such Award (or any award under the Prior Plan), or withholding tax obligations with respect to such Award (or other such award) or (B) a payment upon exercise of a Stock Appreciation Right (or stock appreciation right under the Prior Plan) is made in Shares, the number of Shares subject to the exercised or purchased portion of any such Award that are not delivered to the Participant shall be available for issuance pursuant to future Awards, unless determined otherwise by the Committee. Any Shares delivered under the Plan upon exercise or satisfaction of Substitute Awards shall not reduce the Shares available for issuance under the Plan. Adjustment Provisions.
Notwithstanding any other provisions of the Plan to the contrary, in the event of (a) any dividend (excluding any ordinary dividend) or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, split-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to acquire Shares or other securities of the Company, or other similar corporate transaction or event (including a Change of Control) that affects the Shares, or (b) any unusual or nonrecurring events (including a Change of Control) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or changes in applicable rules, rulings, regulations or other requirements of any governmental body or securities exchange or inter-dealer quotation system, accounting principles or law, such that in either case an adjustment is determined by the Committee in its sole discretion to be necessary or appropriate, then subject to Applicable Law, the Committee shall make any such adjustments in such manner as it may deem equitable, without obtaining Participants' consent, including any or all of the following: adjusting any or all of (A) the number of Shares or other securities of the Company (or number and kind of other securities or other property) that may be delivered in respect of Awards or with respect to which Awards may be granted under the Plan and (B) the terms of any outstanding Award, including (1) the number of Shares or other securities of the Company (or number and kind of other securities or other property) subject to outstanding Awards or to which outstanding Awards relate, (2) the Option Price or Grant Price with respect to any Award or (3) any applicable performance measures; providing for a substitution or assumption of Awards, accelerating the exercisability of, lapse of restrictions (including any Period of Restriction) on, or termination of, Awards or providing for a period of time for exercise prior to the occurrence of such event; and cancelling any one or more outstanding Awards and causing to be paid to the holders thereof, in cash, Shares, other securities or other property, or any combination thereof, the value of such Awards, if any, as determined by the Committee (which, if applicable, may be based upon the price per Share received or to be received by other stockholders of the Company in such event, as the Committee shall resolve), including, in the case of an outstanding Option or SAR, a cash payment in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by the Committee) of the Shares subject to such Option or SAR over the aggregate Option Price or Grant Price of such Option or SAR, respectively (it is being understood that, in such event, any Option or SAR having a per share Option Price or Grant Price equal to, or in excess of, the Fair Market Value of a Share may be canceled and terminated without any payment or consideration therefor); provided, however, that in the case of any “equity restructuring” (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (or any successor pronouncement)), the Committee shall make an equitable or proportionate adjustment to outstanding Awards to reflect such equity restructuring. Any adjustments under this Section 4.3 shall be made in a manner that does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act, to the extent applicable. Any actions or determinations of the Committee under this Section 4.3 need not be uniform as to all outstanding Awards, nor treat all Participants identically. All determinations of the Committee as to adjustments, if any, under this Section 4.3 shall be conclusive and binding for all purposes. No Limitation on Corporate Actions. The existence of the Plan and any Awards granted hereunder shall not affect in any way the right or power of the Company or any Affiliate to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or business structure, any merger or consolidation, any issuance of debt, preferred or prior preference stock ahead of or affecting the Shares, additional shares of capital stock or other securities or subscription rights thereto, any dissolution or liquidation, any sale or transfer of all or part of its assets or business or any other corporate act or proceeding (including Change of Control). ELIGIBILITY AND PARTICIPATION Eligibility. Employees, Non-Employee Directors and Consultants shall be eligible to become Participants and receive Awards in accordance with the terms and conditions of the Plan.
Actual Participation. Subject to the provisions of the Plan, the Committee may, from time to time, select Participants from all eligible Employees, Non-Employee Directors and Consultants and shall determine the nature and amount of each Award. STOCK OPTIONS Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee. The Committee may grant an Option or provide for the grant of an Option, either from time to time in the discretion of the Committee or automatically upon the occurrence of specified events, including the achievement of performance goals, the satisfaction of an event or condition within the control of the recipient of the Option or within the control of others. The granting of an Option shall take place when the Committee (or its designee) by resolution, written consent or other appropriate action determines to grant such Option for a particular number of Shares to a particular Participant at a particular Option Price, or such later date as the Committee (or such designee) shall provide in such resolution, consent or action. Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the maximum duration of the Option, the number of Shares to which the Option pertains, the conditions upon which the Option shall become exercisable and such other provisions as the Committee shall determine, which are not inconsistent with the terms of the Plan. Option Price. The Option Price for each Option shall be determined by the Committee and set forth in the Award Agreement. Duration of Options. Each Option granted to a Participant shall expire at such time as the Committee shall determine at the time of grant and set forth in the Award Agreement; provided, however, that no Option shall be exercisable later than the tenth (10th) anniversary of its grant date. Exercise of Options. Options shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance determine and set forth herein and in the Award Agreement, including, without limitation vesting of the Options pursuant to Section 13.3 herein, which need not be the same for each grant or for each Option or Participant. The period of time over which an Option may be exercised may be extended by the Committee in its sole discretion, if on the scheduled expiration date or termination date (other than due to Termination for Cause) of such Option the Participant’s exercise of such Option would violate an Applicable Law; provided, however, that during such extended exercise period the Option may only be exercised to the extent the Option was exercisable in accordance with its terms immediately prior to such scheduled expiration date; provided further, however, that such extended exercise period shall end not later than thirty (30) days after the exercise of such Option first would no longer violate such law. Payment. Options shall be exercised by the delivery of a written notice of exercise to the Company, in a form specified or accepted by the Committee, or by complying with any alternative exercise procedures that may be authorized by the Committee, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for such Shares, which shall include applicable taxes, if any, in accordance with Article XVI. The Option Price upon exercise of any Option shall be payable to the Company in full by certified or bank check or such other instrument as the Committee may accept. If approved by the Committee in its sole discretion, and subject to any such terms, conditions and limitations as the Committee may prescribe and to the extent permitted by Applicable Law, payment of the Option Price, in full or in part, may also be made as follows: (a) Payment may be made in the form of unrestricted and unencumbered Shares (by actual delivery of such Shares or by attestation) already owned by the Participant exercising such Option, or by such Participant and his or her spouse jointly (based on the Fair Market Value of the Shares on the date the Option is exercised), provided that such already owned Shares must have been either previously acquired by the Participant on the open market or held by the Participant for at least six (6) months at the time of exercise (or meet any such other requirements as the Committee may determine are necessary in order to avoid an accounting earnings charge on account of the use of such Shares to pay the Option Price).
(b) Payment may be made by delivering a properly executed exercise notice to the Company, together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds necessary to pay the Option Price, and, if requested, the amount of any federal, state, local or non-United States withholding taxes. To facilitate the foregoing, the Company may, to the extent permitted by applicable law, enter into agreements for coordinated procedures with one or more brokerage firms. (c) Payment may be made by instructing the Committee to withhold a number of Shares otherwise deliverable to the Participant pursuant to the Option having an aggregate Fair Market Value on the date of exercise equal to the product of: (i) Option Price multiplied by (ii) the number of Shares in respect of which the Option shall have been exercised. (d) Payment may be made by a method whereby the Committee shall withhold a number of Shares otherwise deliverable to the Participant pursuant to the Option (in this Section 6.6(d) "Cashless Exercise"), according to the following formula: N = X(A-B)/A Where: “N” = the calculated number of Shares to be issued to the Participant upon exercise of the Option after rounding to the nearest whole number; “X” = the number of Shares with respect to which the Option is exercised, according to the Participant's notice of exercise; “A” = Fair Market Value of one (1) Share on the date of exercise. “B” = the exercise price per Share (as defined in the Participant’s applicable Award Agreement). (e) In respect of Participants who are not subject to taxation in the United States, payment may be made by a method whereby the Committee shall withhold a number of Shares otherwise deliverable to the Participant pursuant to the Option (in this Section 6.6(e) "Cashless Exercise"), according to the following formula: N = X(A-B)/A Where: “N” = the calculated number of Shares to be issued to the Participant upon exercise of the Option after rounding to the nearest whole number; “X” = the number of Shares with respect to which the Option is exercised, according to the Participant's notice of exercise; “A” = the higher between: (1) the closing price for a Share on the last trading day prior to the exercise date or (2) the limit price that the Participant has indicated when submitted the same-day sale instructions to a broker. “B” = the exercise price per Share (as defined in the Participant’s applicable Award Agreement). (f) Payment may be made by any other method approved or accepted by the Committee in its discretion. Subject to any governing rules or regulations, as soon as practicable after receipt of a written notification of exercise and full payment in accordance with the preceding provisions of this Section 6.6 and satisfaction of tax obligations in accordance with Article XVI, the Company shall deliver to the Participant exercising an Option, in the Participant’s name, evidence of book entry Shares, or, upon the Participant’s request, Share certificates, in an appropriate amount based upon the number of Shares purchased under the Option, subject to Section 18.9. Unless otherwise determined by the Committee, all payments under all of the methods described above shall be paid in United States dollars. Rights as a Shareholder. No Participant or other person shall become the beneficial owner of any Shares subject to an Option, nor have any rights to dividends or other rights of a shareholder with respect to any such Shares, until the Participant has actually received such Shares following exercise of his or her Option in accordance with the provisions of the Plan and the applicable Award Agreement. Termination of Employment or Service. Except as otherwise provided in Section 6.5 and this Section 6.8 or in the applicable Award Agreement, an Option may be exercised only to the extent that it is then exercisable, and if at all times during the period beginning with the date of granting of such Option and ending on the date of exercise of such Option the Participant is an Employee, Non-Employee Director or Consultant. An Option shall cease to become exercisable upon a Termination of the holder thereof. Notwithstanding the foregoing provisions of this Section 6.8 to the contrary, unless earlier terminated in accordance with an Option’s terms, following any such Termination of a Participant, his or her the vested Option shall be exercisable as follows, provided, however, that in no event may an Option be exercised after the expiration date of such Option specified in the applicable Award Agreement, except as otherwise provided by Section 6.6: In the event that such Termination is under any circumstances other than for Cause or by reason of death or Disability, all Options of such Participant that are vested and exercisable at the time of such Termination may, unless earlier terminated in accordance with their terms, be exercised within up to ninety (90) days after the effective date of such Termination, or such different period as the Committee may prescribe.
Notwithstanding any other provision herein to the contrary, if such Termination is for Cause or if, whether or not such Termination is by either party, circumstances arise or are discovered with respect to the Participant that would have constituted Cause for Termination of such Participant, all Options theretofore granted to such Participant (whether vested or not) shall, to the extent not theretofore exercised, terminate as of the effective date of such Termination, unless otherwise determined by the Committee in its discretion that an Option. In the event that (1) a Participant dies while employed by, or performing service for, the Company or an Affiliate, or a Participant dies within any period after such Participant's Termination, or (2) the Participant shall Terminate by reason of Disability, then all Options theretofore granted to such Participant that are then outstanding under Section 6.8(a) and vested but unexercised may be exercised by the Participant or, in case of death, by the Participant's beneficiary designated in accordance with Section 12.2, or, if none, then by the Participant’s estate or by a person who acquired the right to exercise such Options by bequest or inheritance or otherwise by result of death of the Participant, at any time within twelve (12) months after the date of such death or Disability (or such different period as the Committee may prescribe in its discretion). STOCK APPRECIATION RIGHTS Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be granted to Participants at any time and from time to time as shall be determined by the Committee. The Committee may grant an SAR (a) in connection and simultaneously with the grant of an Option (a Tandem SAR) or (b) independent of, and unrelated to, an Option (a Freestanding SAR). The Committee shall have complete discretion in determining the number of Shares to which an SAR pertains (subject to Article IV) and, consistent with the provisions of the Plan, in determining the terms and conditions pertaining to any SAR. Grant Price. The Grant Price for each SAR shall be determined by the Committee and set forth in the Award Agreement. The Grant Price of a Tandem SAR shall be equal to the Option Price of the related Option. Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option. A Tandem SAR shall be exercisable only when and to the extent the related Option is exercisable and may be exercised only with respect to the Shares for which the related Option is then exercisable. A Tandem SAR shall entitle a Participant to elect, in the manner set forth in the Plan and the applicable Award Agreement, in lieu of exercising his or her unexercised related Option for all or a portion of the Shares for which such Option is then exercisable pursuant to its terms, to surrender such Option to the Company with respect to any or all of such Shares and to receive from the Company in exchange therefor a payment described in Section 7.7. An Option with respect to which a Participant has elected to exercise a Tandem SAR shall, to the extent of the Shares covered by such exercise, be canceled automatically and surrendered to the Company. Such Option shall thereafter remain exercisable according to its terms only with respect to the number of Shares as to which it would otherwise be exercisable, less the number of Shares with respect to which such Tandem SAR has been so exercised. Exercise of Freestanding SARs. Freestanding SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, in accordance with the Plan, including vesting under Section 13.3, determines and sets forth in the Award Agreement. An Agreement may provide that the period of time over which a Freestanding SAR may be exercised may be extended by the Committee if on the scheduled expiration date of such SAR the Participant’s exercise of such SAR would violate an applicable law; provided, however, that during such extended exercise period the SAR may only be exercised to the extent the SAR was exercisable in accordance with its terms immediately prior to such scheduled expiration date; provided further, however, that such extended exercise period shall end not later than thirty (30) days after the exercise of such SAR first would no longer violate such law.
Award Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall specify the number of Shares to which the SAR pertains, the Grant Price, the term of the SAR, and such other terms and conditions as the Committee shall determine in accordance with the Plan. Term of SARs. The term of an SAR granted under the Plan shall be determined by the Committee and set forth in the Award Agreement; provided, however, that the term of any Tandem SAR shall be the same as the related Option; provided further, however, that no Freestanding SAR shall be exercisable later than the tenth (10th) anniversary of its grant date. Payment of SAR Amount. An election to exercise SARs shall be deemed to have been made on the date of Notice of such election to the Company. Upon exercise of an SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying: The excess of the Fair Market Value of a Share on the date of exercise over the Grant Price of the SAR; by The number of Shares with respect to which the SAR is exercised. Notwithstanding the foregoing provisions of this Section 7.7 to the contrary, the Committee may establish and set forth in the applicable Award Agreement a maximum amount per Share that will be payable upon the exercise of an SAR. At the discretion of the Committee, such payment upon exercise of an SAR shall be in cash, in Shares of equivalent Fair Market Value, or in some combination thereof. Rights as a Shareholder. A Participant receiving an SAR shall have the rights of a Shareholder only as to Shares, if any, actually issued to such Participant upon satisfaction or achievement of the terms and conditions of the Award, and in accordance with the provisions of the Plan and the applicable Award Agreement, and not with respect to Shares to which such Award relates but which are not actually issued to such Participant. Termination of Employment or Service. Except as otherwise provided by Section 6.5 (in the case of Tandem SARs) or in Section 7.4 (in the case of Freestanding SARs) or in the applicable Award Agreement, a SAR may be exercised only to the extent that it is then vested and exercisable, and if at all times during the period beginning with the date of granting of such SAR and ending on the date of exercise of such SAR the Participant is an Employee, Non-Employee Director or Consultant. A SAR shall cease to become exercisable upon a Termination of the holder thereof. Notwithstanding the foregoing provisions of this Section 7.9 to the contrary, unless earlier terminated in accordance with the its terms, the SAR may be exercised after Termination in accordance with the provisions of Section 6.8 above; provided, however, that in no event may a SAR be exercised after the expiration date of such SAR specified in the applicable Award Agreement, except as provided in Section 6.5 (in the case of Tandem SARs) or in Section 7.4 (in the case of Freestanding SARs). RESTRICTED STOCK AND RESTRICTED STOCK UNITS Awards of Restricted Stock and Restricted Stock Units. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock and/or Restricted Stock Units to Participants in such amounts as the Committee shall determine. Awards of Restricted Stock may be made with or without the requirement of a cash payment from the Participant to whom such Award is made in exchange for, or as a condition precedent to, the completion of such Award and the issuance of Shares of Restricted Stock, and any such required cash payment shall be set forth in the applicable Award Agreement. Subject to the terms and conditions of this Article VIII and the Award Agreement, upon delivery of Shares of Restricted Stock to a Participant, or creation of a book entry evidencing a Participant’s ownership of Shares of Restricted Stock, pursuant to Section 8.6, the Participant shall have all of the rights of a shareholder with respect to such Shares, subject to the terms and restrictions set forth in this Article VIII or the applicable Award Agreement or as determined by the Committee. Award Agreement. Each Restricted Stock and/or Restricted Stock Unit Award shall be evidenced by an Award Agreement that shall specify the Period of Restriction, the number of Shares of Restricted Stock or the number of Restricted Stock Units granted, and such other provisions as the Committee shall determine in accordance with the Plan.
Nontransferability of Restricted Stock. Except as provided in this Article VIII, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, encumbered, alienated, hypothecated or otherwise disposed of until the end of the applicable Period of Restriction established by the Committee and specified in the Restricted Stock Award Agreement. Period of Restriction and Other Restrictions. The Period of Restriction applicable to an Award of Restricted Stock or Restricted Stock Units shall lapse based on a Participant’s continuing service or employment with the Company or an Affiliate, the achievement of performance goals, the satisfaction of other conditions or restrictions or upon the occurrence of other events, in each case, as determined by the Committee, at its discretion, and stated in the Award Agreement. Delivery of Shares and Settlement of Restricted Stock Units. Upon the expiration of the Period of Restriction with respect to any Shares of Restricted Stock, the restrictions set forth in the applicable Award Agreement shall be of no further force or effect with respect to such Shares, except as set forth in such Award Agreement. If applicable stock certificates are held by the Secretary of the Company or an escrow holder, upon such expiration, the Company shall deliver to the Participant, his beneficiary or trustee (as applicable), without charge, the stock certificate evidencing the Shares of Restricted Stock that have not then been forfeited and with respect to which the Period of Restriction has expired. Unless otherwise provided by the Committee in an Award Agreement, upon the expiration of the Period of Restriction with respect to any outstanding Restricted Stock Units, the Company shall deliver to the Participant, or his beneficiary or trustee (as applicable), without charge, one Share for each such outstanding Restricted Stock Unit; provided, however, that the Committee may, in its discretion, elect to (i) pay cash or part cash and part Shares in lieu of delivering only Shares in respect of such Restricted Stock Units or (ii) defer the delivery of Shares beyond the expiration of the Period of Restriction. If a cash payment is made in lieu of delivering Shares, the amount of such payment shall be equal to the Fair Market Value of such Shares as of the date on which the Period of Restriction lapsed with respect to such Restricted Stock Units, less applicable tax withholdings in accordance with Article XVI. Forms of Restricted Stock Awards. Each Participant who receives an Award of Shares of Restricted Stock shall be issued a stock certificate or certificates evidencing the Shares covered by such Award registered in the name of such Participant or its trustee (as the case may be), which certificate or certificates shall bear an appropriate legend, and, if the Committee determines that the Shares of Restricted Stock shall be held by the Company or in escrow rather than delivered to the Participant or its trustee pending expiration of the Period of Restriction, the Committee may require the Participant to additionally execute and deliver to the Company: (i) an escrow agreement satisfactory to the Committee, if applicable, and (ii) an appropriate stock power (endorsed in blank) with respect to such Shares of Restricted Stock. The Committee may require a Participant who receives a certificate or certificates evidencing a Restricted Stock Award to immediately deposit such certificate or certificates, together with a stock power or other appropriate instrument of transfer, endorsed in blank by the Participant, with signatures guaranteed in accordance with the Exchange Act if required by the Committee, with the Secretary of the Company or an escrow holder as provided in the immediately following sentence. The Secretary of the Company or such escrow holder as the Committee may appoint shall retain physical custody of each certificate representing a Restricted Stock Award until the Period of Restriction and any other restrictions imposed by the Committee or under the Award Agreement with respect to the Shares evidenced by such certificate expire or shall have been removed. The foregoing to the contrary notwithstanding, the Committee may, in its discretion, provide that a Participant’s ownership of Shares of Restricted Stock prior to the lapse of the Period of Restriction or any other applicable restrictions shall, in lieu of such certificates, be evidenced by a “book entry” (i.e., a computerized or manual entry) in the records of the Company or its designated agent in the name of the Participant or its trustee (as the case may be) who has received such Award.
Such records of the Company or such agent shall, absent manifest error, be binding on all Participants who receive Restricted Stock Awards evidenced in such manner. The holding of Shares of Restricted Stock by the Company or such an escrow holder, or the use of book entries to evidence the ownership of Shares of Restricted Stock, in accordance with this Section 8.6, shall not affect the rights of Participants as owners or beneficial owners of the Shares of Restricted Stock awarded to them, nor affect the restrictions applicable to such Shares under the Award Agreement or the Plan, including the Period of Restriction. Rights as a Shareholder. Restricted Stock. Participants holding Shares of Restricted Stock shall have all rights of a shareholder as to such Shares immediately upon issuance of such Shares, subject to the terms and conditions of the Plan, the applicable Award Agreement and the Company's Articles of Association; provided, however, that during the Period of Restriction, the Committee may apply any restrictions to any cash dividends otherwise payable with respect to such Shares while they are so held as the Committee deems appropriate. Except as set forth in the Award Agreement and subject to Applicable Law, in the event of (A) any adjustment as provided in Section 4.3, or (B) any shares or securities are received as a dividend, or an extraordinary dividend is paid in cash, on Shares of Restricted Stock, any new or additional Shares or securities or any extraordinary dividends paid in cash received by a recipient of Restricted Stock shall be subject to the same terms and conditions, including the Period of Restriction, as relate to the original Shares of Restricted Stock. (b) Restricted Stock Units. A Participant receiving Restricted Stock Units shall have the rights of a shareholder only as to Shares, if any, actually issued to such Participant upon expiration of the Period of Restriction and satisfaction or achievement of the terms and conditions of the Award, and in accordance with the provisions of the Plan and the applicable Award Agreement, and not with respect to Shares to which such Award relates but which are not actually issued to such Participant. Termination of Employment or Service. Except as otherwise provided in this Section 8.8, during the Period of Restriction, any Restricted Stock Units and/or Shares of Restricted Stock held by a Participant or its trustee (as applicable) that are subject to such Period of Restriction shall be forfeited and revert to the Company (or, if Shares of Restricted Stock were sold to the Participant, the Participant shall be required to resell such Shares to the Company at cost) upon the Participant’s Termination or the failure to meet or satisfy any applicable performance goals, vesting terms or other terms, conditions and restrictions to the extent set forth in the applicable Award Agreement. Each applicable Award Agreement shall set forth the extent to which, if any, the Participant shall have the right to retain Restricted Stock Units and/or Shares of Restricted Stock, then subject to the Period of Restriction, following such Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for, or circumstances of, such Termination. OTHER STOCK-BASED AWARDS 9.1. Other Stock-Based Awards. The Committee may grant types of equity-based or equity-related Awards not otherwise described by the terms of the Plan (including the grant or offer for sale of unrestricted Shares), in such amounts and subject to such terms and conditions, as the Committee shall determine. Such Other Stock-Based Awards may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares. The terms and conditions of such Awards shall be consistent with the Plan and set forth in the Award Agreement and need not be uniform among all such Awards or all Participants receiving such Awards. 9.2. Value of Other Stock-Based Awards. Each Other Stock-Based Award shall be expressed in terms of Shares or units based on Shares, as determined by the Committee. The Committee may establish performance goals in its discretion, and any such performance goals shall be set forth in the applicable Award Agreement. If the Committee exercises its discretion to establish performance goals, the number and/or value of Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which such performance goals are met.
9.3. Payment of Other Stock-Based Awards. Payment, if any, with respect to an Other Stock-Based Award shall be made in accordance with the terms of the Award, as set forth in the Award Agreement, in cash, Shares or a combination of cash and Shares, as the Committee determines. 9.4. Rights as a Shareholder. A Participant receiving an Other Stock-Based Award shall have the rights of a shareholder only as to Shares, if any, actually issued to such Participant upon satisfaction or achievement of the terms and conditions of the Award, and in accordance with the provisions of the Plan and the applicable Award Agreement, and not with respect to Shares to which such Award relates but which are not actually issued to such Participant. 9.5. Termination of Employment or Service. The Committee shall determine the extent to which the Participant shall have the right to receive Other Stock-Based Awards following the Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, such provisions may be included in the applicable Award Agreement, but need not be uniform among all Other Stock-Based Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for Termination. DIVIDEND EQUIVALENTS Unless otherwise provided by the Committee, no adjustment shall be made in the Shares issuable or taken into account under Awards on account of cash dividends that may be paid or other rights that may be issued to the holders of Shares prior to issuance of such Shares under such Award. The Committee may grant Dividend Equivalents based on the dividends declared on Shares that are subject to any Award, including any Award the payment or settlement of which is deferred pursuant to Section 18.5. Any Award of Dividend Equivalents may be credited as of the dividend payment dates, during the period between the Grant Date of the Award and the date the Award becomes payable or terminates or expires, as determined by the Committee. Dividend Equivalents may be subject to any limitations and/or restrictions determined by the Committee. Dividend Equivalents shall be converted to cash or additional Shares by such formula and at such time, and shall be paid at such times, as may be determined by the Committee. CASH-BASED AWARDS 11.1. Grant of Cash-Based Awards. Subject to the terms of the Plan, Cash-Based Awards may be granted to Participants in such amounts and upon such terms, and at any time and from time to time, as shall be determined by the Committee, in accordance with the Plan. A Cash-Based Award entitles the Participant who receives such Award to receive a payment in cash upon the attainment of applicable performance goals for the applicable performance period, and/or satisfaction of other terms and conditions, in each case determined by the Committee, and which shall be set forth in the Award Agreement. The terms and conditions of such Awards shall be consistent with the Plan and set forth in the Award Agreement and need not be uniform among all such Awards or all Participants receiving such Awards. 11.2. Earning and Payment of Cash-Based Awards. Cash-Based Awards shall become earned, in whole or in part, based upon the attainment of performance goals specified by the Committee and/or the occurrence of any event or events and/or satisfaction of such terms and conditions, including a Change of Control, as the Committee shall determine, either at or after the Grant Date. The Committee shall determine the extent to which any applicable performance goals and/or other terms and conditions of a Cash-Based Award are attained or not attained following conclusion of the applicable performance period. The Committee may, in its discretion, waive any such performance goals and/or other terms and conditions relating to any such Award. Payment of earned Cash-Based Awards shall be as determined by the Committee and set forth in the Award Agreement. 11.3. Termination of Employment or Service. Each Award Agreement shall set forth the extent to which the Participant shall have the right to retain Cash-Based Award following such Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for Termination.
TRANSFERABILITY OF AWARDS; BENEFICIARY DESIGNATION Transferability of Awards. Except as otherwise provided in Section 8.6 or Section 12.2 or a Participant’s Award Agreement or otherwise determined at any time by the Committee, no Award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution; provided that the Committee may permit further transferability, on a general or a specific basis, and may impose conditions and limitations on any permitted transferability, subject to any applicable Period of Restriction. Further, except as otherwise provided in a Participant’s Award Agreement or otherwise determined at any time by the Committee, or unless the Committee decides to permit further transferability, subject any applicable Period of Restriction, all Awards granted to a Participant under the Plan, and all rights with respect to such Awards, shall be exercisable or available during his or her lifetime only by or to such Participant. With respect to those Awards, if any, that are permitted to be transferred to another Person, references in the Plan to exercise or payment related to such Awards by or to the Participant shall be deemed to include, as determined by the Committee, the Participant’s permitted transferee. In the event any Award is exercised by or otherwise paid to the executors, administrators, heirs or distributees of the estate of a deceased Participant, or such a Participant’s beneficiary, or the transferee of an Award, in any such case, pursuant to the terms and conditions of the Plan and the applicable Agreement and in accordance with such terms and conditions as may be specified from time to time by the Committee, the Company shall be under no obligation to issue Shares thereunder unless and until the Company is satisfied, as determined in the discretion of the Committee, that the person or persons exercising such Award, or to receive such payment, are the duly appointed legal representative of the deceased Participant’s estate or the proper legatees or distributees thereof or the named beneficiary of such Participant, or the valid transferee of such Award, as applicable. Any purported assignment, transfer or encumbrance of an Award that does not comply with this Section 12.1 shall be void and unenforceable against the Company. Beneficiary Designation. Each Participant may, from time to time, name any beneficiary or beneficiaries who shall be permitted to exercise his or her Option or SAR or to whom any benefit under the Plan is to be paid in case of the Participant’s death before he or she fully exercises his or her Option or SAR or receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. In the absence of any such beneficiary designation, a Participant’s unexercised Option or SAR, or amounts due but remaining unpaid to such Participant, at the Participant’s death, shall be exercised or paid as designated by the Participant by will or by the laws of descent and distribution. RIGHTS OF PARTICIPANTS Rights or Claims. No person shall have any rights or claims under the Plan except in accordance with the provisions of the Plan and any applicable Award Agreement. The liability of the Company and any Affiliate under the Plan is limited to the obligations expressly set forth in the Plan, and no term or provision of the Plan may be construed to impose any further or additional duties, obligations, or costs on the Company or any Affiliate thereof or the Board or the Committee not expressly set forth in the Plan. The grant of an Award under the Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in the Plan as being applicable to such type of Award, or to all Awards, or as are expressly set forth in the Award Agreement evidencing such Award.
Without limiting the generality of the foregoing, neither the existence of the Plan nor anything contained in the Plan or in any Award Agreement shall be deemed to: (a) Give any Employee or Non-Employee Director the right to be retained in the service of the Company and/or an Affiliate, whether in any particular position, at any particular rate of compensation, for any particular period of time or otherwise; (b) Restrict in any way the right of the Company and/or an Affiliate to terminate, change or modify any Employee’s employment or any Non-Employee Director’s service as a Director at any time with or without cause; (c) Confer on any Consultant any right of continued relationship with the Company and/or an Affiliate, or alter any relationship between them, including any right of the Company or an Affiliate to terminate, change or modify its relationship with a Consultant; (d) Constitute a contract of employment or service between the Company or any Affiliate and any Employee, Non-Employee Director or Consultant, nor shall it constitute a right to remain in the employ or service of the Company or any Affiliate; (e) Give any Employee, Non-Employee Director or Consultant the right to receive any bonus, whether payable in cash or in Shares, or in any combination thereof, from the Company and/or an Affiliate, nor be construed as limiting in any way the right of the Company and/or an Affiliate to determine, in its sole discretion, whether or not it shall pay any Employee, Non-Employee Director or Consultant bonuses, and, if so paid, the amount thereof and the manner of such payment; or (f) Give any Participant any rights whatsoever with respect to an Award except as specifically provided in the Plan and the Award Agreement. Adoption of the Plan. The adoption of the Plan shall not be deemed to give any Employee, Non-Employee Director or Consultant or any other individual any right to be selected as a Participant or to be granted an Award, or, having been so selected, to be selected to receive a future Award. Vesting. Notwithstanding any other provision of the Plan, a Participant’s right or entitlement to exercise or otherwise vest in any Award not exercisable or vested at the time of grant shall only result from continued services as a Non-Employee Director or Consultant or continued employment, as the case may be, with the Company or any Affiliate, and/or satisfaction of any other performance goals or other conditions or restrictions applicable, by its terms, to such Award, except, in each such case, as the Committee may, in its discretion, expressly determine otherwise. Subject to the sole and absolute discretion and determination of the Committee, the Committee may decide to grant Awards under the Plan, the exercise or vesting of which, as applicable, shall be conditional upon the performance of the Company and/or an Affiliate and/or a division or other business unit of the Company or of an Affiliate and/or upon the performance of the Participant, over such period and measured against such objective criteria as shall be determined by the Committee and notified to the Participant No Effects on Benefits. Payments and other compensation received by a Participant under an Award are not part of such Participant’s normal or expected compensation or salary for any purpose, including calculating termination, indemnity, severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments under any laws, plans, contracts, arrangements or otherwise. No claim or entitlement to compensation or damages arises from the termination of the Plan or diminution in value of any Award or Shares purchased or otherwise received under the Plan. One or More Types of Awards. A particular type of Award may be granted to a Participant either alone or in addition to other Awards under the Plan. CHANGE OF CONTROL Treatment of Outstanding Awards. In the event of a Change of Control, each outstanding Award shall be treated as the Committee determines, including, without limitation, that each Award be honored or assumed, or equivalent rights substituted therefor, by the New Employer. References to the Committee in this Article XIV are to the Committee as constituted prior to the Change of Control. Notwithstanding any other provisions of the Plan to the contrary, in the event that the New Employer does not honor, assume or substitute for the Award in such Change of Control Transaction as described in Section 14.1(a), (1)(A) the Award shall become fully exercisable (as applicable), vested and nonforfeitable; (B) any Period of Restriction applicable to the Award shall lapse; and (C) any target performance goals applicable to the Award shall be deemed to have been attained in full (unless actual performance exceeds the target, in which case actual performance shall be used) and any other terms and condition applicable to the award shall be deemed met; and (2) in the case of an Option or Stock Appreciation Right, the Committee will notify the applicable Participant that the Option or Stock Appreciation Right will be exercisable for a period of time determined by the Committee in its discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.
For the purposes of this Article XIV, an Award shall be considered honored, assumed or substituted for if, following the Change of Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change of Control, the consideration (whether stock, cash, or other securities or property) received in the Change of Control transaction by holders of Shares for each Share held on the effective date of such transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in such transaction is not solely common stock of the New Employer, the Committee may, with the consent of the New Employer, if applicable, provide for the consideration to be received upon the exercise or payment of an Award, for each Share subject to such Award, to be solely common stock of the New Employer equal in fair market value, as determined by the Committee, to the per share consideration received by holders of Shares in such transaction. Notwithstanding anything in this Article XIV to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more performance goals will not be considered honor, assumed or substituted for if the Company or its successor or the New Employer modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals only to reflect any successor corporation’s post-Change of Control corporate structure will not be deemed to invalidate an otherwise valid honoring, assumption or substitution. No Implied Rights; Other Limitations. No Participant shall have any right to prevent the consummation of any of the acts described in Section 4.3 or 14.1 affecting the number of Shares available to, or other entitlement of, such Participant under the Plan or such Participant’s Award. Any actions or determinations of the Committee under this Article XIV need not be uniform as to all outstanding Awards, nor treat all Participants identically. AMENDMENT, MODIFICATION, AND TERMINATION Amendment and Termination of the Plan. The Board may, at any time and with or without prior notice, amend, alter, suspend or terminate the Plan, retroactively or otherwise, but no such amendment, alteration, suspension or termination of the Plan shall be made which would materially impair the previously accrued rights of any Participant with respect to a previously granted Award without such Participant’s consent, except any such amendment made to comply with applicable law, tax rules, stock exchange rules or accounting rules. In addition, no such amendment shall be made without the approval of the Company’s stockholders to the extent such approval is required by any applicable law, tax rules, stock exchange rules or accounting rules (including as necessary to comply with any rules or requirements of any securities exchange or inter-dealer quotation system on which the Shares may be listed or quoted). Amendment of Awards. Subject to the immediately following sentence, the Committee may unilaterally amend or alter the terms of any Award theretofore granted, including any Award Agreement, retroactively or otherwise, but no such amendment shall be inconsistent with the terms and conditions of the Plan or materially impair the previously accrued rights of the Participant to whom such Award was granted with respect to such Award without his or her consent, except such an amendment made to cause the Plan or such Award to comply with applicable law, tax rules, stock exchange rules or accounting rules. TAX WITHHOLDING AND OTHER TAX MATTERS Tax Withholding. The Company and/or any Affiliate are authorized to withhold from any Award granted or payment due under the Plan the amount of all taxes due in respect of such Award or payment and take any such other action as may be necessary or appropriate, as determined by the Committee, to satisfy all obligations for the payment of such taxes. No later than the date as of which an amount first becomes includible in the gross income or wages of a Participant for tax purposes with respect to any Award, such Participant shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any taxes or social security (or similar) contributions of any kind required by law to be withheld with respect to such amount.
The obligations of the Company under the Plan shall be conditional on such payment or satisfactory arrangements (as determined by the Committee in its discretion), and the Company and the Subsidiaries and Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to such Participant, whether or not under the Plan. Withholding or Tendering Shares. Without limiting the generality of Section 16.1, subject to compliance with Applicable Law, the Committee may in its discretion permit a Participant to satisfy or arrange to satisfy, in whole or in part, the tax obligations incident to an Award by: (a) electing to have the Company withhold Shares or other property otherwise deliverable to such Participant pursuant to his or her Award (provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy required withholding obligations using the minimum statutory withholding rates for tax purposes, including payroll taxes, that are applicable to supplemental taxable income) and/or (b) tendering to the Company Shares owned by such Participant (or by such Participant and his or her spouse jointly) and purchased or held for the requisite period of time as may be required to avoid the Company’s or the Affiliates’ incurring an adverse accounting charge, based, in each case, on the Fair Market Value of the Shares on the payment date as determined by the Committee. All such elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate. The Committee may establish such procedures as it deems appropriate, including making irrevocable elections, for settlement of withholding obligations with Shares or otherwise. Restrictions. The satisfaction of tax obligations pursuant to this Article XVI shall be subject to such restrictions as the Committee may impose, including any restrictions required by Applicable Law or the rules and regulations of the SEC, and shall be construed consistent with an intent to comply with any such Applicable Laws. No Guarantee of Favorable Tax Treatment. The Company does not warrant that any Award under the Plan will qualify for favorable tax treatment under any provision of any applicable law. The Company shall not be liable to any Participant for any tax, interest, or penalties the Participant might owe as a result of the grant, holding, vesting, exercise, or payment of any Award under the Plan. LIMITS OF LIABILITY; INDEMNIFICATION Limits of Liability. Any liability of the Company or an Affiliate to any Participant with respect to any Award shall be based solely upon contractual obligations created by the Plan and the Award Agreement. None of the Company, any Affiliate, any member of the Board or the Committee or any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability, in the absence of bad faith, to any party for any action taken or not taken in connection with the Plan, except as may expressly be provided by statute. Each member of the Committee, while serving as such, shall be considered to be acting in his or her capacity as a director of the Company. Members of the Board of Directors and members of the Committee acting under the Plan shall be fully protected in relying in good faith upon the advice of counsel and shall incur no liability except for gross negligence or willful misconduct in the performance of their duties. The Company shall not be liable to a Participant or any other person as to: (i) the non-issuance of Shares as to which the Company has been unable to obtain from any regulatory body having relevant jurisdiction the authority deemed by the Committee or the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, and (ii) any tax consequence expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Option or other Award. Indemnification.
Subject to the requirements and restrictions of Applicable Law and any separate indemnity agreement by and between the Company or any Affiliate and a respective member of the Committee or of the Board, or an officer of the Company, each individual who is or shall have been a member of the Committee or of the Board, or an officer of the Company to whom authority was delegated in accordance with Article III, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is a result of the individual’s own willful misconduct or except as provided by statute. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individual may be entitled under the Company’s Articles of Association, as a matter of law, or otherwise, or any power that the Company may have to indemnify or hold harmless such individual. MISCELLANEOUS Drafting Context. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. The words “Article,” “Section,” and “paragraph” herein shall refer to provisions of the Plan, unless expressly indicated otherwise. The words “include,” “includes,” and “including” herein shall be deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of similar import, unless the context otherwise requires. Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth therein or herein), (ii) references to any law, constitution, statute, treaty, regulation, rule or ordinance, including any section or other part thereof, shall refer to it as amended from time to time and shall include any successor thereof, and (iii) all references herein to Sections shall be construed to refer to Sections to the Plan The headings and captions appearing herein are inserted only as a matter of convenience. They do not define, limit, construe, or describe the scope or intent of the provisions of the Plan. Forfeiture / Clawback. The Committee may, in its discretion, specify in an Award Agreement or a policy that will be deemed incorporated into an Award Agreement by reference (regardless of whether such policy is established before or after the date of such Award Agreement), that a Participant’s rights, payments, and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture, rescission or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting, restrictions or performance conditions of an Award. Such events may include, but shall not be limited to, Termination with or without cause, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the Participant, or restatement of the Company’s financial statements to reflect adverse results from those previously released financial statements, as a consequence of errors, omissions, fraud, or misconduct. Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. Exercise and Payment of Awards. An Award shall be deemed exercised or claimed when the Secretary of the Company or any other Company official or other person designated by the Committee for such purpose receives appropriate written notice from a Participant, in form acceptable to the Committee, together with payment of the applicable Option Price, Grant Price or other purchase price, if any, and compliance with Article XVI, in accordance with the Plan and such Participant’s Award Agreement. Deferrals. Subject to applicable law, the Committee may from time to time establish procedures pursuant to which a Participant may defer on an elective or mandatory basis receipt of all or a portion of the cash or Shares subject to an Award on such terms and conditions as the Committee shall determine, including those of any deferred compensation plan of the Company or any Affiliate specified by the Committee for such purpose.
Loans. The Company may, in the discretion of the Committee, extend one or more loans to Participants in connection with the exercise or receipt of an Award granted to any such Participant; provided, however, that the Company shall not extend loans to any Participant if prohibited by Applicable Law or the rules of any stock exchange or quotation system on which the Company’s securities are listed. The terms and conditions of any such loan shall be established by the Committee. No Effect on Other Plans. Neither the adoption of the Plan nor anything contained herein shall affect any other compensation or incentive plans or arrangements of the Company or any Affiliate, or prevent or limit the right of the Company or any Affiliate to establish any other forms of incentives or compensation for their directors, officers, eligible employees or consultants or grant or assume options or other rights otherwise than under the Plan. Section 16 of Exchange Act. The provisions and operation of the Plan are intended to ensure that no transaction under the Plan is subject to (and not exempt from) the short-swing profit recovery rules of Section 16(b) of the Exchange Act. Unless otherwise stated in the Award Agreement, notwithstanding any other provision of the Plan, any Award granted to an Insider shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3) that are requirements for the application of such exemptive rule, and the Plan and the Award Agreement shall be deemed amended to the extent necessary to conform to such limitations. Requirements of Law; Limitations on Awards. The granting of Awards and the issuance of Shares under the Plan shall be subject to all Applicable Laws and to such approvals by any governmental agencies or national securities exchanges as may be required. If at any time the Committee shall determine, in its discretion, that the listing, registration and/or qualification of Shares upon any securities exchange or under any law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of Shares hereunder, the Company shall have no obligation to allow the grant, exercise or payment of any Award, or to issue or deliver evidence of title for Shares issued under the Plan, in whole or in part, unless and until such listing, registration, qualification, consent and/or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Committee. If at any time counsel to the Company shall be of the opinion that any sale or delivery of Shares pursuant to an Award is or may be in the circumstances unlawful or result in the imposition of excise taxes on the Company or any Affiliate under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act, or otherwise with respect to Shares or Awards and the right to exercise or payment of any Option or Award shall be suspended until, in the opinion of such counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company or any Affiliate. Upon termination of any period of suspension under this Section 18.9, any Award affected by such suspension which shall not then have expired or terminated shall be reinstated as to all Shares available before such suspension and as to the Shares which would otherwise have become available during the period of such suspension, but no suspension shall extend the term of any Award. The Committee may require each person receiving Shares in connection with any Award under the Plan to represent and agree with the Company in writing that such person is acquiring such Shares for investment without a view to the distribution thereof, and/or provide such other representations and agreements as the Committee may prescribe. The Committee, in its absolute discretion, may impose such restrictions on the ownership and transferability of the Shares purchasable or otherwise receivable by any person under any Award as it deems appropriate. Any such restrictions shall be set forth in the applicable Award Agreement, and the certificates evidencing such shares may include any legend that the Committee deems appropriate to reflect any such restrictions.
An Award and any Shares received upon the exercise or payment of an Award shall be subject to such other transfer and/or ownership restrictions and/or legending requirements under the Company's Articles of Association and/or as the Committee may establish in its discretion and may be referred to on the certificates evidencing such Shares, including restrictions under applicable securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares. Participants Deemed to Accept Plan. By accepting any benefit under the Plan, each Participant and each person claiming under or through any such Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Board, the Committee or the Company, in any case in accordance with the terms and conditions of the Plan. Governing Law. The Plan, all determinations made and actions taken pursuant hereto and, except as provided below or in an applicable subplan, each Award Agreement to a Participant shall be governed by the laws of the State of Israel, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction. Unless otherwise provided in the Award Agreement, Participants are deemed to submit to the exclusive jurisdiction and venue of the courts in Tel-Aviv, Israel, to resolve any and all issues that may arise out of or relate to the Plan or any related Award Agreement. Plan Unfunded. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of Shares or the payment of cash upon exercise or payment of any Award. Proceeds from the sale of Shares pursuant to Options or other Awards granted under the Plan shall constitute general funds of the Company. Administration Costs. The Company shall bear all costs and expenses incurred in administering the Plan, including expenses of issuing Shares pursuant to any Options or other Awards granted hereunder. Uncertificated Shares. To the extent that the Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may nevertheless be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange. No Fractional Shares. An Option or other Award shall not be exercisable with respect to a fractional Share or the lesser of fifty (50) shares or the full number of Shares then subject to the Option or other Award. No fractional Shares shall be issued upon the exercise or payment of an Option or other Award and any such fractions shall be rounded to the nearest whole number. Data Protection. By participating in the Plan, each Participant consents to the collection, processing, transmission and storage by the Company or any Affiliate, in any form whatsoever, of any data of a professional or personal nature which is necessary for the purposes of administering the Plan. The Company may share such information with any Affiliate, any trustee, its registrars, brokers, other third-party administrator or any person who obtains control of the Company or any Affiliate or any division respectively thereof. Right of Offset. The Company and any Affiliate shall have the right to offset against the obligations to make payment or issue any Shares to any Participant under the Plan, any outstanding amounts (including travel and entertainment advance balances, loans, tax withholding amounts paid by the employer or amounts repayable to the Company or any Affiliate pursuant to tax equalization, housing, automobile or other employee programs) such Participant then owes to the Company or any Affiliate and any amounts the Committee otherwise deems appropriate pursuant to any tax equalization policy or agreement. Participants. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws or practices of countries in which the Company and/or any Affiliate operates or has Employees, Non-Employee Directors or Consultants, the Committee, in its sole discretion, shall have the power and authority to: (a) Determine which Affiliates shall be covered by the Plan; (b) Determine which Employees, Non-Employee Directors and/or Consultants are eligible to participate in the Plan; (c) Grant Awards (including substitutes for Awards), and modify the terms and conditions of any Awards, on such terms and conditions as the Committee determines necessary or appropriate to permit participation in the Plan by individuals otherwise eligible to so participate, or otherwise to comply with applicable laws or conform to applicable requirements or practices of the applicable jurisdictions; (d) Establish Subplans and adopt or modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable.
Any subplans and modifications to Plan terms and procedures established under this Section 18.18 by the Committee shall be attached to the Plan as appendices; and (e) Take any action, before or after an Award is made, that the Committee, in its discretion, deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals. Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate any Applicable Law. Rules Particular to Specific Countries. Notwithstanding anything herein to the contrary, to the extent determined by the Committee, the terms and conditions of the Plan shall be adjusted with respect to a particular country or other jurisdiction by means of a Subplan to the Plan in the form of an appendix, and to the extent that the terms and conditions set forth in the Subplan conflict with any provisions of the Plan, the provisions of the Subplan shall govern. Terms and conditions set forth in the Subplan shall apply only to Awards granted to Participants under the jurisdiction of the specific country that is subject of the Subplan and shall not apply to any other Awards. * * * APPENDIX A – ISRAEL TO THE WIX.COM LTD. 2013 INCENTIVE COMPENSATION PLAN 1. GENERAL 1.1. This appendix (the: “Appendix”) shall apply only to Israeli Participants (as defined below). The provisions specified hereunder shall form an integral part of the Wix.com Ltd. 2013 Incentive Compensation Plan (hereinafter: the “Plan”, the “Company”), which applies to the issuance of Awards to employees, directors, consultants and service provides of the Company or its Affiliates. 1.2. This Appendix is effective with respect to Awards granted as of 30 days from the date it was submitted with the ITA and shall comply with Section 102 (as defined below). 1.3. This Appendix is to be read as a continuation of the Plan and only modifies Awards granted to Israeli Participants (as defined below) so that they comply with the requirements set by the Israeli law in general, and in particular with the provisions of Section 102 (as specified herein), as may be amended or replaced from time to time. For the avoidance of doubt, this Appendix does not add to or modify the Plan in respect of any other category of Participants. 1.4. The Plan and this Appendix are complimentary to each other and shall be deemed as one. Subject to Section 1.3 above, in any case of contradiction, whether explicit or implied, between any definitions and/or provisions of this Appendix and the Plan, the provisions set out in this Appendix shall prevail. 1.5. Any capitalized terms not specifically defined in this Appendix shall be construed according to the interpretation given to it in the Plan. 2. DEFINITIONS 2.1. “Affiliate” means any “employing company” within the meaning of Section 102(a) of the Ordinance. 2.2. “Approved 102 Award” means an Award granted pursuant to Section 102(b) of the Ordinance and held in trust by a Trustee for the benefit of the Employee. 2.3. “Capital Gain Award (CGA)” means an Approved 102 Award elected and designated by the Company to qualify under the capital gain tax treatment in accordance with the provisions of Section 102(b)(2) of the Ordinance. 2.4. “Controlling Shareholder” shall have the meaning ascribed to it in Section 102 of the Ordinance. 2.5. “Employee” means an Israeli Participant who is employed by the Company or its Affiliates, including an individual who is serving as an “office holder” as define din the Israeli Companies Law, 1999, as amended from time to time, but excluding any Controlling Shareholder. 2.6. “Israeli Participant” means a person who is a resident of the state of Israel or who is deemed to be a resident of the state of Israel for Israeli tax purposes, and receives or holds an Award under the Plan and this Appendix. 2.7. “ITA” means the Israeli Tax Authorities. 2.8. “Ordinary Income Award (OIA)” means an Approved 102 Award elected and designated by the Company to qualify under the ordinary income tax treatment in accordance with the provisions of Section 102(b)(1) of the Ordinance.
2.9. “102 Award” means any Award granted to Employees pursuant to Section 102 of the Ordinance and any other rulings, procedures and clarifications promulgated thereunder or issued by the ITA. 2.10. “3(i) Award” means an Award granted pursuant to Section 3(i) of the Ordinance to any person who is a Non- Employee. 2.11. “Israeli Award Agreement” notwithstanding Section 2.4 of the Plan, for the purpose of this Appendix, Israeli Award Agreement shall mean a written agreement entered into and signed by the Company and an Israeli Participant that sets out the terms and conditions of an Award. 2.12. “Non-Employee” means an Israeli Participant who is a consultant, adviser, service provider, Controlling Shareholder or any other person who is not an Employee. 2.13. “Ordinance” means the Israeli Income Tax Ordinance [New Version] 1961 as now in effect or as hereafter amended. 2.14. “Section 102” means section 102 of the Ordinance, the Income Tax Rules (Tax Relief for Issuance of Shares to Employees), 2003, and any other rules, regulations, orders or procedures promulgated thereunder as now in effect or as hereafter amended. 2.15. “Trustee” means any person appointed by the Company to serve as a trustee and approved by the ITA, all in accordance with the provisions of Section 102(a) of the Ordinance. 2.16. “Unapproved 102 Award” means an Award granted pursuant to Section 102(c) of the Ordinance and not held in trust by a Trustee. 3. ISSUANCE OF AWARDS 3.1. Notwithstanding Article V of the Plan and in addition thereto, any Israeli Participants eligible for participation in the Plan and this Appendix as Israeli Participants shall include any Employee and/or Non-Employee of the Company or of any of the Company’s Affiliates; provided, however, that (i) Employees may only be granted 102 Awards; and (ii) Non-Employees and/or Controlling Shareholders may only be granted 3(i) Awards. 3.2. The Company may designate Awards granted to Employees pursuant to Section 102 as Unapproved 102 Awards or Approved 102 Awards. 3.3. The grant of Approved 102 Awards shall be made under this Appendix, and shall be conditioned upon the approval of this Appendix by the ITA. 3.4. Approved 102 Awards may either be classified as Capital Gain Awards (“CGAs”) or Ordinary Income Awards (“OIAs”). 3.5. No Approved 102 Awards may be granted under this Appendix to any eligible Employee, unless and until, the Company’s election of the type of Approved 102 Awards as CGA or OIA granted to Employees (the “Election”), is appropriately filed with the ITA. Such Election shall become effective beginning the first date of grant of an Approved 102 Award under this Appendix and shall remain in effect until the end of the year following the year during which the Company first granted Approved 102 Awards. The Election shall obligate the Company to grant only the type of Approved 102 Award it has elected, and shall apply to all Israeli Participants who were granted Approved 102 Awards during the period indicated herein, all in accordance with the provisions of Section 102(g) of the Ordinance. For the avoidance of doubt, such Election shall not prevent the Company from granting Unapproved 102 Awards simultaneously. 3.6. All Approved 102 Awards must be held in trust by a Trustee, as described in Section 4 below. 3.7. For the avoidance of doubt, the designation of Unapproved 102 Awards and Approved 102 Awards shall be subject to the terms and conditions set forth in Section 102. 4. TRUSTEE 4.1. The terms and conditions applicable to the trust relating to Section 102 shall be set forth in an agreement signed by the Company and the Trustee (the “Trust Agreement”). 4.2. Approved 102 Awards which shall be granted under this Appendix and/or any Shares allocated or issued upon exercise or vesting of such Approved 102 Awards and/or other rights granted thereunder and/or shares received subsequently following any realization of rights, including without limitation bonus shares, shall be allocated or issued to the Trustee and held for the benefit of the Employee for no less than such period of time as required by Section 102 (the “Holding Period”). In case the requirements for Approved 102 Awards are not met, then the Approved 102 Awards shall be regarded as Unapproved 102 Awards, all in accordance with the provisions of Section 102. 4.3. Notwithstanding anything to the contrary, the Trustee shall not release any Shares allocated or issued upon exercise or vesting of Approved 102 Awards prior to the full payment of the Employee’s tax liabilities, if any, arising from Approved 102 Awards which were granted to him/her and/or any Shares allocated or issued upon exercise or vesting of such Awards.
4.4. With respect to any Approved 102 Award, subject to the provisions of Section 102, an Israeli Participant shall not sell or release from trust any Share received upon the exercise or vesting of an Approved 102 Award and/or any rights granted thereunder and/or share received subsequently following any realization of rights, including without limitation, bonus shares, until the lapse of the Holding Period required under Section 102. Notwithstanding the above, if any such sale or release occurs during the Holding Period, the sanctions under Section 102 shall apply to and shall be borne solely by such Israeli Participant. Subject to the foregoing, the Trustee may, pursuant to a written or electronic request from the Participant, release and transfer such Shares to a designated third party, provided that both of the following conditions have been fulfilled prior to such release or transfer: (i) payment has been made to the ITA of all taxes required to be paid upon the release and transfer of the Shares, and confirmation of such payment has been received by the Trustee and (ii) the Trustee has confirmed with the Company that all requirements for such release and transfer have been fulfilled according to the terms of the Company’s corporate documents, the Plan, the Israeli Award Agreement and any Applicable Law. 4.5. Upon receipt of any Approved 102 Award, if requested to do so by the Company. Affiliate or the Trustee, the Employee will sign an undertaking to release the Trustee from any liability in respect of any action or decision duly taken and bona fide executed in relation with this Appendix, or any Approved 102 Award or Share granted to him thereunder. 4.6. Without derogating from the provisions of Article XVI of the Plan, the provisions of Section 16.1 of the Plan shall apply also to the Trustee. Accordingly, Trustee shall also have withholding rights as further described in Section 16.1 of the Plan. 4.7. In the case of 102 Awards, the Trustee shall have no rights as a shareholder of the Company with respect to the Shares covered by such Award until the Trustee becomes the record holder for such Shares for the Participant’s benefit, and the Israeli Participant shall have no rights as a shareholder of the Company with respect to the Shares covered by the Award until the date of the release of such Shares from the Trustee to the Israeli Participant and the transfer of record ownership of such Shares to the Israeli Participant. 5. THE AWARDS Notwithstanding anything to the contrary in the Plan and in addition thereto, the terms and conditions upon which the Awards shall be issued and exercised or vest, as applicable, shall be as specified in the Israeli Award Agreement to be executed pursuant to the Plan and to this Appendix. Each Israeli Award Agreement shall be subject to Section 102 or Section 3(i) of the Ordinance, as applicable, and shall state, inter alia, the number of Shares to which the Award relates, the type of Award granted thereunder (whether a CGA, OIA, Unapproved 102 Award or a 3(i) Award), and any applicable vesting provisions and exercise price that may be payable. 6. FAIR MARKET VALUE Without derogating from Section 2.18 of the Plan and solely for the purpose of determining the tax liability pursuant to Section 102(b)(3) of the Ordinance, if at the date of grant of any CGA, the Company’s Shares are listed on any established stock exchange or a national market system or if the Company’s Shares will be registered for trading within ninety (90) days following the date of grant of the CGAs, the fair market value of the Shares at the date of grant shall be determined in accordance with the average value of the Company’s Shares on the thirty (30) trading days preceding the date of grant or on the thirty (30) trading days following the date of registration for trading, as the case may be. 7. EXERCISE OF AWARDS THAT ARE OPTIONS TO PURCHASE SHARES Awards that represent options to purchase Shares shall be exercised by the Israeli Participant by giving a written or electronic notice to the Company and/or to any third party designated by the Company (the “Representative”), in such form and method as may be determined by the Company and, when applicable, by the Trustee, in accordance with the requirements of Section 102, which exercise shall be effective upon receipt of such notice by the Company and/or the Representative and the payment of the exercise price for the number of Shares with respect to which the Award is being exercised, at the Company’s or the Representative’s principal office.
The notice shall specify the number of Shares with respect to which the Award is being exercised. 8. ASSIGNABILITY AND SALE OF AWARDS 8.1. Notwithstanding any other provision of the Plan, no Award or any right with respect thereto, or purchasable hereunder, whether fully paid or not, shall be assignable, transferable or given as collateral or any right with respect to them given to any third party whatsoever, and during the lifetime of the Israeli Participant each and all of such Israeli Participant's rights with respect to an Award shall belong only to the Israeli Participant. Any such action made directly or indirectly, for an immediate validation or for a future one, shall be void. 8.2. As long as Awards or Shares purchased or issued hereunder are held by the Trustee on behalf of the Israeli Participant, all rights of the Israeli Participant over the Awards and/or Shares are personal, cannot be transferred, assigned, pledged or mortgaged, other than by will or laws of descent and distribution, provided that the transferee thereof shall be subject to the provisions of Section 102 as would have been applicable to the deceased Participant were he or she to have survived. 9. INTEGRATION OF SECTION 102 AND TAX ASSESSING OFFICER’S PERMIT 9.1. With regards to Approved 102 Awards, the provisions of the Plan and/or the Appendix and/or the Israeli Award Agreement shall be subject to the provisions of Section 102 and the Tax Assessing Officer’s permit and/or any pre-rulings obtained by the ITA, and the said provisions, permit and/or pre-rulings shall be deemed an integral part of the Plan and of the Appendix and of the Israeli Award Agreement. 9.2. Any provision of Section 102 and/or the said permit and/or pre-rulings which is necessary in order to receive and/or to keep any tax benefit pursuant to Section 102, which is not expressly specified in the Plan or the Appendix or the Israeli Award Agreement, shall be considered binding upon the Company and the Israeli Participants. 10. DIVIDEND Notwithstanding anything to the contrary in the Plan and solely for the purpose of Awards granted under this Appendix, with respect to all Shares (but excluding, for avoidance of any doubt, any unexercised Awards) allocated or issued upon the exercise or vesting of Awards purchased or received, as applicable, by the Israeli Participant and held by the Israeli Participant or by the Trustee, as the case may be, the Israeli Participant shall be entitled to receive dividends, if any, in accordance with the quantity of such Shares, subject to the provisions of the Company’s Articles of Association (and all amendments thereto) and subject to any applicable taxation on distribution of dividends, and when applicable subject to the provisions of Section 102. 11. VOTING RIGHTS Subject to Sections 6.7, 7.8, 8.7 and 9.4 of the Plan, so long as any Shares issued to the Trustee on behalf of an Israeli Participant, under this Appendix, to the extent Trustee decides in its sole discretion to vote such Shares, then unless the Trustee is directed otherwise by the Board, such Shares shall be voted in the same proportion as the result of the shareholder vote at the shareholders meeting or written consent in respect of which the Shares held by the Trustee are being voted. However, the Trustee shall not be obligated to exercise such voting rights nor notify the Israeli Participant of any meeting of the Company's shareholders. 12. TAX CONSEQUENCES 12.1. Notwithstanding anything to the contrary in Article XVI of the Plan and solely for the purpose of Awards granted under this Appendix, any tax consequences arising from the grant, exercise or vesting of any Award, from the payment for Shares covered thereby or from any other event or act (of the Company, and/or its Affiliates, and the Trustee or the Israeli Participant), hereunder, shall be borne solely by the Israeli Participant. The Company and/or its Affiliates, and/or the Trustee shall withhold taxes according to the requirements under Applicable Law, including withholding taxes at source. Furthermore, the Israeli Participant hereby agrees to indemnify the Company and/or its Affiliates and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty or indexation thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Israeli Participant.
12.2. The Company and/or, when applicable, the Trustee shall not be required to release any share certificate to a Israeli Participant until all required payments have been fully made. 12.3. With respect to Unapproved 102 Award, if the Israeli Participant ceases to be employed by the Company or any Affiliate, the Israeli Participant shall extend to the Company and/or its Affiliate a security or guarantee for the payment of tax due at the time of sale of Shares, all in accordance with the provisions of Section 102 and the rules, regulation or orders promulgated thereunder. 12.4. Each Participant agrees to, and undertakes to comply with, any ruling, settlement, closing agreement or other similar agreement or arrangement with any tax authority in connection with the foregoing which is approved by the Company. 13. ISRAELI PARTICIPANT'S UNDERTAKINGS By receiving Awards under the Plan and this Appendix, the Israeli Participant (1) agrees and acknowledges that he or she have received and read the Plan, the Appendix and the Israeli Award Agreement; (2) undertakes to comply with all the provisions set forth in: Section 102 (including provisions regarding the applicable Tax Track that the Company has selected) or Section 3(i), as applicable, the Plan, the Appendix, the Israeli Award Agreement and the Trust Agreement; and (3) if the Awards are granted under Section 102, the Israeli Participant undertakes, subject to the provisions of Section 102, not to sell or release the Shares from trust before the end of the Holding Period. The Israeli Participant agrees to execute any and all documents that the Company and/or its Affiliates and/or the Trustee may reasonably determine to be necessary in order to comply with the Ordinance, ruling or guidelines and rules issued by the ITA. 14. TERM OF PLAN AND APPENDIX Notwithstanding anything to the contrary in Article XV of the Plan and in addition thereto, the Company shall obtain all approvals for the adoption of this Appendix or for any amendment to this Appendix as are necessary to comply with (i) any Applicable Law, including without limitation U.S. securities laws and the securities laws of any other jurisdiction applicable to Awards granted to Israeli Participant under this Appendix, (ii) any national securities exchange on which the Shares are traded, and (iii) any applicable rules and regulations promulgated by the U.S. Securities and Exchange Commission. 15. GOVERNING LAW & JURISDICTION This Appendix shall be governed by and construed and enforced in accordance with the laws of the State of Israel applicable to contracts made and to be performed therein, without giving effect to the principles of conflict of laws. The competent courts in Tel Aviv shall have sole jurisdiction in any matters pertaining to this Appendix. 16. NO PAYMENT FOR RESTRICTED STOCK UNITS Other than the par value of any Shares issuable upon settlement of a Restricted Stock Unit, no payment of cash by a Participant shall be required as consideration for Restricted Stock Units. * * *
APPENDIX B – UNITED STATES
TO THE WIX.COM LTD. 2013 INCENTIVE COMPENSATION PLAN 1. Special Provisions for U.S. Taxpayers 1.1. This Appendix (this “Appendix”) to the Wix.com Ltd. 2013 Incentive Compensation Plan (the “Plan”) was adopted by the Board pursuant to Section 18.18 of the Plan. This Appendix shall become effective on the Effective Date. 1.2. The provisions of this Appendix apply only to Participants who are subject to U.S. federal income tax (any such Participant, a “U.S. Taxpayer”). 1.3. This Appendix is to be read as a continuation of the Plan and only applies with respect to Options and other Awards granted under the Plan to U.S. Taxpayers. The purpose of this Appendix is to establish certain rules and limitations applicable to Options and other Awards that may be granted or issued under the Plan to U.S. Taxpayers from time to time, in compliance with applicable tax, securities and other applicable laws currently in force. For the avoidance of doubt, this Appendix does not add to or modify the Plan in respect of any other category of Israeli Participants (as defined in Appendix A to the Plan).
1.4. The Plan and this Appendix are complimentary to each other and shall be deemed as one. Subject to Section 1.3 of this Appendix, in any case of contradiction, whether explicit or implied, between any definitions and/or provisions of this Appendix and the Plan, the provisions set out in this Appendix shall prevail. 1.5 Section references in this Appendix shall refer to Sections of the Plan, unless expressly indicated otherwise. 2. Definitions
TO THE
WIX.COM LTD.
2013 INCENTIVE COMPENSATION PLAN
1. Special Provisions for U.S. Taxpayers
1.1. This Appendix (this “Appendix”) to the Wix.com Ltd. 2013 Incentive Compensation Plan (the “Plan”) was adopted by the Board pursuant to Section 18.18 of the Plan. This Appendix shall become effective on the Effective Date.
1.2. The provisions of this Appendix apply only to Participants who are subject to U.S. federal income tax (any such Participant, a “U.S. Taxpayer”).
1.3. This Appendix is to be read as a continuation of the Plan and only applies with respect to Options and other Awards granted under the Plan to U.S. Taxpayers. The purpose of this Appendix is to establish certain rules and limitations applicable to Options and other Awards that may be granted or issued under the Plan to U.S. Taxpayers from time to time, in compliance with applicable tax, securities and other applicable laws currently in force. For the avoidance of doubt, this Appendix does not add to or modify the Plan in respect of any other category of Israeli Participants (as defined in Appendix A to the Plan).
1.4. The Plan and this Appendix are complimentary to each other and shall be deemed as one. Subject to Section 1.3 of this Appendix, in any case of contradiction, whether explicit or implied, between any definitions and/or provisions of this Appendix and the Plan, the provisions set out in this Appendix shall prevail.
1.5 Section references in this Appendix shall refer to Sections of the Plan, unless expressly indicated otherwise.
2. Definitions
Capitalized terms not otherwise defined herein shall have the meaning assigned to them in the Plan. The following additional definitions will apply to grants made pursuant to this Appendix, provided, however, that to the extent that such definitions are provided for in the Plan and this Appendix, the definitions in this Appendix shall apply to Awards granted to U.S. Taxpayers:
2.1. “Code” means the United States Internal Revenue Code of 1986, as it may be amended from time to time, including rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto.
2.2. “Disability” means for purposes of any ISO, a “permanent and total disability” as defined in Section 22(e)(3) of the Code.
2.3. “Fair Market Value” has the meaning assigned to such term in the Plan; provided that the Committee shall determine Fair Market Value in a manner that satisfies the applicable requirements of Code Sections 409A and 422.
2.4. “Incentive Stock Option” or “ISO” means a right to purchase Shares under the Plan in accordance with the terms and conditions set forth in Article VI of the Plan and which is designated as an Incentive Stock Option and which is intended to meet the requirements of Section 422 of the Code.
2.5. “Nonqualified Stock Option” or “NQSO” means a right to purchase Shares under the Plan in accordance with the terms and conditions set forth in Article VI of the Plan and which is not intended to meet the requirements of Section 422 of the Code or otherwise does not meet such requirements.
2.6. “Subsidiary” means any present or future corporation which is or would be a “subsidiary corporation” of the Company as the term is defined in Section 424(f) of the Code.
3. Incentive Stock Options
3.1. Any Substitute Awards granted under the Plan shall be subject to compliance with the ISO rules under Code Section 422 and the nonqualified deferred compensation rules under Code Section 409A, where applicable.
3.2. The provisions of Section 4.2 of the Plan shall, in the case of ISOs, be subject to any limitations applicable thereto under the Code.
3.3. The total number of Shares that may be delivered pursuant to Incentive Stock Options granted under the Plan shall be the number of Shares set forth in Section 4.1 of the Plan, as adjusted pursuant to Section 4.2 of the Plan, but without application of Section 4.2(d).
3.4. The Committee shall determine any adjustment, substitution or change pursuant to Section 4.3 of the Plan after taking into account, among other things, to the extent applicable, the provisions of the Code applicable to Incentive Stock Options and the provisions of Section 409A of the Code.
3.5. Each Award Agreement relating to an Option shall specify whether such Option is intended to be a ISO or an NQSO. To the extent that any Option granted to a U.S. Taxpayer does not qualify as an ISO (whether because of its provisions or the time or manner of its exercise or otherwise), such Option, or the portion thereof which does not so qualify, shall constitute a separate NQSO.
3.6. The last sentence of Section 6.5 shall not apply to ISOs.
3.7. The right to make a payment of the Option Price of an Incentive Stock Option in the form of already owned Shares, under Section 6.6(a) of the Plan, may be authorized only as of the grant date of such Incentive Stock Option.
3.8. No ISO shall be granted to any individual otherwise eligible to participate in the Plan who is not an Employee of the Company or a Subsidiary on the date of granting of such Option. Any ISO granted under the Plan shall contain such terms and conditions, consistent with the Plan, as the Committee may determine to be necessary to qualify such Option as an “incentive stock option” under Section 422 of the Code. Any ISO granted under the Plan may be modified by the Committee to disqualify such Option from treatment as an “incentive stock option” under Section 422 of the Code.
3.9. Notwithstanding any intent to grant ISOs, an Option granted under the Plan will not be considered an ISO to the extent that it, together with any other “incentive stock options” (within the meaning of Section 422 of the Code, but without regard to subsection (d) of such Section) under the Plan and any other “incentive stock option” plans of the Company, any Subsidiary and any “parent corporation” of the Company within the meaning of Section 424(e) of the Code, are exercisable for the first time by any Participant during any calendar year with respect to Shares having an aggregate Fair Market Value in excess of $100,000 (or such other limit as may be required by the Code) as of the time the Option with respect to such Shares is granted. The rule set forth in the preceding sentence shall be applied by taking Options into account in the order in which they were granted.
3.10. No ISO shall be granted to an individual otherwise eligible to participate in the Plan who owns (within the meaning of Section 424(d) of the Code), at the time the Option is granted, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or a Subsidiary or any “parent corporation” of the Company within the meaning of Section 424(e) of the Code. This restriction does not apply if at the time such ISO is granted the Option Price of the ISO is at least 110% of the Fair Market Value of a Share on the date such ISO is granted, and the ISO by its terms is not exercisable after the expiration of five years from such date of grant.
3.11. Notwithstanding any other provision of the Plan to the contrary, with respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR will expire no later than the expiration of the related ISO; (ii) the value of the payment with respect to the Tandem SAR may not exceed the difference between the Fair Market Value of the Shares subject to the related ISO at the time the Tandem SAR is exercised and the Option Price of the related ISO; and (iii) the Tandem SAR may be exercised only when the Fair Market Value of the Shares subject to the ISO exceeds the Option Price of the ISO.
3.12. No ISO or Tandem SAR granted in connection with an ISO may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution or in accordance with Section 12.2 of the Plan. Further, all ISOs and Tandem SARs granted in connection with ISOs granted to a Participant shall be exercisable during his or her lifetime only by such Participant.
3.13. The Committee may require a Participant to give prompt written notice to the Company concerning any disposition of Shares received upon the exercise of an ISO within: (i) two (2) years from the date of granting such ISO to such Participant or (ii) one (1) year from the transfer of such Shares to such Participant or (iii) such other period as the Committee may from time to time determine. The Committee may direct that a Participant with respect to an ISO undertake in the applicable Award Agreement to give such written notice described in the preceding sentence, at such time and containing such information as the Committee may prescribe, and/or that the certificates evidencing Shares acquired by exercise of an ISO refer to such requirement to give such notice.
4. GRANT DATE FAIR MARKET OPTION PRICE AND GRANT PRICE
No Option or SAR shall be granted pursuant to this Appendix unless the Option Price of such Option or the Grant Price of such SAR, as the case may be, shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date of such Option or SAR.
5. Deferred Compensation
5.1. It is the intention of the Company that no Award shall be deferred compensation subject to Code Section 409A unless and to the extent that the Committee specifically determines otherwise as provided in Section 5.2 of this Appendix, and the Plan and the terms and conditions of all Awards shall be interpreted and administered accordingly
5.2. The terms and conditions governing any Awards that the Committee determines will be subject to Section 409A of the Code, including any rules for payment or elective or mandatory deferral of the payment or delivery of Shares or cash pursuant thereto, and any rules regarding treatment of such Awards in the event of a Change of Control, shall be set forth in the applicable Award Agreement and shall be intended to comply in all respects with Section 409A of the Code, and the Plan and the terms and conditions of such Awards shall be interpreted and administered accordingly.
5.3. The Committee shall not extend the period to exercise an Option or Stock Appreciation Right to the extent that such extension would cause the Option or Stock Appreciation Right to become subject to Code Section 409A.
5.4. No Dividend Equivalents shall relate to Shares underlying an Option or SAR unless such Dividend Equivalent rights are explicitly set forth as a separate arrangement and do not cause any such Option or SAR to be subject to Code Section 409A.
1.1.The Company shall have complete discretion to interpret and construe the Plan and any Award Agreement in any manner that establishes an exemption from (or compliance with) the requirements of Code Section 409A. If for any reason, such as imprecision in drafting, any provision of the Plan and/or any Award Agreement does not accurately reflect its intended establishment of an exemption from (or compliance with) Code Section 409A, as demonstrated by consistent interpretations or other evidence of intent, such provision shall be considered ambiguous as to its exemption from (or compliance with) Code Section 409A and shall be interpreted by the Company in a manner consistent with such intent, as determined in the discretion of the Company.
If, notwithstanding the foregoing provisions of this Section 5.5, any provision of the Plan or any Award Agreement would cause a Participant to incur any additional tax or interest under Code Section 409A, the Company shall reform such provision in a manner intended to avoid the incurrence by such Participant of any such additional tax or interest; provided that the Company shall maintain, to the extent reasonably practicable, the original intent and economic benefit to the Participant of the applicable provision without violating the provisions of Code Section 409A.
5.6. Notwithstanding the provisions of Section 4.3 to the contrary, (1) any adjustments made pursuant to Section 4.3 to Awards that are considered “deferred compensation” subject to Section 409A of the Code shall be made in compliance with the requirements of Section 409A of the Code; (2) any adjustments made pursuant to Section 4.3 to Awards that are not considered “deferred compensation” subject to Section 409A of the Code shall be made in such a manner as to ensure that after such adjustment, the Awards either (A) continue not to be subject to Section 409A of the Code or (B) comply with the requirements of Section 409A of the Code; and (3) in any event, neither the Committee nor the Board shall have any authority to make any adjustments, substitutions or changes pursuant to Section 4.3 to the extent the existence of such authority would cause an Award that is not intended to be subject to Section 409A of the Code at the Grant Date thereof to be subject to Section 409A of the Code.
5.7. If any Award is subject to Section 409A of the Code, the provisions of Article XIV shall be applicable to such Award only to the extent specifically provided in the Award Agreement and permitted pursuant to Section 5.2 of this Appendix.
6. Section 83(b) Election
If a Participant makes an election under Section 83(b) of the Code to be taxed with respect to an Award as of the date of transfer of Shares rather than as of the date or dates upon which the Participant would otherwise be taxable under Section 83(a) of the Code, such Participant shall deliver a copy of such election to the Company prior to filing such election with the United States Internal Revenue Service. Neither the Company nor any Affiliate shall have any liability or responsibility relating to or arising out of the filing or not filing of any such election or any defects in its construction.
7. ADJUSTMENTS
The Committee shall determine any adjustment pursuant to Section 4.3: (i) after taking into account, among other things, to the extent applicable, the provisions of the Code applicable to Incentive Stock Options and (ii) subject to Section 5.6 of this Appendix.
8. Governing Law and Jurisdiction
This Appendix shall be governed by and construed and enforced in accordance with the laws of the State of Israel applicable to contracts made and to be performed therein, except with respect to matters that are subject to tax laws, regulations and rules in any specific jurisdiction, which shall be governed by the respective laws, regulations and rules of such jurisdiction. Unless otherwise provided in the Award Agreement, Participants are deemed to submit to the exclusive jurisdiction and venue of the courts in Tel-Aviv, Israel, to resolve any and all issues that may arise out of or relate to this Appendix or any related Award Agreement.
* * *
EX-4.3
4
a20-fxexhibit43x2025.htm
EX-4.3
Document
EXHIBIT 4.3
WIX.COM LTD.
AMENDED AND RESTATED 2013 EMPLOYEE STOCK PURCHASE PLAN
(amended and restated effective as of July 29, 2025)
1. Purpose. The purpose of the Plan is to provide incentive for present and future eligible Participants to acquire equity interests (or increase existing equity interests) in the Company through the purchase of Shares. The Plan consists of two components: the Section 423 Component and the Non-Section 423 Component. It is the Company’s intention that the Section 423 Component qualify as an “employee stock purchase plan” under Section 423 of the Code, and, accordingly, the provisions of the Section 423 Component shall be administered, interpreted and construed in a manner consistent with the requirements of that section of the Code, except to the extent provided pursuant to Section 16(n). In addition, this Plan authorizes the grant of options under the Non-Section 423 Component, which need not qualify as options granted pursuant to an “employee stock purchase plan” under Section 423 of the Code; such options granted under the Non-Section 423 Component shall be granted pursuant to separate Offerings containing such sub-plans, appendices, rules or procedures as may be adopted by the Committee and designed to achieve tax, securities laws or other objectives for eligible Employees and the Designated Subsidiaries in locations outside of the U.S. Except as otherwise provided herein, the Non-Section 423 Component will operate and be administered in the same manner as the Section 423 Component. Offerings intended to be made under the Non-Section 423 Component will be designated as such by the Committee at or prior to the time of such Offering.
For purposes of this Plan, the Committee may designate separate Offerings under the Plan, the terms of which need not be identical, in which eligible Participants will participate, even if the dates of the applicable Exercise Period(s) in each such Offering is identical, provided that the terms of participation are the same within each separate Offering under the Section 423 Component as determined under Section 423 of the Code.
2. Definitions.
(a) “Applicable Exchange” means the NASDAQ Stock Market or such other securities exchange or inter-dealer quotation system as may at the applicable time be the principal market for the Shares.
(b) “Applicable Percentage” means the percentage specified in Section 6(b), subject to adjustment by the Committee as provided in Section 6(b).
(c) “Board” means the Board of Directors of the Company.
(d) “Code” means the United States Internal Revenue Code of 1986, as amended, and any successor thereto.
(e) “Committee” means the committee appointed by the Board to administer the Plan as described in Section 14 or, in the absence of a committee, the Board.
(f) “Company” means Wix.com Ltd., an Israeli company, or any successor thereto.
(g) “Company Transaction” has the meaning given such term in Section 13(b)(iii).
(h) “Compensation” means, with respect to each Participant who is an Employee for each pay period: base salary, wages, overtime, and shift premium paid to such Participant by the Company or a Designated Subsidiary. Except as otherwise determined by the Committee, “Compensation” does not include: (i) any amounts contributed by the Company or a Designated Subsidiary to any pension plan, (ii) any automobile, relocation or housing allowances, or reimbursement for any expenses, including automobile, relocation or housing expenses, (iii) any amounts paid as a bonus, including a starting bonus, referral fee, annual bonus, relocation bonus, or sales incentives or commissions, (iv) any amounts realized from the exercise of any stock options or incentive awards, (v) any amounts paid by the Company or a Designated Subsidiary for other fringe benefits, such as health and welfare, hospitalization and group life insurance benefits, disability pay, or perquisites, or paid in lieu of such benefits, or (vi) other similar forms of extraordinary compensation. “Compensation” means, with respect to each Participant who is a Consultant, for each period covered by an invoice or, in respect to Consultants paid on retainer, each period for which such retainer is paid, all fees and retainers paid to such Participant, but excluding (i) any reimbursement for any expenses, including automobile, equipment, travel, and the like; (ii) any amounts paid as a bonus, including a starting bonus, referral fee, annual bonus, relocation bonus, or sales incentives or commissions, (iii) any amounts realized from the exercise of any stock options or incentive awards, (iv) any amounts paid by the Company or a Designated Subsidiary for other fringe benefits, such as health and welfare, hospitalization and group life insurance benefits, disability pay, or perquisites, or paid in lieu of such benefits, or (v) other similar forms of extraordinary compensation.
(i) “Consultant” shall mean any consultant or adviser engaged to provide services to the Company or any Designated Subsidiary who qualifies as a consultant or advisor under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement.
(j) “Designated Subsidiaries” means the Subsidiaries (if any) whose Employees and/or Consultants have been designated by the Board in writing from time to time in its discretion as eligible to participate in the Plan, such designation to specify, in respect of Employees, whether such participation is in the Section 423 Component or Non-Section 423 Component. For the avoidance of doubt, a Designated Subsidiary that participates in the Section 423 Component in respect of Employees will not participate in the Non-Section 423 Component in respect of Employees.
(k) “Effective Date” means October 23, 2013 (the date on which the shareholders of the Company approved the original 2013 Employee Stock Purchase Plan).
(l) “Employee” means any individual designated as an employee of the Company or a Designated Subsidiary on the payroll records thereof. Employee status shall be determined consistent with Treasury Regulation section 1.421-1(h), or its successor provision.
(m) “Entry Date” means the first day of each Exercise Period.
(n) “ESPP Brokerage Account” has the meaning given such term in Section 9(a).
(o) “Exercise Date” means the last day of each Exercise Period.
(p) “Exercise Period” means, subject to adjustment as provided in Section 4(b), the approximately six (6) month period beginning on each: (i) March 1 of each year and ending the last day of August of such year, or (ii) September 1 of each year and ending on the last day of February of the following year, until the Plan terminates; provided that the first Exercise Period shall begin on September 1, 2014.
(q) “Exercise Price” means the price per Share offered in a given Exercise Period determined as provided in Section 6(b).
(r) “Fair Market Value” means, if the Shares are listed on a national securities exchange, as of any given date, the closing price for a Share on such date on the Applicable Exchange, or if Shares were not traded on the Applicable Exchange on such measurement date, then on the closest preceding date on which Shares are so traded, all as reported by such source as the Committee may select. If the Shares are not listed on a national securities exchange, the Fair Market Value of a Share shall mean the amount determined by the Board in good faith, and, with respect to the Section 423 Component, in a manner consistent with Section 423 of the Code to be the fair market value of a Share.
(s) “Non-Section 423 Component” shall mean those Offerings under the Plan, together with the sub-plans, appendices, rules or procedures, if any, adopted by the Committee as a part of this Plan, in each case, pursuant to which options may be granted to eligible Consultants and non-U.S. eligible Employees that need not satisfy the requirements for options granted pursuant to an “employee stock purchase plan” that are set forth under Section 423 of the Code.
(t) “Offering” shall mean an offer under the Plan of an option that may be exercised during an Exercise Period as further described in Sections 4 and 5. Unless otherwise specified by the Committee, each Offering to the eligible Employees of the Company or a Designated Subsidiary shall be deemed a separate Offering, even if the dates and other terms of the applicable Exercise Periods of each such Offering are identical and the provisions of the Plan will separately apply to each Offering. To the extent permitted by U.S. Treasury Regulation Section 1.423-2(a)(1), the terms of each separate Offering under the Section 423 Component need not be identical, provided that the terms of the Section 423 Component and an Offering thereunder together satisfy U.S. Treasury Regulation Section 1.423-2(a)(2) and (a)(3).
(u) “Participant” means an Employee or, solely in respect of the Non-Section 423 Component, a Consultant, in each case, who is eligible to participate in the Plan under Section 3 and who has elected to participate in the Plan by enrolling online as provided in Section 5 hereof.
(v) “Plan” means the Wix.com Ltd. Amended and Restated 2013 Employee Stock Purchase Plan, including both the Section 423 Component and the Non-Section 423 Component and any other sub-plans or appendices hereto, as amended and/or restated from time to time.
(w) “Plan Contributions” means, with respect to each Participant, the after-tax payroll deductions withheld from the Compensation of the Participant and contributed to the Plan for the Participant as provided in Section 7 hereof.
(x) “Section 409A” shall mean Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including, without limitation, any such regulations or other guidance issued after the Effective Date.
(y) “Section 423 Component” shall mean those Offerings under the Plan that are intended to meet the requirements set forth in Section 423(b) of the Code.
(z) “Share” means an ordinary share, par value NIS 0.01 per share, of the Company (including any new, additional or different stock or securities resulting from any change in capitalization pursuant to Section 13(b)).
(aa) “Subsidiary” means any corporation of which the Company owns, directly or indirectly, 50% or more of the total combined voting power of all classes of stock, and that otherwise qualifies as a “subsidiary corporation” within the meaning of Section 424(f) of the Code.
(bb) “Terminating Event” means a Participant ceases to be an Employee or, in respect of the Non-Section 423 Component, a Consultant under any circumstances; provided, however, that, for purposes of the Plan, a Participant’s status as an Employee shall be considered to be continuing intact while such Participant is on military leave, sick leave, or other bona fide leave of absence approved by the Committee or the Participant’s supervisor; provided further, however, that if such period of leave of absence exceeds three (3) months, and the Participant’s right to reemployment is not provided either by statute or by contract, the Participant’s status as an Employee shall be deemed to have terminated on the first day immediately following such three (3)-month period. A transfer of a Participant’s employment between or among the Company and/or Designated Subsidiaries (solely Designated Subsidiaries and not all Subsidiaries) shall not be considered a Terminating Event. In addition, the conversion of an Employee participating in the Section 423 Component to a Consultant shall constitute a Terminating Event; however, the conversion of an Employee to a Consultant or a Consultant to an Employee, in each case, who is participating in the Non-Section 423 Component shall not constitute a Terminating Event.
3. Eligibility.
(a) General Rule. Except as otherwise provided herein, all Employees and such Consultants designated by the Committee in writing shall be eligible to participate in the Plan, provided, that Consultants shall only participate in the Non-Section 423 Component of the Plan.
(b) Exclusion. Notwithstanding the provisions of Section 3(a), the Committee may exclude from participation in the Section 423 Component, to the extent not inconsistent with the requirements of Section 423 of the Code, an Employee if, as of the Entry Date of such Exercise Period: (i) such Employee’s customary employment is twenty (20) hours or less per week, or (ii) such Employee’s customary employment is for not more than 5 months in any calendar year. Further notwithstanding the provisions of Section 3(a) and the foregoing, with respect to the Non-Section 423 Component, the foregoing shall apply in determining who is an eligible Employee or Consultant, except (A) the Committee may limit eligibility further within the Company or a Designated Subsidiary so as to only designate some Employees or Consultants of the Company or a Designated Subsidiary as eligible Participants, and (B) to the extent the foregoing is not consistent with applicable local laws, applicable local laws shall control.
4. Exercise Periods.
(a) In General. The Plan shall generally be implemented by a series of Exercise Periods, each of which lasts approximately six (6) months.
(b) Changes by Committee. The Committee shall have the authority to make changes to the occurrence, duration and/or the frequency of Exercise Periods with respect to future Exercise Periods if any such change is announced prior to the scheduled beginning of the first Exercise Period to be affected, provided that the duration of an Exercise Period may not exceed five (5) years from the Entry Date (or the expiration of such other applicable period specified under Section 423(b)(7) of the Code (or any successor provision of the Code thereto)).
5. Participation. Employees and Consultants meeting the eligibility requirements of Section 3 hereof may elect to participate in the Plan commencing on any Entry Date for the applicable Exercise Period by enrolling online in the manner and through the website designated by the Company during the period beginning on the First Enrollment Date and ending at 5:30 pm Israeli time on the Last Enrollment Date that corresponds to the applicable Exercise Period set forth below:
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| Exercise Period |
First Enrollment Date |
Last Enrollment Date |
| March 1 – August 31 |
February 1 |
February 28 or 29 |
| September 1 – February 28 or 29 |
August 1 |
August 31 |
; provided, however, that before the Entry Date for any such Exercise Period, the Committee may prescribe with respect to Employees generally any alternative enrollment period for such Exercise Period. Notwithstanding the foregoing, eligible Employees and Consultants who are citizens or residents of a non-U.S. jurisdiction may be excluded from the Plan if (a) the grant of an option under the Plan or any offering to a citizen or resident of the non-U.S. jurisdiction is prohibited under the laws of such jurisdiction, or (b), with respect to the Section 423 Component, compliance with the laws of the non-U.S. jurisdiction would cause the Plan or the offering to violate the requirements of Section 423 of the Code, in each case but solely with respect to the Section 423 Component, to the extent allowed under Section 423 of the Code.
6. Grant of Option.
(a) Shares Subject to Option. On a Participant’s Entry Date, subject to the limitations set forth in Section 6(c), the Participant shall be granted an option to purchase on the subsequent Exercise Date (at the Exercise Price determined as provided in Section 6(b) below) up to a number of Shares determined by dividing such Participant’s Plan Contributions accumulated during the current Exercise Period prior to such Exercise Date and retained in the Participant’s account as of such Exercise Date by the Exercise Price; provided that the maximum number of Shares a Participant may purchase during any Exercise Period may be established by the Committee as a fixed number or a different predetermined formula with respect to any Exercise Period prior to the Entry Date thereof. All Participants granted options under the Section 423 Component pursuant to an Exercise Period shall have the same rights and privileges within the meaning of Section 423(b)(5) of the Code. Eligible Employees and Consultants participating in the Non-Section 423 Component of this Plan need not have the same rights and privileges as eligible Employees participating in the Section 423 Component. No fractional Shares shall be issued or otherwise transferred upon the exercise of an option under the Plan.
(b) Exercise Price. The Exercise Price offered to each Participant in a given Exercise Period shall be the Applicable Percentage of the Fair Market Value of a Share on the Entry Date or the Exercise Date, whichever is lower. The Applicable Percentage with respect to each Exercise Period shall be 85% unless and until such Applicable Percentage is increased by the Committee, in its discretion, provided that any such increase in the Applicable Percentage with respect to a given Exercise Period must be established prior to the commencement of the enrollment process for such Exercise Period.
(c) Limitations on Options that may be Granted. Notwithstanding any provision of the Plan to the contrary, no Employee may participate in the Section 423 Component of the Plan if such Employee, immediately after the applicable Entry Date, would be deemed for purposes of Section 423(b)(3) of the Code to possess five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Subsidiary or of any other related corporation for purposes of Section 423 of the Code. The limitations set forth in this Section 6(c) shall be applied in conformance with applicable regulations under Section 423(b)(8) of the Code. The Committee may, but shall not be required to, provide similar limitations on Participants in the Non-Section 423 Component of the Plan.
(d) No Rights as Shareholder. Until a Participant’s option has been exercised in accordance with the provisions of the Plan and Shares subject to his or her option have actually been issued to such Participant or to an appointed nominee, such Participant shall (i) have no voting, dividend or other rights and/or privileges of a shareholder of the Company in respect of shares purchasable upon exercise of any part of such option, and (ii) shall not be deemed to be a class of shareholders or creditors of the Company under applicable law, including Sections 350 and 351 of the Israeli Companies Law - 1999.
(e) Bookkeeping Accounts Maintained. Individual bookkeeping accounts shall be maintained for each Participant. All Plan Contributions from a Participant’s Compensation shall be credited to such Participant’s Plan account. However, all Plan Contributions made for a Participant shall be deposited in the Company’s or a Designated Subsidiary’s general corporate accounts, and no interest shall accrue or be credited with respect to a Participant’s Plan Contributions. All Plan Contributions received or held by the Company or a Designated Subsidiary may be used by the Company or such Designated Subsidiary for any corporate purpose, and neither the Company nor such Designated Subsidiary shall be obligated to segregate or otherwise set apart such Plan Contributions from any other corporate funds.
7. Plan Contributions.
(a) Contribution by Payroll Deduction. All contributions to the Plan in respect of the Section 423 Component shall be made only by after-tax payroll deductions by the Company or Designated Subsidiary in a manner consistent with the provisions of Section 423 of the Code or any successor thereto. All contributions to the Plan in respect of the Non-Section 423 Component for Employees shall be made only by after-tax payroll deductions by the Company or Designated Subsidiary. All contributions to the Plan in respect of the Non-Section 423 Component for Consultants shall be made only by deductions from Compensation paid by the Company or Designated Subsidiary to such Consultants pursuant to the agreement governing the Consultant relationship. Unless otherwise determined by the Committee, all such contributions shall be paid in United States dollars.
(b) Payroll Deduction Election. At the time a Participant enrolls online with respect to an Exercise Period in accordance with Section 5, the Participant shall authorize payroll, or, solely in respect of Consultants, accounts payable, deductions from his or her Compensation to be made on each payroll, or, solely in respect of Consultants, invoice payment, date during the portion of the Exercise Period that he or she is a Participant in an amount not less than 1% and not more than 15% of the Participant’s Compensation on each payroll, or, solely in respect of Consultants, invoice payment, date during the portion of the Exercise Period that he or she is a Participant, subject to any limitations and restrictions pertaining to payroll, or, solely in respect of Consultants, accounts payable, deductions pursuant to applicable law and subject further to any decision of the Committee to lower the maximum cap of the payroll, or, solely in respect of Consultants, accounts payable, deduction (i.e. 15%) whether in general or in respect of certain Exercise Period(s), as determined by the Committee. The amount of payroll, or, solely in respect of Consultants, accounts payable, deductions must be a whole percentage (e.g., 1%, 2%, 3%, etc.) of the Participant’s Compensation. The amount of payroll, or, solely in respect of Consultants, accounts payable, deductions may be adjusted to the extent required by applicable law in respect of the Section 423 Component and to the extent determined necessary or appropriate by the Committee in respect of the Non-Section 423 Component.
(c) Commencement of Payroll Deductions. Except as otherwise determined by the Committee under rules applicable to all Participants or, solely in respect of the Non-Section 423 Component, such Participants deemed appropriate by the Committee, payroll, or, solely in respect of Consultants, accounts payable, deductions shall commence with the earliest administratively practicable payroll, or, solely in respect of Consultants, invoice payment, date on or after the Entry Date with respect to which the Participant enrolls online in accordance with Section 5, or is deemed to have elected continued participation in the Plan with respect to succeeding Exercise Periods in accordance with Section 7(d).
(d) Automatic Continuation of Deductions for Succeeding Exercise Periods. Subject to Section 12(a), with respect to each succeeding Exercise Period, a Participant shall be deemed (i) to have elected to participate in such immediately succeeding Exercise Period (and, for purposes of such Exercise Period, the Participant’s “Entry Date” shall be the first day of such succeeding Exercise Period), and (ii) to have authorized the same payroll, or, solely in respect of Consultants, accounts payable, deduction for such immediately succeeding Exercise Period as was in effect for the Participant immediately prior to the commencement of such succeeding Exercise Period, unless such Participant elects otherwise prior to the Entry Date of such succeeding Exercise Period, in accordance with Section 7(e) below or such Participant withdraws from the Plan in accordance with Section 12 hereof.
(e) Change of Deduction Election. A Participant may not decrease or increase the rate of his or her payroll, or, solely in respect of Consultants, accounts payable, deductions during an Exercise Period. Using the online authorization process designated for this purpose by the Company in accordance with Section 5 above authorizing a change in the rate of payroll, or, solely in respect of Consultants, accounts payable, deductions, a Participant may decrease or increase the rate of his or her payroll, or, solely in respect of Consultants, accounts payable, deductions (within the limitations of Section 7(b) above) commencing with the first Exercise Period that begins after the date of such online authorization. Additionally, a Participant may withdraw from an Exercise Period as provided in Section 12(a) hereof.
(f) Automatic Changes in Deduction. The Company may decrease a Participant’s rate of payroll, or, solely in respect of Consultants, accounts payable, deductions, but not below zero percent, at any time during an Exercise Period to the extent necessary to comply with Section 423(b)(8) of the Code, any other applicable law or Section 6(a) or Section 6(c) or, solely in respect of the Non-Section 423 Component, as determined by the Committee in its discretion. Payroll, or, solely in respect of Consultants, accounts payable, deductions shall recommence at the rate provided in the Participant’s online enrollment at the beginning of the first Exercise Period beginning in the following calendar year, unless the Participant’s participation in the Plan terminates as provided in Section 12.
(g) Other Forms of Contributions Transfer. Notwithstanding any other provisions of the Plan to the contrary, in non-U.S. jurisdictions where participation in the Plan through payroll, or, solely in respect of Consultants, accounts payable, deductions is prohibited, the Committee may provide that an eligible Employee or, solely in respect of the Non-Section 423 Component, Consultant may elect to participate through contributions to his or her account under the Plan in a form acceptable to the Committee in lieu of or in addition to payroll, or, solely in respect of Consultants, accounts payable, deductions; provided, however, that, for any Exercise Period under the Section 423 Component, the Committee must determine that any alternative method of contribution is applied on an equal and uniform basis to all eligible Employees in the Exercise Period.
8. Exercise of Options and Purchase of Shares.
(a) Exercise of Options. On each Exercise Date, the option for the purchase of Shares of each Participant who has not withdrawn from the Plan shall be automatically exercised to purchase the number of whole Shares determined by dividing (i) the total amount of the accumulated Plan Contributions then credited to the Participant’s account under the Plan during the Exercise Period and not previously applied toward the purchase of Shares by (ii) the Exercise Price, subject to the limitations in Section 6(a) and Section 6(c) and any other limitation in the Plan.
(b) Pro Rata Allocation of Shares. If the aggregate number of Shares to be purchased by all Participants in the Plan on an Exercise Date exceeds the number of Shares available as provided in Section 13, the Company shall make a pro rata allocation of the remaining Shares in as uniform a manner as practicable and as the Company determines to be equitable. Any fractional Share resulting from such pro rata allocation to any Participant shall be disregarded and shall not be issued.
(c) Delivery of Shares. As soon as practicable after each Exercise Date but in no event later than fourteen (14) days after the applicable Exercise Date, the Company shall arrange the delivery of the Shares purchased by each Participant on such Exercise Date to a broker designated by the Company that will hold such Shares for the benefit of each such Participant; provided that the Company may arrange the delivery to a Participant of a certificate representing such Shares. Shares to be delivered to a Participant under the Plan shall be registered in the name of the Participant.
(d) Return of Cash Balance. Any cash balance remaining in a Participant’s Plan account following any Exercise Date shall be refunded to the Participant as soon as practicable after such Exercise Date but in no event later than fourteen (14) days after the applicable Exercise Date. However, if the cash balance to be returned to a Participant pursuant to the preceding sentence is less than the amount that would have been necessary to purchase an additional whole Share on such Exercise Date, the Company may arrange for the cash balance to be retained in the Participant’s Plan account and applied toward the purchase of Shares in the subsequent Exercise Period, as the case may be.
(e) Tax Withholding. Any tax consequences arising from participation in the Plan, the issuance, sale or disposition of Shares or from any other event or act (including, without limitation, by the Company, and/or any Designated Subsidiary or any Participant) hereunder shall be borne solely by the relevant Participant. Without derogating from the generality of the foregoing, at the time a Participant’s option is granted or exercised, in whole or in part, or at the time a Participant disposes of some or all of the Shares he or she purchases under the Plan, the Participant shall make adequate provision for the federal, state, local, Israeli and other non-United States tax withholding obligations, if any, of the Company and/or the applicable Designated Subsidiary which arise upon grant or exercise of such option or upon such disposition of Shares, respectively. The Company and/or applicable Designated Subsidiary may, but shall not be obligated to: (i) pay all applicable federal, state or local withholding taxes required by law to be withheld in respect of the options granted hereunder, by the sale of Shares purchased hereunder, in an amount reasonably determined by the Company to be sufficient to satisfy any such withholding tax required under applicable law; and/or (ii) withhold from the Participant’s compensation the amount necessary to meet such withholding obligations as it may deem necessary or appropriate. Furthermore, by receiving any benefit under the Plan, a Participant shall be deemed to agree to indemnify the Company and the Designated Subsidiaries and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment or distribution made to such Participant.
(f) Expiration of Option. Any portion of a Participant’s option remaining unexercised after the end of the Exercise Period to which such option relates shall expire immediately upon the end of such Exercise Period.
(g) Provision of Reports to Participants. Unless otherwise determined by the Committee, each Participant who has exercised all or part of his or her option under the Plan shall receive, as soon as practicable after the Exercise Date, a report of such Participant’s Plan account setting forth the total Plan Contributions accumulated prior to such exercise, the number of Shares purchased, the Exercise Price for such Shares, the date of purchase and the cash balance, if any, remaining immediately after such purchase that is to be refunded or retained in the Participant’s Plan account pursuant to Section 8(d). The report pursuant to this Section may be delivered in such form and by such means, including by electronic transmission, as the Company may determine.
9. ESPP Brokerage Account; Disqualifying Disposition.
(a) Deposit of Shares into ESPP Brokerage Account. Notwithstanding any other provisions of the Plan to the contrary, the Company may require that the Shares purchased on behalf of each Participant under the Plan shall be deposited directly into a brokerage account which the Company may establish for the Participant at a Company-designated brokerage firm (such an account, the “ESPP Brokerage Account”). A Participant may sell Shares held in his or her ESPP Brokerage Account at any time, but in the absence of any such sale and solely in respect of the Section 423 Component, the Participant shall be required to hold such shares in the ESPP Brokerage Account until expiration of the holdings periods specified by Section 423(a)(1) of the Code applicable to such Shares.
(b) Participant Required to Report Disqualifying Disposition. A Participant shall be required to report in writing to the Company (or a person or firm designated by the Committee) any disposition of Shares purchased under the Section 423 Component of the Plan prior to the expiration of the holding periods specified by Section 423(a)(1) of the Code.
10. Designation of Beneficiary.
(a) Designation. Unless otherwise determined by the Committee, a Participant may file with the Company (or a person or firm designated by the Committee) a written designation (in a form acceptable to the Committee) of a beneficiary who is to receive any Shares and/or cash, if any, otherwise deliverable from the Participant’s Plan account and/or ESPP Brokerage Account in the event of the Participant’s death prior to delivery to the Participant thereof, to the extent permitted and recognized by applicable law.
(b) Change of Designation; Absence of Designated Beneficiary. A Participant’s beneficiary designation may be changed by the Participant at any time in the manner designated by the Company (or a person or firm designated by the Committee). In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan in accordance with applicable law who is living at the time of such Participant’s death, the Company (or a person or firm designated by the Committee) shall deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company (or a person or firm designated by the Committee), in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
11. Transferability. Neither Plan Contributions credited to a Participant’s account nor any option or rights to exercise any option or receive Shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will or the laws of descent and distribution, or as provided in Section 10). Any attempted such assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw in accordance with Section 12(a).
12. Withdrawal; Terminating Event.
(a) Withdrawal. A Participant may withdraw from an Exercise Period at any time by giving written notice to the Company (or a person or firm designated by the Committee) not later than 5:30 pm Israel time on the last withdrawal date that corresponds to the applicable Exercise Date set forth below:
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| Exercise Period |
Exercise Date |
Last Withdrawal Date |
| March 1 – August 31 |
Last day of August |
August 24 |
| September 1 – February 28 or 29 |
Last day of February |
February 21 |
Payroll, or, solely in respect of Consultants, accounts payable, deductions, if any have been authorized, shall cease as soon as administratively practicable after receipt by the Company of the Participant’s notice of withdrawal, in a form as prescribed by the Committee, and, subject to administrative practicability, no further purchases shall be made for the Participant’s account. All Plan Contributions credited to such Participant’s account, if any, and not yet used to purchase Shares, shall be returned to the Participant as soon as administratively practicable after receipt of the Participant’s notice of withdrawal (but in no event more than fourteen (14) days thereafter). Such Participant’s unexercised options to purchase Shares pursuant to the Plan shall be automatically terminated. Payroll, or, solely in respect of Consultants, accounts payable, deductions will not resume on behalf of a Participant who has withdrawn from the Plan (a “Former Participant”) unless the Former Participant enrolls in a subsequent Exercise Period in accordance with Section 5 and subject to the restriction provided in Section 12(b), below.
(b) Effect of Withdrawal on Subsequent Participation. A Former Participant who has withdrawn from the Plan pursuant to Section 12(a) shall be eligible to participate in the Plan at the beginning of the next Exercise Period following the date the Former Participant withdrew, and the Former Participant must submit a new online enrollment in accordance with Section 5 in order to again become a Participant.
(c) Terminating or Transfer Event. If a Participant has a Terminating Event, (i) such individual may not make further Plan Contributions, (ii) any amount of cash then credited to his or her Plan account shall be promptly returned to such individual following the date of such Terminating Event and (iii) all Shares held in such Participant’s ESPP Brokerage Account shall continue to be held in such ESPP Brokerage Account unless the individual sells or transfers such Shares. For the avoidance of doubt, unless determined otherwise by the Committee, in the event that the employment or other service relationship of a Participant is transferred from the Company or a Designated Subsidiary, and such Participant becomes an employee or under the Non-423 Component only, consultant, of a Designated Subsidiary, such Participant shall not constitute a Terminating Event. If a Participant transfers employment or other service relationship from the Company or any Designated Subsidiary participating in the Section 423 Component to any Designated Subsidiary participating in the Non-Section 423 Component, such transfer shall not be treated as a termination of employment or other service relationship, but he or she shall immediately cease to participate in the Section 423 Component; however, any contributions made for the Exercise Period in which such transfer occurs shall be transferred to the Non-Section 423 Component, and such Participant shall immediately join the then current Exercise Period under the Non-Section 423 Component upon the same terms and conditions in effect for his or her participation in the Section 423 Component, except for such modifications otherwise applicable for Participants in such Exercise Period. A Participant who transfers employment or other service relationship from any Designated Subsidiary participating in the Non-Section 423 Component to the Company or any Designated Subsidiary participating in the Section 423 Component shall not be treated as terminating his or her employment or other service relationship and shall remain a Participant in the Non-Section 423 Component until the earlier of (i) the end of the current Exercise Period under the Non-Section 423 Component, or (ii) the First Enrollment Date of the first Exercise Period in which he or she is eligible to participate following such transfer. Notwithstanding the foregoing, the Administrator may establish different rules to govern transfers of employment between companies participating in the Section 423 Component and the Non-Section 423 Component, consistent with any applicable requirements of Section 423 of the Code.
13. Shares Issuable under the Plan.
(a) Number of Shares. Subject to adjustment as provided in Section 13(b), the maximum number of Shares that may be issued under the Plan in the aggregate shall be the amount determined by the Board. Such Shares issuable under the Plan may be authorized and unissued shares (which will not be subject to preemptive rights), Shares held in treasury by the Company, Shares purchased on the open market or by private purchase or any combination of the foregoing. Any Shares issued under the Plan shall reduce on a Share-for-Share basis the number of Shares available for subsequent issuance under the Plan. If an outstanding option under the Plan for any reason expires or is terminated or cancelled, the Shares allocable to the unexercised portion of such option shall again be available for issuance under the Plan.
(b) Adjustments Upon Changes in Capitalization; Company Transactions.
(i) If the outstanding Shares are increased or decreased, or are changed into or are exchanged for a different number or kind of shares, including as a result of one or more mergers, reorganizations, restructurings, recapitalizations, reclassifications, stock splits, reverse stock splits, stock dividends or the like, or there occurs a separation, spin-off or other distribution of stock or property (including any extraordinary dividend, but excluding any ordinary dividends) affecting the Company, then appropriate adjustments shall be made to the number and/or kind of shares available for issuance in the aggregate under the Plan and under each outstanding option under the Plan and to the Exercise Price thereof, in each case as determined by the Committee, in its discretion, and the Committee’s determination shall be conclusive.
(ii) In the event of any proposed dissolution or liquidation of the Company, immediately prior to the consummation of such proposed action, any outstanding Exercise Period will terminate, and any Shares held in ESPP Brokerage Accounts, and all Plan Contributions credited to Participant Plan accounts and not used to purchase Shares, shall be distributed to each applicable Participant, unless otherwise provided by the Committee.
(iii) In the event of sale of all or substantially all of the Company’s assets, or a merger, amalgamation, consolidation, acquisition or sale or exchange of shares or similar event affecting the Company (each, a “Company Transaction”), then, as determined by the Committee, in its discretion, which determination shall be conclusive, either:
(A) each option under the Plan shall be assumed or an equivalent option shall be substituted by the Company’s successor corporation or a parent corporation (as defined in Section 424(e) of the Code) of such successor corporation, unless the Committee determines, in the exercise of its discretion, and in lieu of such assumption or substitution, to shorten the Exercise Period then in progress by setting a new Exercise Date (the “New Exercise Date”). If the Committee shortens the Exercise Period then in progress in lieu of assumption or substitution in the event of a Company Transaction, the Company shall notify each Participant in writing, prior to the New Exercise Date, that the Exercise Date for such Participant’s option has been changed to the New Exercise Date, and that such Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Plan as provided in Section 12(a). For purposes of this Section 13(b), an option granted under the Plan shall be deemed to have been assumed if, following the Company Transaction, the option confers the right to purchase, for each Share subject to the option immediately prior to the Company Transaction, the consideration (whether stock, cash or other securities or property) received in the Company Transaction by holders of Shares for each Share held on the effective date of the Company Transaction (and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, that if the consideration received in the Company Transaction was not solely common stock or Shares of the successor corporation or its parent corporation (as defined in Section 424(e) of the Code), the Committee may, with the consent of the successor corporation, provide for the consideration to be received upon exercise of the option to be solely common stock of the successor corporation or its parent corporation equal in fair market value to the per share consideration received by the holders of Shares in the Company Transaction; or
(B) the Plan shall terminate and any Shares held in ESPP Brokerage Accounts and all the Plan Contributions credited to Participant Plan accounts and not yet used to purchase Shares, shall be distributed to each applicable Participant.
(iv) In all cases, the Committee shall have discretion to exercise any of the powers and authority provided under this Section 13, and the Committee’s actions hereunder shall be final and binding on all Participants. No fractional shares shall be issued under the Plan pursuant to any adjustment authorized under the provisions of this Section 13.
14. Administration. The Plan shall be administered by the Committee. The Committee shall have all authority that may be necessary or helpful to enable it to discharge its responsibilities with respect to the Plan. Without limiting the generality of the foregoing sentences of this Section 14, subject to the express provisions of the Plan, the Committee shall have full and exclusive discretionary authority to interpret and construe any and all provisions of the Plan and any agreements, forms, and instruments relating to the Plan; prescribe the forms and manner of any agreements, forms, and instruments, and all online enrollment, designation or communication, relating to the Plan; determine eligibility to participate in the Plan; adopt rules and regulations for administering the Plan; adjudicate and determine all disputes arising under or in connection with the Plan; determine whether a particular item is included in “Compensation;” establish the exchange ratio applicable to amounts withheld in a currency other than United States dollars, retain and engage such third parties as it shall determine to assist with the administration of the Plan and make all other determinations necessary or advisable for the administration of the Plan. All decisions, actions and determinations by the Committee with respect to the Plan; any agreement, form or instrument relating to the Plan; or any operation or administration of the Plan shall be final, conclusive and binding on all persons. Subject to applicable laws, rules, and regulations, the Committee may, in its discretion, from time to time, delegate all or any part of its responsibilities and powers under the Plan to any employee or group of employees of the Company or any Subsidiary, and revoke any such delegation. Notwithstanding the foregoing, the Board, in its absolute discretion, may at any time and from time to time exercise any and all rights, duties and responsibilities of the Committee under the Plan, including, but not limited to, establishing procedures to be followed by the Committee. For the avoidance of doubt, the Committee shall have the exclusive authority to determine the Designated Subsidiaries that participate in the Non-Section 423 Component and the Designated Subsidiaries that participate in the Section 423 Component. The Company shall participate in the Non-Section 423 Component.
15. Amendment, Suspension, and Termination of the Plan.
(a) Amendment of the Plan. The Board or the Committee may at any time, or from time to time, amend the Plan in any respect; provided that (i) except as otherwise provided by Section 4(b) or Section 13(b), or to comply with any applicable law, regulation or rule, no such amendment may make any change in any option theretofore granted which materially adversely affects the previously accrued rights of any Participant with respect to any such option without such Participant’s consent, and (ii) with respect to the Section 423 Component, the Plan shall not be amended in any way that will cause options issued under the Plan to fail to meet the requirements for employee stock purchase plans as defined in Section 423 of the Code or any successor thereto. With respect to the Section 423 Component, to the extent necessary to comply with Section 423 of the Code, or any other applicable law, regulation or rule, the Company shall obtain shareholder approval of any such amendment.
(b) Suspension of the Plan. The Board or the Committee may, at any time, suspend the Plan; provided that the Company shall provide notice to the Participants prior to the effectiveness of such suspension. The Board or the Committee may resume the operation of the Plan following any such suspension; provided that the Company shall provide notice to the Participants prior to the date of termination of the suspension period. A Participant shall remain a Participant in the Plan during any suspension period (unless he or she withdraws pursuant to Section 12(a)), however no options shall be granted or exercised, and no payroll deductions shall be made in respect of any Participant during the suspension period.
(c) Termination of the Plan. The Plan and all rights of Participants hereunder shall terminate on the earliest of:
(i) the Exercise Date at which Participants become entitled to purchase a number of Shares greater than the number of Shares remaining available for issuance under the Plan pursuant to Section 13; or
(ii) such date as is determined by the Board in its discretion.
Notwithstanding the foregoing to the contrary, (i) the Board may at any time, with notice to Participants, terminate an Exercise Period then in progress and provide, in its discretion, that the outstanding balance of Plan Contributions credited to Participant Plan accounts and not yet used to purchase Shares shall either be (x) used to purchase Shares on an early Exercise Date established by the Board, or (y) distributed to the applicable Participants, and (ii) upon any termination of the Plan, any Exercise Period then in progress shall be treated as may be determined by the Board in accordance with clause (i) of this sentence, and any Shares held in ESPP Brokerage Accounts shall be distributed to the applicable Participants.
16. Miscellaneous.
(a) Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan shall be in writing and shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person or agent, designated by the Company for the receipt thereof.
(b) Expenses of the Plan. All costs and expenses incurred in administering the Plan shall be paid by the Company or a Designated Subsidiary, except that any stamp duties or transfer taxes applicable to participation in the Plan may be charged to the account of such Participant by the Company.
(c) Rights of Participants.
(i) Rights or Claims. No person shall have any rights or claims under the Plan except in accordance with the provisions of the Plan and any applicable agreement thereunder. The liability of the Company or any Designated Subsidiary under the Plan is limited to the obligations expressly set forth in the Plan, and no term or provision of the Plan may be construed to impose any further or additional duties, obligations, or costs on the Company, any Designated Subsidiary or any other affiliate thereof or the Board or the Committee not expressly set forth in the Plan. The grant of any option under the Plan shall not confer any rights upon the Participant holding such option other than such terms, and subject to such conditions, as are specified in the Plan as being applicable to such option, or to all options. Without limiting the generality of the foregoing, neither the existence of the Plan nor anything contained in the Plan or in any agreement thereunder shall be deemed to:
(A) give any Participant the right to be retained in the service of the Company or any Designated Subsidiary, whether in any particular position, at any particular rate of compensation, for any particular period of time or otherwise;
(B) restrict in any way the right of the Company or any Designated Subsidiary to terminate, change or modify any Participant’s employment or consulting relationship at any time with or without cause;
(C) constitute a contract of employment between the Company or any Designated Subsidiary and any Employee, nor shall it constitute a right to remain in the employ of the Company or any Designated Subsidiary;
(D) give any Employee or Consultant of the Company or any Designated Subsidiary the right to receive any bonus, whether payable in cash or in Shares, or in any combination thereof, from the Company and/or a Designated Subsidiary, nor be construed as limiting in any way the right of the Company and/or a Designated Subsidiary to determine, in its discretion, whether or not it shall pay any Employee or Consultant bonuses, and, if so paid, the amount thereof and the manner of such payment; or
(E) give any Employee or Consultant any rights whatsoever with respect to any Share options except as specifically provided in the Plan and any applicable agreement thereunder.
(ii) Options. Notwithstanding any other provision of the Plan, a Participant’s right or entitlement to purchase any Shares under the Plan shall only result from continued employment, or, solely in respect of the Non-Section 423 Component, other service relationship, with the Company or any Designated Subsidiary.
(iii) No Effects on Benefits; No Damages. Any compensation received by a Participant under an option is not part of any (1) normal or expected compensation or salary for any purpose, as an employee or otherwise; (2) termination, indemnity, severance, resignation, redundancy, end of service payments; (3) bonuses; (4) long-service awards; (5) pension or retirement benefits or (6) similar payments under any laws, plans, contracts, policies, programs, arrangements or otherwise, in each case, otherwise payable or provided to such Participant. A Participant shall, by participating in the Plan, waive any and all rights to compensation or damages in consequence of termination of employment of such Participant for any reason whatsoever, whether lawfully or otherwise, insofar as those rights arise or may arise from such Participant ceasing to have rights under the Plan as a result of such termination of employment, or from the loss or diminution in value of such rights or entitlements, including by reason of the operation of the terms of the Plan or the provisions of any statute or law relating to taxation. No claim or entitlement to compensation or damages arises from the termination of the Plan or diminution in value of any option or Shares purchased under the Plan.
(iv) No Effect on Other Plans. Neither the adoption of the Plan nor anything contained herein shall affect any other compensation or incentive plans or arrangements of the Company or any Designated Subsidiary, or prevent or limit the right of the Company or any Designated Subsidiary to establish any other forms of incentives or compensation for their employees or grant or assume options or other rights otherwise than under the Plan.
(d) Participants Deemed to Accept Plan. By accepting any benefit under the Plan, each Participant and each person claiming under or through any such Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Board, the Committee or the Company, in any case in accordance with the terms and conditions of the Plan.
(e) Uncertificated Shares. To the extent that the Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may nevertheless be effected on a uncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange. Notwithstanding any contrary Plan provisions prescribing the manner and form in which stock certificates may be issued and/or Shares may be held by or on behalf of Participants, the Company and any affiliate thereof shall have the right to make such alternative arrangements as they may, in their discretion, determine, and which may include the transfer of Shares and/or the issue of stock certificates to any nominee or trust or other third party arrangement established for the benefit in whole or in part of Participants.
(f) Governing Law. The Plan shall be governed by the laws of the State of Israel, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction. Participants are deemed to submit to the exclusive jurisdiction and venue of the courts in Tel-Aviv, Israel, to resolve any and all issues that may arise out of or relate to the Plan or any related document.
(g) No Constraint on Corporate Action. Nothing contained in the Plan shall be construed to prevent the Company or any Designated Subsidiary from taking any corporate action (including the Company's right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets) which is deemed by it to be appropriate, or in its best interest, whether or not such action would have an adverse effect on the Plan, or any rights awarded Participants under the Plan. No employee, consultant, beneficiary, or other person, shall have any claim against the Company or any Designated Subsidiary as a result of any such action.
(h) Section 16. The provisions and operation of the Plan are intended to result in no transaction under the Plan being subject to (and not exempt from) the rules of Section 16 of the Securities Exchange Act of 1934, as amended, to the extent such rules are or become applicable to the Company.
(i) Requirements of Law; Limitations on Awards.
(i) The Plan, the granting, acceptance and exercise of options and the issuance of Shares under the Plan and the Company’s obligation to sell and deliver Shares upon the exercise of options to purchase Shares shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
(ii) If at any time the Committee shall determine, in its discretion, that the listing, registration and/or qualification of Shares upon any securities exchange or under any state, Federal or non-United States law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of Shares hereunder, the Company shall have no obligation to allow the grant or exercise of any option under the Plan, or to issue or deliver evidence of title for Shares issued under the Plan, in whole or in part, unless and until such listing, registration, qualification, consent and/or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Committee.
(iii) If at any time counsel to the Company shall be of the opinion that any sale or delivery of Shares pursuant to an option is or may be in the circumstances unlawful or result in the imposition of excise taxes on the Company, any Designated Subsidiary or any affiliate respectively thereof under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the United States Securities Act of 1933, as amended, or otherwise with respect to Shares or options, and the right to exercise any option under the Plan shall be suspended until, in the opinion of such counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company, any Designated Subsidiary or any such affiliate.
(iv) Upon termination of any period of suspension under Section 16(i)(iii), any option affected by such suspension which shall not then have expired or terminated shall be reinstated as to all Shares available before such suspension and as to the Shares which would otherwise have become available during the period of such suspension, but no suspension shall extend the term of any option.
(v) The Committee may require each person receiving Shares in connection with any option under the Plan to represent and agree with the Company in writing that such person is acquiring such Shares for investment without a view to the distribution thereof, and/or provide such other representations and agreements as the Committee may prescribe. The Committee, in its absolute discretion, may impose such restrictions on the ownership and transferability of the Shares purchasable or otherwise receivable by any person under any option as it deems appropriate. Any such restrictions may be set forth in the applicable agreement, and the certificates evidencing such shares may include any legend that the Committee deems appropriate to reflect any such restrictions.
(j) Data Protection. By participating in the Plan, each Participant consents to the collection, processing, transmission and storage by the Company and any Designated Subsidiary, in any form whatsoever, of any data of a professional or personal nature which is necessary for the purposes of administering the Plan. The Company and any Designated Subsidiary may share such information with any affiliate thereof, any trustee, its registrars, brokers, other third-party administrator or any person who obtains control of the Company or any Designated Subsidiary or any affiliate respectively thereof, or any division respectively thereof.
(k) Electronic Delivery. Any reference in the Plan or any related agreement to an agreement, document, statement, instrument or notice, whether written or otherwise, will include any agreement, document, statement, instrument or notice delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet.
(l) Drafting Context; Captions. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. The word “Section” herein shall refer to provisions of the Plan, unless expressly indicated otherwise. The words “include,” “includes,” and “including” herein shall be deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of similar import, unless the context otherwise requires. The headings and captions appearing herein are inserted only as a matter of convenience. They do not define, limit, construe, or describe the scope or intent of the provisions of the Plan.
(m) Effective Date. The 2013 Employee Stock Purchase Plan initially became effective on the Effective Date. The Plan as amended and restated herein shall become effective as of November 7, 2023.
(n) Rules for Israeli and Other Jurisdictions.
(i) With respect to Employees employed in Israel, the Plan may qualify, in the discretion of the Company, under any tax route of Section 102 of the Israeli Tax Ordinance (as amended) or under any tax ruling given in this matter by the Israeli tax authorities (if any). Notwithstanding any other provision of the Plan, the grant of options and issuance of Shares hereunder is subject to any rules, regulations and limitations of applicable law resulting from the tax route elected by the Company or as promulgated by such tax ruling (if any). As a condition for grant of options and issuance of Shares hereunder, a Participant shall execute any document and assume any obligation required by the Company in order to comply with such rules, regulations and limitations, including any trust arrangement (if applicable).
(ii) The Committee may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the specific requirements of local laws and procedures. Without limiting the generality of the foregoing, the Committee is specifically authorized, in its discretion, to adopt rules and procedures regarding the exclusion of particular Subsidiaries from participation in the Plan, eligibility to participate, the definition of Compensation, handling of payroll deductions, payment of interest, conversion of local currency, data privacy security, payroll tax, withholding procedures, establishment of bank or trust accounts to hold payroll deductions or contributions, determination of beneficiary designation requirements, and handling of stock certificates which vary with local requirements. The Committee may also adopt sub-plans applicable to particular Designated Subsidiaries, locations or classes of Employees. The rules of any such sub-plans shall take precedence over other provisions of the Plan, but unless otherwise superseded by the terms of such sub-plan, the provisions of the Plan shall govern the operation of such sub-plan. The Committee also is authorized to determine that, to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f), the terms of an option granted under the Plan or an Exercise Period to citizens or residents of a non-U.S. jurisdiction will be less favorable than the terms of options granted under the Plan or the same Exercise Period to Employees resident solely in the U.S. To the extent any appendix, sub-plan or changes thereto approved by the Administrator are inconsistent with the requirements of Section 423 of the Code or would jeopardize the tax-qualified status of the Section 423 Component, the Designated Subsidiaries affected thereby shall be considered Designated Subsidiaries in a separate Exercise Periods under the Non-Section 423 Component instead of the Section 423 Component.
(iii) Any grant of options or sub-plan to which this Section 16(n) applies shall constitute a separate offering for purposes of Code Section 423 and shall be administered, interpreted and construed in a manner consistent with the intended qualification of the remainder of the Plan under Section 423 of the Code.
(o) Section 409A. The Plan and the options granted pursuant to Offerings thereunder are intended to be exempt from the application of Section 409A. Notwithstanding any provision of the Plan to the contrary, if the Committee determines that any option granted under the Plan may be or become subject to Section 409A or that any provision of the Plan may cause an option granted under the Plan to be or become subject to Section 409A, the Committee may adopt such amendments to the Plan and/or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions as the Committee determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, either through compliance with the requirements of Section 409A or with an available exemption therefrom.
EX-4.7
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a20-fxexhibit47x2025.htm
EX-4.7
Document
Execution Version
WIX.COM LTD.
WARRANT AGREEMENT
Dated as of March 5, 2026
Table of Contents
Page
Section 1. Definitions...................................................................................................................1 Section 2. Rules of Construction..................................................................................................9 Section 3. The Warrants...............................................................................................................9 (a) Original Issuance of Warrants................................................................................................9
(b) Form, Dating and Denominations.........................................................................................10
(c) Execution and Delivery........................................................................................................10
(d) Method of Payment; Delay When Payment Date is Not a Business Day............................10
(e) Registrar, Paying Agent and Exercise Agent.......................................................................11
(f) Legends...............................................................................................................…..............11
(g) Transfers and Exchanges; Transfer Taxes; Certain Transfer Restrictions...........................13
(h) Exchange and Cancellation of Exercised Warrants.............................................................15
(i) Replacement Certificates......................................................................................................15
(j) Registered Holders...............................................................................................................16
(k) Cancellation.........................................................................................................................16
(l) Outstanding Warrants...........................................................................................................16
(m) No Rights as a Shareholder.................................................................................................17
(n) Repurchases of Warrants by the Company and its Subsidiaries..........................................17
Section 4. No Right of Redemption by the Company...............................................................17 Section 5. Exercise of Warrants.................................................................................................17 (a) Exercise at the Option of the Holders...................................................................................17
(b) Exercise Procedures..............................................................................................................17
(c) Settlement Upon Exercise.....................................................................................................18
(d) Strike Price and Number of Underlying Shares Adjustments..............................................19
(e) Voluntary Adjustments........................................................................................................30
(f) Adjustments Effective Without Need to Amend Certificates..............................................31
(g) Delivery of Additional Exercise Shares for Warrants Exercised in Connection with a Make-Whole Fundamental Change....................................................................................................31
(h) Effect of Ordinary Shares Change Event...........................................................................33
(i) Restriction on Exercises......................................................................................................35
Section 6. Certain Provisions Relating to the Issuance of Ordinary Shares..............................37 (a) Equitable Adjustments to Prices........................................................................................37
(b) Reservation of Ordinary Shares........................................................................................37
(c) Status of Ordinary Shares; Covenant Regarding Par Value.............................................37
(d) Taxes Upon Issuance of Ordinary Shares........................................................................38 Section 7.
(e) Registration Rights...........................................................................................................38
Calculations...............................................................................................................38 (a) Responsibility; Schedule of Calculations.................................................................................38
(b) Calculations Aggregated for Each Holder...............................................................................38
(c) Dispute Resolution...................................................................................................................38
Section 8. Miscellaneous...........................................................................................................39 (a) Notices......................................................................................................................................39
(b) Governing Law; Waiver of Jury Trial......................................................................................40
(c) Submission to Jurisdiction........................................................................................................40
(d) No Adverse Interpretation of Other Agreements.....................................................................40
(e) Successors; Benefits of Warrant Agreement............................................................................40
(f) Severability...............................................................................................................................40
(g) Counterparts.............................................................................................................................41
(h) Table of Contents, Headings, Etc.............................................................................................41
(i) Withholding Taxes....................................................................................................................41
(j) Service of Process.....................................................................................................................41
(k) No Other Rights.......................................................................................................................42
(l) No Obligation to Purchase Securities of the Company............................................................42
(m) Placement Agent.....................................................................................................................42
Exhibits
Exhibit A: Form of Warrant Certificate...................................................................................... A-1
Exhibit B: Form of Restricted Security Legend..........................................................................B-1
Schedules
Schedule A: Initial Holders of the Warrants.............................................................................SA-1
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of March 5, 2026, between Wix.com Ltd., an Israeli company, as issuer (the “Company”), and the other signatories to this Warrant Agreement (as defined below), as the initial Holders (as defined in this Warrant Agreement).
Each party to this Warrant Agreement (as defined below) agrees as follows.
Section 1.Definitions
.
“Affiliate” has the meaning set forth in Rule 144.
“Agent” means any Registrar, Paying Agent or Exercise Agent.
“Attribution Party” means the Holder’s Affiliates, and any other Persons whose beneficial ownership of the Ordinary Shares would be aggregated with such Holder’s for purposes of Section 13(d) of the Exchange Act.
“Authorized Denomination” means, with respect to a Warrant, either (a) such Warrant in its entirety, representing all of the Underlying Shares thereof; or (b) any portion of such Warrant that represents a whole number of the Underlying Shares thereof.
“Board of Directors” means the Company’s board of directors or a committee of such board duly authorized to act on behalf of such board.
“Business Day” means any day other than a Saturday, a Sunday or any day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed; provided that, solely for purposes of Section 5(c), if Net-Share Settlement applies, “Business Day” shall also not include days on which banking institutions in Israel are authorized or obligated by law or executive order to close or to be closed.
“Capital Stock” of any Person means any and all shares of, interests in, rights to purchase, warrants or options for, participations in, or other equivalents of, in each case however designated, the equity of such Person, but excluding any debt securities convertible into such equity.
“Cash Settlement” means, with respect to the Exercise of any Warrant, settlement of such Exercise by payment of the Cash Settlement Amount.
"Cash Settlement Amount" means, with respect to the Exercise of any Warrant, an amount of cash equal to the greater of (x) zero; and (y) an amount equal to:
N x (VP-SP)
where:
N = the number of Underlying Shares of such Warrant that are being so Exercised;
VP = the Valuation Price per Ordinary Share for such Exercise; and
SP = the Strike Price in effect immediately after the Close of Business on such Exercise Date.
“Certificate” means a Physical Certificate or an Electronic Certificate.
“Close of Business” means 5:00 p.m., New York City time.
“Common Equity” of any Person means Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.
“Company” means Wix.com Ltd., an Israeli company.
“Electronic Certificate” means any electronic book entry maintained by the Registrar that represents any Warrants held by a Holder.
“Ex-Dividend Date” means, with respect to an issuance, dividend or distribution on the Ordinary Shares, the first date on which Ordinary Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance, dividend or distribution (including pursuant to due bills or similar arrangements required by the relevant stock exchange). For the avoidance of doubt, any alternative trading convention on the applicable exchange or market in respect of the Ordinary Shares under a separate ticker symbol or CUSIP number will not be considered “regular way” for this purpose.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Exercise” means the exercise of any Warrant by a Holder. The terms “Exercised” and “Exercisable” will have a meaning correlative to the foregoing.
“Exercise Agent” has the meaning set forth in Section 3(e)(i).
“Exercise Consideration” means, with respect to the Exercise of any Warrant, (i) if the Settlement Method for such Exercise is Net-Share Settlement, the Net-Share Settlement Amount (and, if applicable, cash in lieu of fractional shares), or (ii) if the Settlement Method for such Exercise is Cash Settlement, the Cash Settlement Amount, in each case as determined in accordance with Section 5(c).
“Exercise Date” means the first Business Day on which the requirements set forth in Section 5(d)(i) for such Exercise are satisfied.
“Exercise Period” means the period from, and including, May 5, 2026 to, and including, the Exercise Period Expiration Date.
“Exercise Period Expiration Date” means March 5, 2029.
“Exercise Share” means any Ordinary Shares issued or issuable upon Exercise of any Warrant.
“Expiration Date” has the meaning set forth in Section 5(d)(i)(5).
“Expiration Time” has the meaning set forth in Section 5(d)(i)(5).
“Holder” means a person in whose name any Warrant is registered on the Registrar’s books.
“Initial Issue Date” means March 5, 2026.
“Last Reported Sale Price” of the Ordinary Shares for any Trading Day means the closing sale price per share (or, if no closing sale price is reported, the average of the last bid price and the last ask price per share or, if more than one in either case, the average of the average last bid prices and the average last ask prices per share) of the Ordinary Shares on such Trading Day as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Ordinary Shares are then listed. If the Ordinary Shares are not listed on a U.S. national or regional securities exchange on such Trading Day, then the Last Reported Sale Price will be the last quoted bid price per Ordinary Share on such Trading Day in the over-the-counter market as reported by OTC Markets Group Inc. or a similar organization. If the Ordinary Shares are not so quoted on such Trading Day, then the Last Reported Sale Price will be the average of the mid-point of the last bid price and the last ask price per Ordinary Share on such Trading Day from nationally recognized independent investment banking firms the Company selects.
“Lock-Up Agreements” mean, collectively, those certain Lock-Up Agreements, dated as of March 4, 2026, by and among the Company and each of the initial Holders, and any subsequent Lock-Up Agreement by and between the Company and any permitted Holder.
“Make-Whole Fundamental Change” means any of the following events:
(A) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than the Company, its Wholly Owned Subsidiaries and the employee benefit plans of the Company and its Wholly Owned Subsidiaries, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of Ordinary Shares representing more than 50% of the voting power of the Ordinary Shares;
(B) the consummation of (i) any recapitalization, reclassification or change of the Ordinary Shares (other than changes resulting from a subdivision or combination) as a result of which the Ordinary Shares would be converted into, or exchanged for, stock, other securities, other property or assets; (ii) any share exchange, consolidation or merger or statutory scheme of arrangement of the Company pursuant to which the Ordinary Shares will be converted into cash, securities or other property or assets; or (iii) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the Company’s Wholly Owned Subsidiaries; or
(C) the Ordinary Shares cease to be listed or quoted on any of The New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or any of their respective successors) for a period of at least five (5) consecutive Trading Days;
provided, however, that a transaction or event described in clause (A) or (B) above shall not constitute a Make-Whole Fundamental Change, if at least 90% of the consideration received or to be received by holders of the Ordinary Shares, excluding cash payments for fractional shares and cash payments made in respect of dissenters’ statutory appraisal rights, in connection with such transaction or transactions consists of shares of common equity that are listed or quoted on any of The New York Stock Exchange, The Nasdaq Global Select Market or The Nasdaq Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or event, and such transaction or event constitutes an Ordinary Shares Change Event whose Reference Property consists of such consideration; and
further provided, that for the purposes of this definition, (x) any transaction or event described in both clause (A) and in clause (B)(i) or (ii) above will be deemed to occur solely pursuant to clause (B)(ii) above; and (y) whether a Person is a “beneficial owner,” whether shares are “beneficially owned,” and percentage beneficial ownership, will be determined in accordance with Rule 13d-3 under the Exchange Act, but without regard to paragraph (d)(1) of such Rule;
“Make-Whole Fundamental Change Exercise Period” means, in the case of a Make-Whole Fundamental Change, the period from, and including, the Make-Whole Fundamental Change Effective Date of such Make-Whole Fundamental Change to, and including, the thirty-fifth (35th) Trading Day after such Make-Whole Fundamental Change Effective Date.
“Make-Whole Fundamental Change Effective Date” means the date on which such Make-Whole Fundamental Change occurs or becomes effective.
“Make-Whole Fundamental Change Shares” has the meaning set forth in Section 5(g)(i).
“Make-Whole Fundamental Change Share Price” has the following meaning for any Make-Whole Fundamental Change: (a) if the holders of Ordinary Shares receive only cash in consideration for their Ordinary Shares in such Make-Whole Fundamental Change and such Make-Whole Fundamental Change is pursuant to clause (B) of the definition of “Make-Whole Fundamental Change,” then the Make-Whole Fundamental Change Share Price is the amount of cash paid per Ordinary Share in such Make-Whole Fundamental Change; and (b) in all other cases, the Make-Whole Fundamental Change Share Price is the average of the Last Reported Sale Prices per Ordinary Share for the five (5) consecutive Trading Days ending on, and including, the Trading Day immediately before the Make-Whole Fundamental Change Effective Date of such Make-Whole Fundamental Change.
“Market Disruption Event” means, with respect to any date, the occurrence or existence, during the one-half hour period ending at the scheduled close of trading on such date on the principal U.S. national or regional securities exchange or other market on which the Ordinary Shares are listed for trading or trades, of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant exchange or otherwise) in the Ordinary Shares or in any options contracts or futures contracts relating to the Ordinary Shares.
“Net-Share Settlement” means, with respect to the Exercise of any Warrant, settlement of such Exercise by delivery of the Net-Share Settlement Amount.
"Net-Share Settlement Amount" means, with respect to the Exercise of any Warrant, a number of Ordinary Shares equal to the greater of (x) zero; and (y) an amount equal to:
where:
N x VP-SP
VP
N = the number of Underlying Shares of such Warrant that are being so Exercised;
VP = the Valuation Price per Ordinary Share for such Exercise; and
SP = the Strike Price in effect immediately after the Close of Business on such Exercise Date.
“Officer” means the President, the Chief Executive Officer, the Chief Financial Officer, the Treasurer, the Secretary, any Executive or Senior Vice President or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”) of the Company.
“Open of Business” means 9:00 a.m., New York City time.
“Ordinary Shares” means the ordinary shares, NIS 0.01 par value per share, of the Company, subject to Section 5(h).
“Ordinary Shares Change Event” has the meaning set forth in Section 5(h)(i).
“Ownership Limitation” has the meaning set forth in Section 5(i)(i).
“Paying Agent” has the meaning set forth in Section 3(e)(i).
“Person” or “person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof. Any division or series of a limited liability company, limited partnership or trust will constitute a separate “person” under this Warrant Agreement.
“Physical Certificate” means any certificate (other than an Electronic Certificate) representing Warrants held by a Holder, which certificate is substantially in the form set forth in Exhibit A, registered in the name of the Holder of such Warrant and duly executed by the Company.
“Placement Agent” means J.P. Morgan Securities LLC, in its capacity as placement agent in connection with the issuance of the Warrants.
“Record Date” means, with respect to any dividend or distribution on, or issuance to holders of, Ordinary Shares, the date fixed (whether by law, contract or the Board of Directors or otherwise) to determine the holders of Ordinary Shares that are entitled to such dividend, distribution or issuance.
“Reference Property” has the meaning set forth in Section 5(h)(i).
“Reference Property Unit” has the meaning set forth in Section 5(h)(i).
“Register” has the meaning set forth in Section 3(e)(ii).
“Registrar” has the meaning set forth in Section 3(e)(i).
“Restricted Security Legend” means a legend substantially in the form set forth in Exhibit B.
“Rule 144” means Rule 144 under the Securities Act (or any successor rule thereto), as the same may be amended from time to time.
“Scheduled Trading Day” means any day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange on which the Ordinary Shares are then listed or, if the Ordinary Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Ordinary Shares are then traded. If the Ordinary Shares are not so listed or traded, then “Scheduled Trading Day” means a Business Day.
“Securities Act” means the U.S. Securities Act of 1933, as amended.
“Security” means any Warrant or Exercise Share, subject to Section 5(h)(i).
1.“Settlement Method” means, with respect to the Exercise of any Warrant, Cash Settlement or Net-Share Settlement, as elected (or deemed to have been elected) by the Company pursuant to Section 5(c)(i).
“Specified Courts” has the meaning set forth in Section 8(c).
“Spin-Off” has the meaning set forth in Section 5(d)(i)(3)(B).
“Spin-Off Valuation Period” has the meaning set forth in Section 5(d)(i)(3)(B).
“Strike Price” initially means $104.73 per Ordinary Share; provided, however, that the Strike Price is subject to adjustment pursuant to Sections 5(d) and 5(e). Each reference in this Warrant Agreement or any Certificate to the Strike Price as of a particular date without setting forth a particular time on such date will be deemed to be a reference to the Strike Price immediately after the Close of Business on such date.
“Subsidiary” means, with respect to any Person, (a) any corporation, association or other business entity (other than a partnership or limited liability company) of which more than 50% of the total voting power of the Capital Stock entitled (without regard to the occurrence of any contingency, but after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees, as applicable, of such corporation, association or other business entity is owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person; and (b) any partnership or limited liability company where (x) more than fifty percent (50%) of the capital accounts, distribution rights, equity and voting interests, or of the general and limited partnership interests, as applicable, of such partnership or limited liability company are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person, whether in the form of membership, general, special or limited partnership or limited liability company interests or otherwise; and (y) such Person or any one or more of the other Subsidiaries of such Person is a controlling general partner of, or otherwise controls, such partnership or limited liability company.
“Successor Person” has the meaning set forth in Section 5(h)(iii).
“Tax” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any governmental authority, including any interest, additions to tax or penalties applicable thereto.
“Tender/Exchange Offer Valuation Period” has the meaning set forth in Section 5(d)(i)(5).
“Trading Day” means any day on which (a) trading in the Ordinary Shares generally occurs on the principal U.S. national or regional securities exchange on which the Ordinary Shares are then listed or, if the Ordinary Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Ordinary Shares are then traded; and (b) there is no Market Disruption Event. If the Ordinary Shares are not so listed or traded, then “Trading Day” means a Business Day.
“Transfer-Restricted Security” means any Security that constitutes a “restricted security” (as defined in Rule 144); provided, however, that such Security will cease to be a Transfer-Restricted Security upon the earliest to occur of the following events:
(a) such Security is sold or otherwise transferred to a Person (other than the Company or an Affiliate of the Company) pursuant to a registration statement that was effective under the Securities Act at the time of such sale or transfer;
(b) such Security is sold or otherwise transferred to a Person (other than the Company or an Affiliate of the Company) pursuant to an available exemption (including Rule 144) from the registration and prospectus-delivery requirements of, or in a transaction not subject to, the Securities Act and, immediately after such sale or transfer, such Security ceases to constitute a “restricted security” (as defined in Rule 144); and
(c) (i) such Security is eligible for resale, by a Person that is not an Affiliate of the Company and that has not been an Affiliate of the Company during the immediately preceding three (3) months, pursuant to Rule 144 without any limitations thereunder as to volume, manner of sale, availability of current public information or notice and (ii) the Company has received such certificates or other documentation or evidence as the Company may reasonably require to determine that the Holder or beneficial owner of such Security is not, and that has not been during the immediately preceding three (3) months, an Affiliate of the Company.
“Underlying Shares” initially means, with respect to any Warrant, that number of Ordinary Shares identified as the initial number of “Underlying Shares” in the Certificate representing such Warrant; provided, however, that (a) the number of Underlying Shares of each Warrant will be subject to adjustment pursuant to Sections 5(d) and 5(e); and (b) upon the Exercise of any Warrant (or any portion thereof representing less than all of the Underlying Shares thereof), the number of Underlying Shares of such Warrant will be reduced, effective as of the time such Warrant (or such portion thereof) ceases to be outstanding pursuant to Section 3(l), by the number of Underlying Shares so Exercised.
“Valuation Price” means, with respect to the Exercise of any Warrant, the Last Reported Sale Price per Ordinary Share on the Exercise Date for such Exercise (or, if such Exercise Date is not a Trading Day, the immediately preceding Trading Day).
“Warrant” means each warrant issued by the Company pursuant to, and having the terms, and conferring to the Holders thereof the rights set forth in this Warrant Agreement.
Subject to the terms of this Warrant Agreement, each Warrant will be Exercisable for Ordinary Shares based on the number of Underlying Shares of such Warrant and the Strike Price.
“Warrant Agreement” means this Warrant Agreement, as amended or supplemented from time to time.
“Wholly Owned Subsidiary” of a Person means any Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors’ qualifying shares) are owned by such Person or one or more Wholly Owned Subsidiaries of such Person.
2.Rules of Construction. For purposes of this Warrant Agreement:
(a) “or” is not exclusive;
(b) “including” means “including without limitation”;
(c) “will” expresses a command;
(d) the “average” of a set of numerical values refers to the arithmetic average of such numerical values;
(e) a merger involving, or a transfer of assets by, a limited liability company, limited partnership or trust will be deemed to include any division of or by, or an allocation of assets to a series of, such limited liability company, limited partnership or trust, or any unwinding of any such division or allocation;
(f) words in the singular include the plural and in the plural include the singular, unless the context requires otherwise;
(g) “herein,” “hereof” and other words of similar import refer to this Warrant Agreement as a whole and not to any particular Section or other subdivision of this Warrant Agreement, unless the context requires otherwise;
(h) references to currency mean the lawful currency of the United States of America, unless the context requires otherwise; and
(i) the exhibits, schedules and other attachments to this Warrant Agreement are deemed to form part of this Warrant Agreement.
3.The Warrants
a.Original Issuance of Warrants
On the Initial Issue Date, there will be originally issued Warrants having an aggregate of 816,674 Underlying Shares, which Warrants will be initially registered in the names and amounts set forth in Schedule A. For the avoidance of doubt, the number of Underlying Shares for the Warrants is subject to adjustment pursuant to Section 5(d).
b.Form, Dating and Denominations
i.Form and Date of Certificates Representing Warrants. Each Certificate representing any Warrants will (1) be substantially in the form set forth in Exhibit A; (2) bear the legends required by Section 3(f) and may bear notations, legends or endorsements required by law, stock exchange rule or usage; and (3) be dated as of the date it is executed by the Company.
ii.Electronic Certificates; Physical Certificates. The Warrants will be originally issued initially in the form of one (1) Electronic Certificate for each Holder. Electronic Certificates may be exchanged for Physical Certificates, and Physical Certificates may be exchanged for Electronic Certificates, upon request by the Holder thereof pursuant to customary procedures, subject to Section 3(g).
iii.Electronic Certificates; Interpretation. For purposes of this Warrant Agreement, (1) each Electronic Certificate will be deemed to include the text of the form of Certificate set forth in Exhibit A; (2) any legend, registration number or other notation that is required to be included on a Certificate will be deemed to be affixed to any Electronic Certificate notwithstanding that such Electronic Certificate may be in a form that does not permit affixing legends thereto; (3) any reference in this Warrant Agreement to the “delivery” of any Electronic Certificate will be deemed to be satisfied upon the registration of the electronic book entry representing such Electronic Certificate in the name of the applicable Holder; (4) upon satisfaction of any applicable requirements of the Registrar, in each case for the issuance of Warrants in the form of one or more Electronic Certificates, such Electronic Certificates will be deemed to be executed by the Company.
iv.No Bearer Certificates. The Warrants will be issued only in registered form.
v.Registration Numbers. Each Certificate representing any Warrants will bear a unique registration number that is not affixed to any other Certificate representing any other outstanding Warrants.
c.Execution and Delivery
A duly authorized Officer will sign each Certificate representing any Warrants on behalf of the Company by manual or digital signature.
d.Method of Payment; Delay When Payment Date is Not a Business Day
i.Method of Payment. The Company will pay all cash amounts due on any Warrant of any Holder by wire transfer of immediately available funds to the account of such Holder within the United States specified in a written request of such Holder delivered to the Company no later than the Close of Business on the date that is five (5) Business Days immediately before the date such payment is due (or, with respect to any cash Exercise Consideration due to settle an Exercise of such Warrant, specified in the related Exercise Notice).
ii.Delay of Payment when Payment Date is Not a Business Day. If the due date for a payment on any Warrant as provided in this Warrant Agreement is not a Business Day, then, notwithstanding anything to the contrary in this Warrant Agreement, such payment may be made on the immediately following Business Day and no interest or other amount will accrue or accumulate on such payment as a result of the related delay. Solely for purposes of the immediately preceding sentence, a day on which the applicable place of payment is authorized or required by law or executive order to close or be closed will be deemed not to be a “Business Day.”
e.Registrar, Paying Agent and Exercise Agent
.
i.Generally. The Company designates the principal executive offices of its Subsidiary, Wix.com, Inc., a Delaware corporation, as an office or agency where Warrants may be presented for (1) registration of transfer or for exchange (the “Registrar”); (2) payment (the “Paying Agent”); and (3) Exercise (the “Exercise Agent”). At all times when any Warrant is outstanding, the Company will maintain an office in the continental United States constituting the Registrar, Paying Agent and Exercise Agent. For the avoidance of doubt, the Placement Agent shall not act as, and shall have no duties or obligations as, Registrar, Paying Agent, Exercise Agent or in any similar capacity under this Warrant Agreement.
ii.Maintenance of the Register. The Company will keep, or cause there to be kept, a record (the “Register”) of the names and addresses of the Holders, the number of Warrants (and the respective numbers of Underlying Shares thereof) held by each Holder and the transfer, exchange and Exercise of the Warrants. Absent manifest error, the entries in the Register will be conclusive and the Company and each Agent may treat each Person whose name is recorded as a Holder in the Register as a Holder for all purposes. The Register will be in written form or in any form capable of being converted into written form reasonably promptly. The Company will provide a copy of the Register to any Holder upon its request as soon as reasonably practicable.
iii.Subsequent Appointments. By notice to each Holder, the Company may, at any time, appoint any Person (including any Subsidiary of the Company) to act as Registrar, Paying Agent or Exercise Agent.
iv.Duties When the Company or its Subsidiary Acts as Paying Agent or Exercise Agent. If the Company or any of its Subsidiaries acts as Paying Agent or Exercise Agent, then (1) it will segregate for the benefit of the Holders all money and other property held by it as Paying Agent or Exercise Agent; and (2) references in this Warrant Agreement to the Paying Agent or Exercise Agent holding cash or other property, or to the delivery of cash or other property to the Paying Agent or Exercise Agent, in each case for payment or delivery to any Holders or with respect to any Warrant, will be deemed to refer to cash or other property so segregated and held separately, or to the segregation and separate holding of such cash or other property, respectively.
f.Legends
.
i.Restricted Security Legend.
1.Each Certificate representing any Warrant that is a Transfer-Restricted Security will bear the Restricted Security Legend; and
2.If any Warrant (such Warrant being referred to as the “new Warrant” for purposes of this Section 3(f)(i)(2)) is issued in exchange for, or in substitution of, other Warrant(s), or to effect the Exercise of less than all of the Underlying Shares of a Warrant represented by any Certificate (such other Warrant(s) or Exercised Warrant, as applicable, being referred to as the “old Warrant(s)” for purposes of this Section 3(f)(i)(2)), including pursuant to Section 3(g)(ii), 3(h) or 3(i), then the Certificate representing such new Warrant will bear the Restricted Security Legend if the Certificate representing such old Warrant(s) bore the Restricted Security Legend at the time of such exchange or substitution, or on the related Exercise Date with respect to such Exercise, as applicable; provided, however, that the Certificate representing such new Warrant need not bear the Restricted Security Legend if such new Warrant does not constitute a Transfer-Restricted Security immediately after such exchange or substitution, or as of such Exercise Date, as applicable.
(ii) Other Legends on Certificates. The Certificate representing any Warrant may bear any other legend or text, not inconsistent with this Warrant Agreement, as may be required by applicable law or by any securities exchange or automated quotation system on which such Warrant is traded or quoted or as may be otherwise reasonably determined by the Company to be appropriate.
(iii) Acknowledgement and Agreement by the Holders. A Holder’s acceptance of any Warrant represented by a Certificate bearing any legend required by this Section 3(f) will constitute such Holder’s acknowledgement of, and agreement to comply with, the restrictions set forth in such legend.
(iv) Legends on Exercise Shares. Each Exercise Share will bear a legend substantially to the same effect as the Restricted Security Legend if the Warrant upon the Exercise of which such Exercise Share was issued was (or would have been had it not been Exercised) a Transfer-Restricted Security at the time such Exercise Share was issued; provided, however, that such Exercise Share need not bear such a legend if the Company determines, in its reasonable discretion, that such Exercise Share need not bear such a legend. Notwithstanding anything to the contrary in Section 3(f)(iv)(1), an Exercise Share need not bear a legend pursuant to Section 3(f)(iv)(1) if such Exercise Share is issued in an uncertificated form that does not permit affixing legends thereto, provided the Company takes measures (including, if applicable, the assignment thereto of a “restricted” CUSIP number) that it reasonably deems appropriate to enforce the transfer restrictions referred to in such legend.
(g) Transfers and Exchanges; Transfer Taxes; Certain Transfer Restrictions.
(i) Provisions Applicable to All Transfers and Exchanges.
(1)Generally. Subject to this Section 3(g) and any applicable Lock-Up Agreement, any Warrant represented by any Certificate may be transferred or exchanged from time to time and the Company will cause the Registrar to record each such transfer or exchange in the Register.
(2) No Services Charge; Transfer Taxes. The Company and the Agents will not impose any service charge on any Holder for any transfer, exchange or Exercise of any Warrant, but the Company, the Registrar and the Exercise Agent may require payment of a sum sufficient to cover any transfer tax or other governmental charge that may be imposed in connection with any transfer, exchange or Exercise of any Warrant, other than exchanges pursuant to Section 3(h) not involving any transfer.
(3) Transfers and Exchanges Must Be in Authorized Denominations. Notwithstanding anything to the contrary in this Warrant Agreement, all transfers or exchanges of Warrants must be in an Authorized Denomination.
(4) Legends. Each Certificate representing any Warrant that is issued upon transfer of, or in exchange for, another Warrant will bear each legend, if any, required by Section 3(f).
(5) Settlement of Transfers and Exchanges. Upon satisfaction of the requirements of this Warrant Agreement to effect a transfer or exchange of any Warrant, the Company will cause such transfer or exchange to be effected as soon as reasonably practicable but in no event later than the second (2nd) Business Day after the date of such satisfaction.
(6) Exchanges to Remove Transfer Restrictions. For the avoidance of doubt, and subject to the terms of this Warrant Agreement, as used in this Section 3(g), an “exchange” of a Certificate includes an exchange effected for the sole purpose of removing any Restricted Security Legend affixed to such Certificate.
(ii) Transfers and Exchanges of Warrants.
(1) Subject to this Section 3(g), a Holder of any Warrant represented by a Certificate may (A) transfer any Authorized Denomination of such Warrant to one or more other Person(s); and (B) exchange any Authorized Denomination of such Warrant for Warrant(s) that (x) represent that same aggregate number of Underlying Shares as the number of Underlying Shares being exchanged; and (y) are represented by one or more other Certificates; provided, however, that, to effect any such transfer or exchange, such Holder must:
(A) if such Certificate is a Physical Certificate, surrender such Physical Certificate to the office of the Registrar, together with any endorsements or transfer instruments reasonably required by the Company or the Registrar; and
(B) deliver to the Company and the Registrar such certificates or other documentation or evidence as the Company and the Registrar may reasonably require to determine that such transfer complies with the Securities Act and other applicable securities laws.
(2) Upon the satisfaction of the requirements of this Warrant Agreement to effect a transfer or exchange of any Authorized Denomination of a Holder’s Warrant represented by a Certificate (such Certificate being referred to as the “old Certificate” for purposes of this Section 3(g)(ii)(2)): (A) such old Certificate will be promptly cancelled pursuant to Section 3(k); (B) if less than all of the Underlying Shares of the Warrant represented by such old Certificate are to be so transferred or exchanged, then the Company will issue, execute and deliver, in accordance with Section 3(c), one or more Certificates that (x) in the aggregate, represent a total number of Underlying Shares equal to the number of Underlying Shares represented by such old Certificate not to be so transferred or exchanged; (y) are registered in the name of such Holder; and (z) bear each legend, if any, required by Section 3(f); (C) in the case of a transfer to a transferee, the Company will issue, execute and deliver, in accordance with Section 3(c), one or more Certificates that (x) in the aggregate, represent a total number of Underlying Shares equal to the number of Underlying Shares to be so transferred; (y) are registered in the name of such transferee; and (z) bear each legend, if any, required by Section 3(f); and (D) in the case of an exchange, the Company will issue, execute and deliver, in accordance with Section 3(c), one or more Certificates that (x) in the aggregate, represent a total number of Underlying Shares equal to the number of Underlying Shares to be so exchanged; (y) are registered in the name of the Person to whom such old Certificate was registered; and (z) bear each legend, if any, required by Section 3(f).
(iii) Transfers of Warrants Subject to Exercise. Notwithstanding anything to the contrary in this Warrant Agreement, the Company and the Registrar will not be required to register the transfer of or exchange any Warrant that has been surrendered for Exercise.
(h) Exchange and Cancellation of Exercised Warrants.
(i) Partial Exercises of Physical Certificates. If less than all of the Underlying Shares of a Holder’s Warrant represented by a Physical Certificate (such Physical Certificate being referred to as the “old Physical Certificate” for purposes of this Section 3(h)(i)) are Exercised pursuant to Section 5, then, as soon as reasonably practicable after such old Physical Certificate is surrendered for such Exercise, the Company will cause such old Physical Certificate to be exchanged, pursuant and subject to Section 3(g)(ii), for (1) one or more Physical Certificates that, in the aggregate, represent a total number of Underlying Shares equal to the number of Underlying Shares represented by such old Physical Certificate that are not to be so Exercised and deliver such Physical Certificate(s) to such Holder; and (2) a Physical Certificate representing a total number of Underlying Shares equal to the number of Underlying Shares represented by such old Physical Certificate that are to be so Exercised, which Physical Certificate will be Exercised pursuant to the terms of this Warrant Agreement; provided, however, that the Physical Certificate referred to in this clause (2) need not be issued at any time after which the Warrant that would otherwise be represented by such Physical Certificate would be deemed to cease to be outstanding pursuant to Section 3(l).
(ii) Cancellation of Warrants That Are Exercised. If the Underlying Shares of a Holder’s Warrant represented by a Certificate (or any portion thereof that has not theretofore been exchanged pursuant to Section 3(h)(i)) (such Certificate being referred to as the “old Certificate” for purposes of this Section 3(h)(ii)) are Exercised pursuant to Section 5, then, promptly after the later of the time such Warrant (or the portion thereof representing the Underlying Shares so Exercised) is deemed to cease to be outstanding pursuant to Section 3(l) and the time such old Certificate is surrendered for such Exercise, (1) such old Certificate will be cancelled pursuant to Section 3(k); and (2) in the case of a partial Exercise, the Company will issue, execute and deliver to such Holder, in accordance with Section 3(c), one or more Certificates that (x) in the aggregate, represent a total number of Underlying Shares equal to the number of Underlying Shares represented by such old Certificate that are not to be so Exercised; (y) are registered in the name of such Holder; and (z) bear each legend, if any, required by Section 3(f).
(i) Replacement Certificates . If a Holder of any Warrant(s) claims that the Certificate(s) representing such Warrant(s) have been mutilated, lost, destroyed or wrongfully taken, then the Company will issue, execute and deliver, in accordance with Section 3(c), one or more replacement Certificates representing such Warrant(s) upon surrender to the Company or the Registrar of such mutilated Certificate(s), or upon delivery to the Company or the Registrar of evidence of such loss, destruction or wrongful taking reasonably satisfactory to the Company and the Registrar. In the case of a lost, destroyed or wrongfully taken Certificate representing any Warrant, the Company and Registrar may require the Holder thereof to provide such security or indemnity that is reasonably satisfactory to the Company and the Registrar to protect the Company and the Registrar from any loss that any of them may suffer if such Certificate is replaced.
Every replacement Warrant issued pursuant to this Section 3(i) will, upon such replacement, be deemed to be an outstanding Warrant, entitled to all of the benefits of this Warrant Agreement equally and ratably with all other Warrants then outstanding.
(j) Registered Holders. Only the Holder of any Warrant(s) will have rights under this Warrant Agreement as the owner of such Warrant(s).
(k) Cancellation. Without limiting the generality of the last sentence of Section 3(n), the Company may at any time deliver any Warrant to the Registrar for cancellation. The Paying Agent and the Exercise Agent will forward to the Registrar each Warrant duly surrendered to them for transfer, exchange or Exercise. The Company will cause the Registrar to promptly cancel all Warrants so surrendered to it in accordance with its customary procedures.
(l) Outstanding Warrants.
(i) Generally. The Warrants that are outstanding at any time will be deemed to be those Warrants that, at such time, have been duly executed by the Company, excluding those Warrants (or any portions of any Warrants representing less than all of the initial number of Underlying Shares thereof) that have theretofore been (1) cancelled by the Registrar or delivered to the Registrar for cancellation in accordance with Section 3(k); (2) paid or settled in full upon their Exercise in accordance with this Warrant Agreement; or (3) deemed to cease to be outstanding to the extent provided in, and subject to, clause (ii), (iii) or (iv) of this Section 3(l).
(ii) Replaced Warrants. If any Certificate representing any Warrant is replaced pursuant to Section 3(i), then such Warrant will cease to be outstanding at the time of such replacement, unless the Registrar and the Company receive proof reasonably satisfactory to them that such Warrant is held by a “bona fide purchaser” under applicable law.
(iii) Exercised Warrants. If any Warrant(s) (or any portions of any Warrant(s) representing less than all of the Underlying Shares thereof) are Exercised, then, at the Close of Business on the Exercise Date for such Exercise (unless there occurs a default in the delivery of the Exercise Consideration due pursuant to Section 5 upon such Exercise): (1) such Warrant(s) (or such portions thereof) will be deemed to cease to be outstanding; and (2) the rights of the Holder(s) of such Warrant(s) (or such portions thereof), as such, will terminate with respect to such Warrant(s) (or such portions thereof), other than the right to receive such Exercise Consideration as provided in Section 5.
(iv) Warrants Remaining Unexercised as of the Exercise Period Expiration Date. If any Warrant(s) are otherwise outstanding as of the Close of Business on the Exercise Period Expiration Date, then such Warrant(s) will cease to be outstanding as of immediately after the Close of Business on the Exercise Period Expiration Date.
(v) Certificates Need Not Be Amended. A reduction in the number of Underlying Shares of any Warrant as a result of a Warrant (or any portion thereof representing less than all of the Underlying Shares thereof) ceasing to be outstanding pursuant to this Section 3(l) will be effective without the need to notate the same on, or otherwise amend, the Certificate representing such Warrant.
(m) No Rights as a Shareholder. Except as otherwise specifically provided in this Warrant Agreement prior to the time at which a Holder that exercises any Warrant is deemed, pursuant to Section 5(b)(ii), to become the holder of record of the Exercise Share(s) issuable to settle such exercise, (i) the Holder shall not be entitled to vote or receive dividends on, or be deemed the holder of, such Exercise Share(s) for any purpose; and (ii) nothing contained in this Warrant Agreement will be construed to confer upon the Holder, as such, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of share capital, reclassification of share capital, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise.
(n) Repurchases of Warrants by the Company and its Subsidiaries . Without limiting the generality of Section 3(k) and the next sentence, the Company may, from time to time, repurchase any Warrant(s) in open market purchases or in negotiated transactions without delivering prior notice to Holders. The Company will promptly deliver to the Registrar for cancellation all Warrants that the Company or any of its Subsidiaries have purchased or otherwise acquired.
Section 4. No Right of Redemption by the Company . The Company does not have the right to redeem the Warrants at its election.
. Exercise of Warrants.
(a) Exercise at the Option of the Holders.
(i) Exercise Right; When Warrants May Be Submitted for Exercise. Subject to Section 5(b)(i)(3), Holders will have the right to submit all, or any Authorized Denomination, of their Warrants for Exercise at any time during the Exercise Period.
(ii) Exercises of Warrants Not In Authorized Denominations Prohibited. Notwithstanding anything to the contrary in this Warrant Agreement, in no event will any Holder be entitled to Exercise any Warrant other than in an Authorized Denomination thereof.
(b) Exercise Procedures.
(i) Requirements for Holders to Exercise Their Exercise Right.
(1) Generally. To Exercise any Warrant represented by a Certificate, the Holder of such Warrant must (v) complete, manually sign and deliver to the Exercise Agent an Exercise Notice (at which time, in the case such Certificate is an Electronic Certificate, such Exercise will become irrevocable); (w) if such Certificate is a Physical Certificate, deliver such Physical Certificate to the Exercise Agent (at which time such Exercise will become irrevocable); (x) furnish any endorsements and transfer documents that the Company or the Exercise Agent may require; and (y) if applicable, pay any documentary or other taxes pursuant to Section 6(d).
(2) Payment of Strike Price in Cash Unnecessary. The Exercise of any Warrant will not require any Holder make any cash payment in respect of the Strike Price.
(3) Exercise Permitted only During Business Hours. Warrants may be surrendered for Exercise only after the Open of Business and before the Close of Business on a day that is a Business Day that occurs during the Exercise Period.
(ii) When Holders Become Shareholders of Record of the Ordinary Shares Issuable Upon Exercise. The Person in whose name any Ordinary Share is issuable upon Exercise of any Warrant will be deemed to become the holder of record of such Ordinary Share as of the Close of Business on the Exercise Date for such Exercise.
(iii) Minimum Exercise Requirements. Notwithstanding anything to the contrary in this Section 5, no Holder will be entitled to Exercise any Warrants unless the aggregate number of Underlying Shares of all Warrants Exercised by such Holder on the same Exercise Date is at least ten thousand (10,000) (or such lesser number of Underlying Shares as such Holder then beneficially owns).
(c) Settlement Upon Exercise.
(i) Settlement Method. Upon the Exercise of any Warrant, the Company will settle such Exercise by Net Share Settlement or Cash Settlement, at the Company’s election. The Company will notify the Holder of its election of a Settlement Method within one Business Day after the relevant Exercise Date, and if the Company fails to deliver a timely notice, it shall be deemed to have elected Net-Share Settlement.
(ii) Exercise Consideration. Subject to Section 5(c)(iii), Section 5(h) and Section 7(b), and the final paragraph of this Section 5(c)(ii), the consideration due upon settlement of the Exercise of each Warrant will be:
(1) If Net-Share Settlement applies to such Exercise, a number of Ordinary Shares equal to the Net-Share Settlement Amount; or
(2) If Cash Settlement applies to such Exercise, the amount of cash equal to the Cash Settlement Amount.
For the avoidance of doubt, if the Valuation Price does not exceed the Strike Price on the Exercise Date, the Exercise Consideration (whether the Cash Settlement Amount or Net-Share Settlement Amount) will be zero, subject to the final paragraph of this Section 5(c)(ii).
In addition, if a Make-Whole Fundamental Change relating to such Warrant has occurred and the Exercise Date for the Exercise of such Warrant occurs during the related Make-Whole Fundamental Change Exercise Period, then: (x) if the Settlement Method is Net-Share Settlement, the Exercise Consideration for such Exercise will include, in addition to the Net-Share Settlement Amount, an additional number of Ordinary Shares equal to the product of (I) the number of Underlying Shares of such Warrant that are being so Exercised and (II) the number of Make-Whole Fundamental Change Shares for such Make-Whole Fundamental Change; or (y) if the Settlement Method is Cash Settlement, the Exercise Consideration for such Exercise will include, in addition to the Cash Settlement Amount, an additional amount of cash equal to the product of (I) the number of Underlying Shares of such Warrant that are being so Exercised, (II) the number of Make-Whole Fundamental Change Shares for such Make-Whole Fundamental Change, and (III) the Valuation Price.
(iii) Payment of Cash in Lieu of any Fractional Ordinary Shares. Subject to Section 7(b), in lieu of delivering any fractional Ordinary Share otherwise due upon Exercise of any Warrant, the Company will pay cash based on the Valuation Price.
(iv) Delivery of Exercise Consideration. Except as provided in Sections 5(d)(i)(3)(B), 5(d)(i)(5) and 5(h)(i)(B), the Company will pay or deliver, as applicable, the Exercise Consideration due upon Exercise of any Warrant on or before the second (2nd) Business Day immediately after the Exercise Date for such Exercise.
(d) Strike Price and Number of Underlying Shares Adjustments.
(i) Events Requiring an Adjustment to the Strike Price and the Number of Underlying Shares. Each of the Strike Price and the number of Underlying Shares of each Warrant will be adjusted from time to time as follows: (1) Share Dividends, Splits and Combinations. If the Company issues solely Ordinary Shares as a dividend or distribution on all or substantially all shares of the Ordinary Shares, or if the Company effects a share split or combination of the Ordinary Shares (in each case excluding an issuance solely pursuant to an Ordinary Shares Change Event, as to which Section 5(h) will apply), then the Strike Price will be adjusted based on the following formula (with a corresponding adjustment to the number of Underlying Shares of each Warrant pursuant to Section 5(d)(i)(6)):
SP1 = SP0X OS0
OS1
where:
SP0 = the Strike Price in effect immediately before the Open of Business on the Ex-Dividend Date for such dividend or distribution, or immediately before the Open of Business on the effective date of such share split or share combination, as applicable;
SP1 = the Strike Price in effect immediately after the Open of Business on such Ex-Dividend Date or effective date, as applicable;
OS0 = the number of Ordinary Shares outstanding immediately before the Open of Business on such Ex-Dividend Date or effective date, as applicable, without giving effect to such dividend, distribution, share split or share combination; and
OS1 = the number of Ordinary Shares outstanding immediately after giving effect to such dividend, distribution, share split or share combination.
If any dividend, distribution, share split or share combination of the type described in this Section 5(d)(i)(1) is declared or announced, but not so paid or made, then each of the Strike Price and the number of Underlying Shares of each Warrant will be readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution or to effect such share split or share combination, to the Strike Price and the number of Underlying Shares, respectively, that would then be in effect had such dividend, distribution, share split or share combination not been declared or announced.
(2) Rights, Options and Warrants. If the Company distributes, to all or substantially all holders of Ordinary Shares, rights, options or warrants (other than rights issued or otherwise distributed pursuant to a shareholder rights plan, as to which Section 5(d)(i)(3)(A) and Section 5(d)(vi) will apply) entitling such holders, for a period of not more than sixty (60) calendar days after the Record Date of such distribution, to subscribe for or purchase Ordinary Shares at a price per share that is less than the average of the Last Reported Sale Prices per Ordinary Share for the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before the date such distribution is announced, then the Strike Price will be adjusted based on the following formula (with a corresponding adjustment to the number of Underlying Shares of each Warrant pursuant to Section 5(d)(i)(6)):
SP1 = SP0 X OS+Y
OS+X
where:
SP0 = the Strike Price in effect immediately before the Open of Business on the Ex-Dividend Date for such distribution; S
P1 = the Strike Price in effect immediately after the Open of Business on such Ex-Dividend Date;
OS = the number of Ordinary Shares outstanding immediately before the Open of Business on such Ex-Dividend Date;
Y = a number of Ordinary Shares obtained by dividing (x) the aggregate price payable to exercise such rights, options or warrants by (y) the average of the Last Reported Sale Prices per Ordinary Share for the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before the date such distribution is announced; and
X = the total number of Ordinary Shares issuable pursuant to such rights, options or warrants.
To the extent such rights, options or warrants are not so distributed, each of the Strike Price and the number of Underlying Shares of each Warrant will be readjusted to the Strike Price and the number of Underlying Shares, respectively, that would then be in effect had the adjustment thereto for such distribution been made on the basis of only the rights, options or warrants, if any, actually distributed. In addition, to the extent that Ordinary Shares are not delivered after the expiration of such rights, options or warrants (including as a result of such rights, options or warrants not being exercised), each of the Strike Price and the number of Underlying Shares of each Warrant will be readjusted to the Strike Price and the number of Underlying Shares, respectively, that would then be in effect had the adjustment thereto for such distribution been made on the basis of delivery of only the number of Ordinary Shares actually delivered upon exercise of such rights, options or warrants.
For purposes of this Section 5(d)(i)(2), in determining whether any rights, options or warrants entitle holders of Ordinary Shares to subscribe for or purchase Ordinary Shares at a price per share that is less than the average of the Last Reported Sale Prices per Ordinary Share for the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before the date the distribution of such rights, options or warrants is announced, and in determining the aggregate price payable to exercise such rights, options or warrants, there will be taken into account any consideration the Company receives for such rights, options or warrants and any amount payable on exercise thereof, with the value of such consideration, if not cash, to be determined by the Board of Directors.
(3) Spin-Offs and Other Distributed Property.
(A) Distributions Other than Spin-Offs. If the Company distributes shares of its Capital Stock, evidences of the Company’s indebtedness or other assets or property of the Company, or rights, options or warrants to acquire the Company’s Capital Stock or other securities, to all or substantially all holders of the Ordinary Shares, excluding:
(I) dividends, distributions, rights, options or warrants for which an adjustment to the Strike Price is required (or would be required without regard to Section 5(d)(iii)) pursuant to Section 5(d)(i)(1) or 5(d)(i)(2);
(II) dividends or distributions paid exclusively in cash for which an adjustment to the Strike Price is required (or would be required without regard to Section 5(d)(iii)) pursuant to Section 5(d)(i)(4);
(III) rights issued or otherwise distributed pursuant to a shareholder rights plan, except to the extent provided in Section 5(d)(vi);
(IV) Spin-Offs for which an adjustment to the Strike Price is required (or would be required without regard to Section 5(d)(iii)) pursuant to Section 5(d)(i)(3)(B);
(V) a distribution solely pursuant to a tender offer or exchange offer for Ordinary Shares, as to which Section 5(d)(i)(5) will apply; and
(V) a distribution solely pursuant to an Ordinary Shares Change Event, as to which Section 5(h) will apply,
then the Strike Price will be adjusted based on the following formula (with a corresponding adjustment to the number of Underlying Shares of each Warrant pursuant to Section 5(d)(i)(6)):
SP1 = SP0 X P-FMV SP0 = the Strike Price in effect immediately before the Open of Business on the Ex-Dividend Date for such distribution;
P
where:
SP1 = the Strike Price in effect immediately after the Open of Business on such Ex-Dividend Date;
P = the average of the Last Reported Sale Prices per Ordinary Share for the ten (10) consecutive Trading Days ending on, and including, the Trading Day immediately before such Ex-Dividend Date; and
FMV = the fair market value (as determined by Company in good faith and in a commercially reasonable manner), as of such Ex-Dividend Date, of the shares of Capital Stock, evidences of indebtedness, assets, property, rights, options or warrants distributed per Ordinary Share pursuant to such distribution;
provided, however, that, if FMV is equal to or greater than P, then, in lieu of the foregoing adjustment to the Strike Price (and the corresponding adjustment to the number of Underlying Shares of each Warrant pursuant to Section 5(d)(i)(6)), each Holder will receive, for each Warrant held by such Holder on the Record Date for such distribution, at the same time and on the same terms as holders of Ordinary Shares, the amount and kind of shares of Capital Stock, evidences of indebtedness, assets, property, rights, options or warrants that such Holder would have received in such distribution if such Holder had owned, on such Record Date, a number of Ordinary Shares equal to the number of Underlying Shares of such Warrant as of on such Record Date.
To the extent such distribution is not so paid or made, each of the Strike Price and the number of Underlying Shares of each Warrant will be readjusted to the Strike Price and the number of Underlying Shares, respectively, that would then be in effect had the adjustment thereto been made on the basis of only the distribution, if any, actually made or paid.
(B) Spin-Offs. If the Company distributes or dividends shares of Capital Stock of any class or series, or similar equity interests, of or relating to an Affiliate or Subsidiary or other business unit of the Company to all or substantially all holders of the Ordinary Shares (other than solely pursuant to (x) an Ordinary Shares Change Event, as to which Section 5(h) will apply; or (y) a tender offer or exchange offer for Ordinary Shares, as to which Section 5(d)(i)(5) will apply), and such Capital Stock or equity interests are listed or quoted (or will be listed or quoted upon the consummation of the transaction) on a U.S. national securities exchange (a “Spin-Off”), then the Strike Price will be adjusted based on the following formula (with a corresponding adjustment to the number of Underlying Shares of each Warrant pursuant to Section 5(d)(i)(6)):
SP1 = SP0 X P
FMV+P
where:
SP0 = the Strike Price in effect immediately before the Open of Business on the Ex-Dividend Date for such Spin-Off;
SP1 = the Strike Price in effect immediately after the Open of Business on such Ex-Dividend Date;
P = the average of the Last Reported Sale Prices per Ordinary Share for each Trading Day in the Spin-Off Valuation Period; and
FMV = the product of (x) the average of the Last Reported Sale Prices per share or unit of the Capital Stock or equity interests distributed in such Spin-Off over the ten (10) consecutive Trading Day period (the “Spin-Off Valuation Period”) beginning on, and including, such Ex-Dividend Date (such average to be determined as if references to Ordinary Shares in the definitions of “Last Reported Sale Price,” “Trading Day” and “Market Disruption Event” were instead references to such Capital Stock or equity interests); and (y) the number of shares or units of such Capital Stock or equity interests distributed per Ordinary Share in such Spin-Off.
The adjustment to the Strike Price and the number of Underlying Shares of each Warrant pursuant to this Section 5(d)(i)(3)(B) and Section 5(d)(i)(6), respectively, will be calculated as of the Close of Business on the last Trading Day of the Spin-Off Valuation Period but will be given effect immediately after the Open of Business on the Ex-Dividend Date for the Spin-Off, with retroactive effect. If any Warrant is Exercised and the Exercise Date for such Exercise occurs during the Spin-Off Valuation Period, then, notwithstanding anything to the contrary in this Warrant Agreement, the Company will, if necessary, delay the settlement of such Exercise until the second (2nd) Business Day after the Last Trading Day of the Spin-Off Valuation Period. To the extent any dividend or distribution of the type described in this Section 5(d)(i)(3)(B) is declared but not made or paid, each of the Strike Price and the number of Underlying Shares of each Warrant will be readjusted to the Strike Price and the number of Underlying Shares, respectively, that would then be in effect had the adjustment thereto been made on the basis of only the dividend or distribution, if any, actually made or paid.
(4) Cash Dividends or Distributions. If any cash dividend or distribution is made to all or substantially all holders of Ordinary Shares, then the Strike Price will be adjusted based on the following formula (with a corresponding adjustment to the number of Underlying Shares of each Warrant pursuant to Section 5(d)(i)(6)):
SP1 = SP0 X P-D
P
where:
SP0 = the Strike Price in effect immediately before the Open of Business on the Ex-Dividend Date for such dividend or distribution;
SP1 = the Strike Price in effect immediately after the Open of Business on such Ex-Dividend Date;
P = the Last Reported Sale Price per Ordinary Share on the Trading Day immediately before such Ex-Dividend Date; and
D = the cash amount distributed per Ordinary Share in such dividend or distribution. provided, however, that, if D is equal to or greater than P, then, in lieu of the foregoing adjustment to the Strike Price (and the corresponding adjustment to the number of Underlying Shares of each Warrant pursuant to Section 5(d)(i)(6)), each Holder will receive, for each Warrant held by such Holder on the Record Date for such dividend or distribution, at the same time and on the same terms as holders of Ordinary Shares, the amount of cash that such Holder would have received in such dividend or distribution if such Holder had owned, on such Record Date, a number of Ordinary Shares equal to the number of Underlying Shares of such Warrant as of such Record Date. To the extent such dividend or distribution is declared but not made or paid, each of the Strike Price and the number of Underlying Shares of each Warrant will be readjusted to the Strike Price and the number of Underlying Shares, respectively, that would then be in effect had the adjustment thereto been made on the basis of only the dividend or distribution, if any, actually made or paid.
(5) Tender Offers or Exchange Offers.
If the Company or any of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for Ordinary Shares (other than solely pursuant to an odd-lot tender offer pursuant to Rule 13e-4(h)(5) under the Exchange Act), and the value (determined as of the Expiration Time by the Company in good faith and in a commercially reasonable manner) of the cash and other consideration paid per Ordinary Share in such tender or exchange offer exceeds the Last Reported Sale Price per Ordinary Share on the Trading Day immediately after the last date (the “Expiration Date”) on which tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended), then the Strike Price will be adjusted based on the following formula (with a corresponding adjustment to the number of Underlying Shares of each Warrant pursuant to Section 5(d)(i)(6)):
SP1 = SP0 X PXOS0
AC+(PXOS1)
where:
SP0 = the Strike Price in effect immediately before the time (the “Expiration Time”) such tender or exchange offer expires;
SP1 = the Strike Price in effect immediately after the Expiration Time;
P = the average of the Last Reported Sale Prices per Ordinary Share over the ten (10) consecutive Trading Day period (the “Tender/Exchange Offer Valuation Period”) beginning on, and including, the Trading Day immediately after the Expiration Date;
OS0 = the number of Ordinary Shares outstanding immediately before the Expiration Time (including all Ordinary Shares accepted for purchase or exchange in such tender or exchange offer);
AC = the aggregate value (determined as of the Expiration Time by the Company in good faith and in a commercially reasonable manner) of all cash and other consideration paid for Ordinary Shares purchased or exchanged in such tender or exchange offer; and
OS1 = the number of Ordinary Shares outstanding immediately after the Expiration Time (excluding all Ordinary Shares accepted for purchase or exchange in such tender or exchange offer);
provided, however, that the Strike Price will in no event be adjusted up pursuant to this Section 5(d)(i)(5), and the number of Underlying Shares of the Warrants will in no event be adjusted down in the corresponding adjustment pursuant to Section 5(d)(i)(6), in each case except to the extent provided in the last paragraph of this Section 5(d)(i)(5).
The adjustment to the Strike Price and the number of Underlying Shares of each Warrant pursuant to this Section 5(d)(i)(5) and Section 5(d)(i)(6), respectively, will be calculated as of the Close of Business on the last Trading Day of the Tender/Exchange Offer Valuation Period but will be given effect immediately after the Expiration Time, with retroactive effect. If any Warrant is Exercised and the Exercise Date for such Exercise occurs on the Tender/Exchange Offer Expiration Date or during the Tender/Exchange Offer Valuation Period, then, notwithstanding anything to the contrary in this Warrant Agreement, the Company will, if necessary, delay the settlement of such Exercise until the second (2nd) Business Day after the last Trading Day of the Tender/Exchange Offer Valuation Period. To the extent such tender or exchange offer is announced but not consummated (including as a result of being precluded from consummating such tender or exchange offer under applicable law), or any purchases or exchanges of Ordinary Shares in such tender or exchange offer are rescinded, each of the Strike Price and the number of Underlying Shares of each Warrant will be readjusted to the Strike Price and the number of Underlying Shares, respectively, that would then be in effect had the adjustment thereto been made on the basis of only the purchases or exchanges of Ordinary Shares, if any, actually made, and not rescinded, in such tender or exchange offer.
(6) Adjustment to the Number of Underlying Shares. If the Strike Price is adjusted pursuant to the formulas set forth in any of clauses (1) through (5) of this Section 5(d)(i) (excluding, for these purposes, a readjustment pursuant to the text following such formulas), then, effective as of the same time at which such adjustment to the Strike Price becomes effective, the number of Underlying Shares of each Warrant will be adjusted to an amount equal to the product of (A) the number of Underlying Shares of such Warrant in effect immediately before such adjustment to such number of Underlying Shares; and (B) the quotient obtained by dividing (x) the Strike Price in effect immediately before such adjustment to the Strike Price; and (y) the Strike Price in effect immediately after such adjustment to the Strike Price; provided, however, that the number of Underlying Shares of each Warrant will be subject to readjustment to the extent set forth in such clauses. For purposes of calculating the adjustment to the number of Underlying Shares of each Warrant pursuant to the preceding sentence, the amount set forth in clause (B)(y) of the preceding sentence will be calculated without giving effect to any rounding pursuant to Section 5(d)(viii).
(ii) No Adjustments in Certain Cases.
(1) Where Holders Participate in the Transaction or Event Without Exercising. Notwithstanding anything to the contrary in Section 5(d)(i), the Company is not required to adjust the Strike Price or the number of Underlying Shares of any Warrant for a transaction or other event otherwise requiring an adjustment pursuant to Section 5(d)(i) (other than a share split or combination of the type set forth in Section 5(d)(i)(1) or a tender or exchange offer of the type set forth in Section 5(d)(i)(5)) if each Holder participates, at the same time and on the same terms as holders of Ordinary Shares, and solely by virtue of being a Holder of the Warrants, in such transaction or event without having to Exercise such Holder’s Warrants and as if such Holder had owned, on the Record Date for such transaction or event, a number of Ordinary Shares equal to the aggregate number of Underlying Shares, as of such Record Date, of the Warrants held by such Holder on such Record Date.
(2) Certain Events. Without limiting the operation of Section 5(g), the Company will not be required to adjust the Strike Price or the number of Underlying Shares of any Warrant except pursuant to Section 5(d)(i). Without limiting the foregoing, the Company will not be required to adjust the Strike Price or the number of Underlying Shares of any Warrant on account of:
(A) except as otherwise provided in Section 5(d)(i), the sale of Ordinary Shares for a purchase price that is less than the market price per Ordinary Share or less than the Strike Price; (B) the issuance of any Ordinary Shares pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in Ordinary Shares under any such plan; (C) the issuance of any Ordinary Shares or options or rights to purchase Ordinary Shares pursuant to any present or future employee, director or consultant benefit plan or program of, or assumed by, the Company or any of its Subsidiaries; (D) the issuance of any Ordinary Shares pursuant to any option, warrant, right or convertible or exchangeable security of the Company outstanding as of the Initial Issue Date; or (E) solely a change in the par value of the Ordinary Shares.
(3) Notwithstanding anything to the contrary in this Warrant Agreement (including Section 5(d)(i)(6) hereof), in no event shall the Company be required to adjust the Strike Price or the number of Underlying Shares of any Warrant on the account of any (x)
repurchase by the Company or any of its Subsidiaries of any Ordinary Shares within the limits set forth in the Board of Directors’ authorizations announced on August 11, 2025 and January 28, 2026 (in the aggregate amount of up to $2 billion) (collectively, the “Existing Share Buyback Authorizations”), regardless of the form in which such repurchase may be conducted, whether through a tender or exchange offer of the type set forth in Section 5(d)(i)(5), an open market repurchase, one or more derivative transactions facilitated by a corporate equity derivatives dealer or otherwise and (y) after the Existing Share Buyback Authorizations are exhausted and/or expire by their terms, upon the repurchase of any Ordinary Shares pursuant to an open-market share repurchase program or other buy-back transaction that is not a tender offer or exchange offer of the type set forth in Section 5(d)(i)(5).
(4) Repurchases Not a “Distribution”. For the avoidance of doubt, the repurchase by the Company or any of its Subsidiaries of Ordinary Shares or any other securities of the Company or its Subsidiaries shall not be deemed a “distribution” for purposes of any adjustments set forth in Section 5(d)(i)(1) through Section 5(d)(i)(4).
(iii) Adjustment Deferral. If an adjustment to the Strike Price and the number of Underlying Shares of the Warrants otherwise required by this Warrant Agreement would result in a change of less than one percent (1%) to the Strike Price, then the Company may, at its election, defer such adjustment to the Strike Price and the number of Underlying Shares of all outstanding Warrants, except that all such deferred adjustments must be given effect immediately with respect to all outstanding Warrants upon the earliest of the following: (1) when all such deferred adjustments would result in a change of at least one percent (1%) to the Strike Price; (2) the Exercise Date of any Warrant; and (3) the date a Make-Whole Fundamental Change occurs.
(iv) Adjustments Not Yet Effective. Notwithstanding anything to the contrary in this Warrant Agreement, if:
(1) a Warrant is Exercised;
(2) the Record Date, effective date or Expiration Time for any event that requires an adjustment to the Strike Price pursuant to Section 5(d)(i) has occurred on or before the Exercise Date for such Exercise, but an adjustment to the Strike Price or the number of Underlying Shares of the Warrants for such event has not yet become effective as of such Exercise Date;
(3) the Exercise Consideration due upon such Exercise includes any whole or fractional Ordinary Shares; and
(4) such shares are not entitled to participate in such event (because they were not held on the related Record Date or otherwise),
then, solely for purposes of such Exercise, the Company will, without duplication, give effect to such adjustment on such Exercise Date. In such case, if the date on which the Company is otherwise required to deliver the Exercise Consideration due upon such Exercise is before the first date on which the amount of such adjustment can be determined, then the Company will delay the settlement of such Exercise until the second (2nd) Business Day after such first date.
(v) Adjustments Where Exercising Holders Participate in the Relevant Transaction or Event. Notwithstanding anything to the contrary in this Warrant Agreement, if:
(1) an adjustment to the Strike Price or the number of Underlying Shares of the Warrants for any dividend or distribution becomes effective on any Ex-Dividend Date pursuant to Section 5(d)(i); (2) a Warrant is Exercised;
(3) the Exercise Date for such Exercise occurs on or after such Ex-Dividend Date and on or before the related Record Date; (4) the Exercise Consideration due upon such Exercise includes any whole or fractional Ordinary Shares based on a Strike Price or number of Underlying Shares that is adjusted for such dividend or distribution; and
(5) such shares would be entitled to participate in such dividend or distribution (including pursuant to Section 5(b)(ii)),
then such adjustment will not be given effect for such Exercise and the Ordinary Shares issuable upon such Exercise based on such unadjusted Strike Price and unadjusted number of Underlying Shares will not be entitled to participate in such dividend or distribution, but there will be added, to the Exercise Consideration otherwise due upon such Exercise, the same kind and amount of consideration that would have been delivered in such dividend or distribution with respect to such Ordinary Shares had such shares been entitled to participate in such dividend or distribution.
(vi) Shareholder Rights Plans. If any Ordinary Shares are to be issued upon Exercise of any Warrant and, at the time of such Exercise, the Company has in effect any shareholder rights plan, then the Holder of such Warrant will be entitled to receive, in addition to, and concurrently with the delivery of, the consideration otherwise due upon such Exercise, the rights set forth in such shareholder rights plan, unless such rights have separated from the Ordinary Shares at such time, in which case, and only in such case, the Strike Price and the number of Underlying Shares of each Warrant will be adjusted pursuant to Section 5(d)(i)(3)(A) on account of such separation as if, at the time of such separation, the Company had made a distribution of the type referred to in such Section 5(d)(i)(3)(A) to all holders of Ordinary Shares, subject to potential readjustment in accordance with the last paragraph of Section 5(d)(i)(3)(A).
(vii) Determination of the Number of Outstanding Ordinary Shares. For purposes of Section 5(d)(i), the number of Ordinary Shares outstanding at any time will (1) include shares issuable in respect of scrip certificates issued in lieu of fractions of Ordinary Shares; and (2) exclude Ordinary Shares held in the Company’s treasury (unless the Company pays any dividend or makes any distribution on Ordinary Shares held in its treasury).
(viii) Rounding of Calculations. All calculations with respect to the Strike Price and adjustments thereto will be made to the nearest cent (with half of one cent rounded upwards), and all calculations with respect to the number of Underlying Shares of any Warrant and adjustments thereto will be made to the nearest 1/10,000th of an Ordinary Share (with 5/100,000ths rounded upward).
(ix) Notice of Strike Price and Number of Underlying Shares Adjustments. Upon the effectiveness of any adjustment to the Strike Price or the number of Underlying Shares of the Warrants pursuant to Section 5(d)(i), the Company will, as soon as reasonably practicable and no later than ten (10) Business Days after the date of such effectiveness, send notice to the Holders (with a copy to the Exercise Agent) containing (1) a brief description of the transaction or other event on account of which such adjustment was made; (2) the Strike Price in effect immediately after such adjustment; (3) a brief description of any corresponding adjustment to the number of Underlying Shares of each Warrant; and (4) the effective time of such adjustment.
(e) Voluntary Adjustments.
(i) Generally. To the extent permitted by law and applicable stock exchange rules, the Company, from time to time, may (but is not required to) decrease the Strike Price by any amount, or increase the number of Underlying Shares of each outstanding Warrant by any amount, if (1) the Board of Directors determines that such decrease or increase, as applicable, is in the Company’s best interest or that such decrease or increase, as applicable, is advisable to avoid or diminish any income tax imposed on holders of Ordinary Shares or rights to purchase Ordinary Shares as a result of any dividend or distribution of shares (or rights to acquire shares)
of Ordinary Shares or any similar event; (2) such decrease or increase, as applicable, is in effect for a period of at least twenty (20) Business Days; and (3) such decrease or increase, as applicable, is irrevocable during such period.
(ii) Notice of Voluntary Adjustment. If the Board of Directors determines to decrease the Strike Price or increase the number of Underlying Shares of the Warrants pursuant to Section 5(e)(i), then, no later than the first Business Day of the related twenty (20) Business Day period referred to in Section 5(e)(i), the Company will send notice to each Holder (with a copy to the Exercise Agent) of such decrease or increase, as applicable, quantifying the amount thereof and stating the period during which such decrease or increase, as applicable, will be in effect.
(f) Adjustments Effective Without Need to Amend Certificates . An adjustment to the number of Underlying Shares of any Warrant pursuant to Section 5(d) or 5(e) will be effective without the need to notate the same on, or otherwise amend, the Certificate representing such Warrant.
(g) Delivery of Additional Exercise Shares for Warrants Exercised in Connection with a Make-Whole Fundamental Change.
(i) Generally. If a Make-Whole Fundamental Change occurs and the Exercise Date for the Exercise of any Warrant occurs during the related Make-Whole Fundamental Change Exercise Period, then, subject to the proviso in the final paragraph of Section 5(c)(ii), Section 5(h) and this Section 5(g), there will be added (pursuant to, and without duplication of, Section 5(h)(i) or the final paragraph of Section 5(c)(ii), as applicable) to the Exercise Consideration otherwise due upon such Exercise, an additional number of Ordinary Shares equal to the product of (x) the number of Underlying Shares of such Warrant that are being so Exercised; and (y) the number of Ordinary Shares (such number of shares referred to in this clause (y), the “Make-Whole Fundamental Change Shares”) set forth in the table below corresponding (after interpolation as provided in, and subject to, the provisions below) to the Make-Whole Fundamental Change Effective Date and the Make-Whole Fundamental Change Share Price of such Make-Whole Fundamental Change:
Make-Whole Fundamental Change Share Price:
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| Make-Whole Fundamental Change Share Price |
| Effective Date |
$25.00 |
$50.00 |
$75.00 |
$100.00 |
$125.00 |
$150.00 |
$175.00 |
$200.00 |
$225.00 |
$250.00 |
$275.00 |
$300.00 |
$325.00 |
$350.00 |
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March 5, 2026................. |
0.0000 |
0.1210 |
0.2289 |
0.3255 |
0.2446 |
0.1720 |
0.1278 |
0.0992 |
0.0798 |
0.0661 |
0.0561 |
0.0486 |
0.0428 |
0.0382 |
September 5, 2026........... |
0.0000 |
0.0932 |
0.1962 |
0.2944 |
0.2171 |
0.1486 |
0.1079 |
0.0823 |
0.0654 |
0.0537 |
0.0454 |
0.0392 |
0.0345 |
0.0309 |
March 5, 2027................. |
0.0000 |
0.0654 |
0.1607 |
0.2598 |
0.1867 |
0.1229 |
0.0866 |
0.0646 |
0.0505 |
0.0412 |
0.0347 |
0.0300 |
0.0264 |
0.0237 |
September 5, 2027........... |
0.0000 |
0.0389 |
0.1217 |
0.2205 |
0.1523 |
0.0946 |
0.0637 |
0.0461 |
0.0355 |
0.0288 |
0.0243 |
0.0211 |
0.0188 |
0.0170 |
March 5, 2028................. |
0.0000 |
0.0160 |
0.0786 |
0.1740 |
0.1122 |
0.0629 |
0.0395 |
0.0276 |
0.0211 |
0.0173 |
0.0149 |
0.0132 |
0.0119 |
0.0109 |
September 5, 2028........... |
0.0000 |
0.0018 |
0.0313 |
0.1145 |
0.0625 |
0.0277 |
0.0156 |
0.0110 |
0.0089 |
0.0077 |
0.0069 |
0.0063 |
0.0058 |
0.0054 |
March 5, 2029................. |
0.0000 |
0.0000 |
0.0000 |
0.0000 |
0.0000 |
0.0000 |
0.0000 |
0.0000 |
0.0000 |
0.0000 |
0.0000 |
0.0000 |
0.0000 |
0.0000 |
If such Make-Whole Fundamental Change Effective Date or Make-Whole Fundamental Change Share Price is not set forth in the table above, then:
(1) if such Make-Whole Fundamental Change Share Price is between two Make-Whole Fundamental Change Share Prices in the table above or the Make-Whole Fundamental Change Effective Date is between two dates in the table above, then the number of Make-Whole Fundamental Change Shares will be determined by straight-line interpolation between the numbers of Make-Whole Fundamental Change Shares set forth for the higher and lower Make-Whole Fundamental Change Share Prices in the table above or the earlier and later dates in the table above, based on a 365- or 366-day year, as applicable; and
(2) if the Make-Whole Fundamental Change Share Price is greater than $350.00 (subject to adjustment in the same manner as the Make-Whole Fundamental Change Share Prices set forth in the column headings of the table above are adjusted pursuant to Section 5(g)(ii)), or less than $25.00 (subject to adjustment in the same manner), per share, then no Make-Whole Fundamental Change Shares will be added to the Exercise Consideration.
Notwithstanding anything to the contrary in this Warrant Agreement, in no event will the number of Make-Whole Fundamental Change Shares per Underlying Share exceed 0.3255 Ordinary Shares.
(ii) Adjustment of Make-Whole Fundamental Change Share Prices. Each Make-Whole Fundamental Change Share Price in the first row (i.e., the column headers) of the table set forth in Section 5(g)(i) will be adjusted in the same manner as, and at the same time and for the same events for which, the Strike Price is adjusted pursuant to Section 5(d)(i).
(ii) Notice of the Occurrence of a Make-Whole Fundamental Change. If a Make-Whole Fundamental Change occurs, then, promptly and in no event later than five (5) Business Days immediately after the Make-Whole Fundamental Change Effective Date of such Make-Whole Fundamental Change, the Company will notify the Holders (with a copy to the Exercise Agent, if not the Company) of the occurrence of such Make-Whole Fundamental Change and of such Make-Whole Fundamental Change Effective Date, briefly stating the circumstances under which Make-Whole Fundamental Change Shares will be included in the Exercise Consideration due upon the Exercise of Warrants pursuant to this Section 5(g) in connection with such Make-Whole Fundamental Change.
(iii) Strike Price and Number of Underlying Shares of the Warrants Unaffected by the Delivery of Make-Whole Fundamental Change Shares. For the avoidance of doubt, neither the Strike Price nor the number of Underlying Shares applicable to the Exercise of any Warrant will be adjusted on account of the inclusion of any Make-Whole Fundamental Change Shares in the Exercise Consideration for such Exercise pursuant to this Section 5(g).
(h) Effect of Ordinary Shares Change Event .
(i) Generally. If there occurs any:
(1) any recapitalization, reclassification or change of the Ordinary Shares (other than changes in par value or changes resulting from a subdivision or combination),
(2) any consolidation, merger or combination involving the Company,
(3) any sale, lease or other transfer to a third party of the consolidated assets of the Company and the Company’s Subsidiaries substantially as an entirety;
(4) any statutory scheme of arrangement; or
(5) any statutory share exchange,
and, as a result of which, the Ordinary Shares are converted into, or is exchanged for, or represents solely the right to receive, stock, other securities, other property or assets, including cash or any combination thereof (such an event, an “Ordinary Shares Change Event,” and such other securities, cash or property, the “Reference Property,” and the amount and kind of Reference Property that a holder of one (1) Ordinary Share would be entitled to receive on account of such Ordinary Shares Change Event (without giving effect to any arrangement not to issue or deliver a fractional portion of any security or other property), a “Reference Property Unit”), then, notwithstanding anything to the contrary in this Warrant Agreement,
(A) from and after the effective time of such Ordinary Shares Change Event, (I) the consideration due upon Exercise of any Warrant will be determined in the same manner as if each reference to any number of Ordinary Shares in this Section 5 or in Section 6, or in any related definitions, were instead a reference to the same number of Reference Property Units; and (II) for purposes of the definition of “Make-Whole Fundamental Change,” the terms “Ordinary Shares” and “common equity” will be deemed to mean the common equity (including depositary receipts representing common equity), if any, forming part of such Reference Property;
(B) if such Reference Property Unit consists entirely of cash, then the Company will settle each Exercise of any Warrant whose Exercise Date occurs on or after the date of the effective time of such Ordinary Shares Change Event by paying, on or before the tenth (10th) Business Day immediately after such Exercise Date, cash in an amount equal to the following:
NX(NV+MW)
where:
N = the number of Underlying Shares of such Warrant that are being so Exercised; NV = the excess, if any, of (x) the amount of cash included in such Reference Property Unit over (y) the Strike Price (it being understood, for the avoidance of doubt, that NV will be zero if the amount set forth in clause (x) is not greater than the amount set forth in clause (y)); MW = the product of (x) the amount of cash included in such Reference Property Unit; and (y) the number of Make-Whole Fundamental Change Shares, if any, applicable to such Exercise pursuant to Section 5(g).
If the Reference Property consists of more than a single type of consideration to be determined based in part upon any form of shareholder election, then the composition of the Reference Property Unit will be deemed to be the weighted average of the types and amounts of consideration actually received, per Ordinary Share, by the holders of Ordinary Shares. The Company will notify the Holders of such weighted average as soon as practicable after such determination is made.
(ii) Compliance Covenant. The Company will not become a party to any Ordinary Shares Change Event unless its terms are consistent with this Section 5(h).
(iii) Execution of Supplemental Instruments. On or before the date the Ordinary Shares Change Event becomes effective, the Company and, if applicable, the resulting, surviving or transferee Person (if not the Company) of such Ordinary Shares Change Event (the “Successor Person”) will execute and deliver such supplemental instruments, if any, as the Company reasonably determines are necessary or desirable (which supplemental instruments will, for the avoidance of doubt, not require the consent of any Holder) to (y) provide for subsequent adjustments to the Strike Price and the number of Underlying Shares of the Warrants pursuant to Section 5(d)(i) in a manner consistent with this Section 5(h); and (z) contain such other provisions, if any, as the Company reasonably determines are appropriate to preserve the economic interests of the Holders and to give effect to Section 5(h)(i). If the Successor Person is not the Company, or the Reference Property includes shares of stock or other securities or assets (other than cash) of a Person other than the Successor Person, then the Company will cause such Successor Person or Person, as applicable, to execute and deliver a joinder to this Warrant Agreement assuming the obligations of the Company under this Warrant Agreement, or the obligation to deliver such Reference Property upon Exercise of the Warrants, as applicable.
(iv) Notice of Ordinary Shares Change Event. The Company will provide notice of each Ordinary Shares Change Event to Holders no later than the fifth (5th) Business Day after the effective date of the Ordinary Shares Change Event.
Restriction on Exercises.
(i) Limitation on Exercise Right
(A) Notwithstanding anything to the contrary contained herein, the Company shall not effect, and the Holder shall not be permitted to effect, any exercise of a Warrant to the extent that, after giving effect to such exercise, the Holder, together with the Attribution Parties, would beneficially own in excess of 4.90% (the “Maximum Percentage”) of the Ordinary Shares outstanding immediately after such exercise (the restrictions set forth in this sentence, the “Section 13 Ownership Limitation”). Any purported exercise in violation of this limitation shall be null and voidable. Beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules promulgated thereunder, except that for purposes of calculating whether the Maximum Percentage would be exceeded, such calculation shall include Ordinary Shares issuable upon the Exercise being effected but shall exclude Ordinary Shares issuable upon (i) Exercise of any remaining, unexercised portion of such Warrant and (ii) exercise or conversion of any other securities of the Company beneficially owned by the Holder or any Attribution Party that are subject to analogous ownership limitations.
In determining the number of outstanding Ordinary Shares, a Holder may rely on (1) the Company's most recent Annual Report on Form 20-F, Report on Form 6-K or other public filing with the Securities and Exchange Commission, (2) a more recent public announcement by the Company, or (3) any other written notice by the Company or its transfer agent (such outstanding shares, the “Reported Outstanding Share Number”). Upon written or oral request, the Company shall confirm to the Holder the number of outstanding Ordinary Shares within one Trading Day. The Holder shall disclose to the Company, contemporaneously with or immediately prior to submitting an Exercise Notice, its beneficial ownership and the ownership of the Attribution Parties (including shares acquirable through derivative securities subject to analogous limitations).
If the actual number of outstanding Ordinary Shares is less than the Reported Outstanding Share Number and the exercise would cause beneficial ownership to exceed the Maximum Percentage, the Company shall promptly notify the Holder, and the Holder shall notify the Company of a reduced number of Exercise Shares to be purchased (the shares by which such purchase is reduced, the “Reduction Shares”). The portion of such Warrant attributable to the Reduction Shares shall be deemed not Exercised and shall remain outstanding and Exercisable. For all purposes hereunder, the number of outstanding Ordinary Shares shall be determined after giving effect to any conversion or exercise of securities by the Holder and the Attribution Parties since the date of the Reported Outstanding Share Number.
If, notwithstanding the foregoing, the issuance of Ordinary Shares upon Exercise results in the Holder, together with the Attribution Parties, beneficially owning more than the Maximum Percentage, such excess shares (the “Excess Shares”) shall be deemed null and voidable, shall be cancelled, and the Holder shall have no power to vote or transfer the Excess Shares. The Company shall restore the portion of such Warrant attributable to the Excess Shares, which portion shall remain outstanding and exercisable in accordance with the terms hereof. By written notice to the Company, the Holder may increase or decrease the Maximum Percentage to any percentage not exceeding the Applicable Law Limitation; provided that any increase shall not be effective until the 61st day after delivery of such notice and shall not affect any exercise effected prior to such change.
(B) Applicable Law Limitation. Notwithstanding anything to the contrary in this Warrant Agreement, no Ordinary Shares will be issued or delivered upon Exercise of any Warrant of any Holder, and no Warrant of any Holder will be Exercisable, in each case to the extent, and only to the extent, that such issuance, delivery, Exercise or exercisability would result in such Holder, or a “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) that includes such Holder, beneficially owning in excess of 24.99% of the then-outstanding Ordinary Shares (the “Applicable Law Limitation” and any of the Section 13 Ownership Limitation or the Applicable Law Limitation, an “Ownership Limitation”).
The satisfaction, by a Holder of any Warrant, of the requirements set forth in Section 5(b)(i) to Exercise such Warrant will be deemed to be a representation, by such Holder to the Company, that the settlement of such Exercise in full and without regard to this Section 5(i)(i) will not contravene any Ownership Limitation. If any Exercise Consideration otherwise due upon the Exercise of any Warrant is not delivered as a result of any Ownership Limitation, then the Company’s obligation to deliver such Exercise Consideration will not be extinguished, and the Company will deliver such Exercise Consideration as soon as reasonably practicable after the Holder of such Warrant provides written confirmation to the Company that such delivery will not contravene any Ownership Limitation. Any purported delivery of Ordinary Shares upon Exercise of any Warrant will be void and have no effect to the extent, and only to the extent, that such delivery would contravene any Ownership Limitation.
(ii) Limitation on Exercise . Notwithstanding anything to the contrary in this Warrant Agreement, a Holder shall not be entitled to exercise any Warrant for a number of Underlying Shares in excess of that number of Underlying Shares which, upon giving effect to such exercise, would result in any required filing under the Hart-Scott-Rodino Antitrust Improvements Act (the “HSR Act”) if one has not been made or the requisite waiting period has not expired or been terminated. If a filing and clearance under the HSR Act would be required in connection with the exercise of any Warrant, the Holder and the Company shall make such filings promptly and to seek early termination, and only exercise such Warrants after the applicable waiting periods have expired or early termination has been obtained.
6. Certain Provisions Relating to the Issuance of Ordinary Shares.
(a) Equitable Adjustments to Prices . Whenever this Warrant Agreement requires the Company to calculate the average of the Last Reported Sale Prices, or any function thereof, over a period of multiple days (including to calculate the Make-Whole Fundamental Change Share Price or an adjustment to the Strike Price), the Company will make appropriate adjustments, if any, to those calculations to account for any adjustment to the Strike Price pursuant to Section 5(d)(i) that becomes effective, or any event requiring such an adjustment to the Strike Price where the Ex-Dividend Date, effective date or Expiration Date, as applicable, of such event occurs, at any time during such period.
(b) Reservation of Ordinary Shares . At all times when any Warrant is outstanding, the Company will reserve (out of its authorized and not outstanding Ordinary Shares that are not reserved for other purposes), for delivery upon Exercise of the Warrants, a number of Ordinary Shares that would be sufficient to settle the Exercise of all Warrant(s) then outstanding (assuming, for these purposes, that each such Warrant is settled by the delivery of a number of Ordinary Shares equal to the sum of (i) the number of Underlying Shares of such Warrant and (ii) the product of (x) the number of Underlying Shares of such Warrant; and (y) the maximum number of Make-Whole Fundamental Change Shares as of such time). To the extent the Company delivers Ordinary Shares held in the Company’s treasury in settlement of any obligation under this Warrant Agreement to deliver Ordinary Shares, each reference in this Warrant Agreement to the issuance of Ordinary Shares in connection therewith will be deemed to include such delivery.
(c)Status of Ordinary Shares; Covenant Regarding Par Value . Each Ordinary Share delivered upon Exercise of any Warrant of any Holder will be a newly issued or treasury share and will be duly authorized, validly issued, fully paid, non-assessable, free from preemptive rights and free of any lien or adverse claim (except to the extent of any lien or adverse claim created by the action or inaction of such Holder or the Person to whom such Ordinary Share will be delivered). If the Ordinary Shares are then listed on any securities exchange, or quoted on any inter-dealer quotation system, then the Company will use commercially reasonable efforts to cause each such Ordinary Share, when so delivered, to be admitted for listing on such exchange or quotation on such system. The Company will not engage in any transaction or take any action that would cause the Strike Price to be less than the par value per Ordinary Share.
(d) Taxes Upon Issuance of Ordinary Shares . The Company will pay any documentary, stamp or similar issue or transfer tax or duty due on the issue of any Ordinary Shares upon Exercise of any Warrant of any Holder, except any tax or duty that is due because such Holder requests those shares to be registered in a name other than such Holder’s name.
(e) Registration Rights . The Company acknowledges and agrees that the Exercise Shares constitute “Registrable Securities” under and subject to the terms of the Securities Purchase Agreement, dated as of March 4, 2026, by and among the Company and the Purchasers party thereto (as amended, supplemented or modified from time to time, the “Securities Purchase Agreement”). Nothing in this Warrant Agreement shall limit or modify any Holder's rights under the Securities Purchase Agreement
7. Calculations.
(a) Responsibility; Schedule of Calculations . Except as otherwise provided in this Warrant Agreement, the Company will be responsible for making all calculations called for under this Warrant Agreement or the Warrants, including determinations of the Strike Price and the Last Reported Sale Prices. The Company will make all calculations in good faith. In the case of a dispute as to the determination of the Strike Price or the arithmetic calculation of the number of Exercise Shares to be issued pursuant to the terms hereof or the Underlying Shares, the Company shall promptly issue to the Holder the number of Exercise Shares that are not disputed and resolve such dispute in accordance with Section 7(c). The Company will provide a schedule of such calculations to any Holder upon written request. For the avoidance of doubt, the Placement Agent shall have no responsibility or liability for any such calculations or determinations.
(b) Calculations Aggregated for Each Holder . The composition of the Exercise Consideration due upon Exercise of any Warrant of any Holder will be computed based on the total number of Warrants of such Holder being Exercised with the same Exercise Date. Any cash amounts due to such Holder in respect thereof will, after giving effect to the preceding sentence, be rounded to the nearest cent.
(c)Dispute Resolution . In the case of a dispute as to the determination of the Strike Price or the arithmetic calculation of the Exercise Shares that is notified by a Holder to the Company in writing prior to the scheduled settlement date for of any Exercise of a Warrant by such Holder (which notice shall be accompanied by the Holder’s commercially reasonable proposed calculations for the disputed amount(s)), the Company shall submit an explanation, with a commercially reasonable level of detail, for its determinations or arithmetic calculations via facsimile or electronic mail within two (2) Business Days of receipt of such notice of dispute to the Holder.
If the Holder and the Company are unable to agree upon such determination or calculation of the Strike Price or the Exercise Shares, as applicable, within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within five (5) Business Days submit via facsimile or electronic mail (a) the disputed determination to a reputable investment bank selected by the Company and approved by the Holder, which approval shall not be unreasonably withheld, conditioned or delayed (enclosing the proposed calculations of both parties and the back-up calculations, in each case, that have been exchanged between the parties in the dispute resolution process) or the Company’s independent, outside accountant. The Company shall request the investment bank or the accountant, as the case may be, to perform the determinations or calculations solely based on the submitted information and notify the Company and the Holder of the results no later than ten (10) Business Days from the engagement. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent manifest error. The expenses of such engagement of the investment bank or the accountant, as applicable, shall be borne equally by the Company and the Holder. Both the Company and the Holder shall keep, and shall request that such investment bank or accountant keep, the dispute resolution process confidential, and shall not disclose the nature of the dispute to any third parties besides those contemplated in this Section 7(c) and outside counsel. Notwithstanding the foregoing, in no event may a Holder dispute any inputs to the Strike Price adjustment calculations set forth in Section 5(d), when such inputs are expressly designated for determination by the Company or its Board of Directors in Section 5(d). No Holder may use such right to dispute more than once in one calendar year (on a rolling basis), and to the extent that any other Holder has initiated a dispute in respect of a substantially similar matter (as notified by the Company to a Holder after receipt of a Holder’s notice of dispute pursuant to this Section 7(c), the resolution in such other dispute shall also be binding (absent a manifest error) for any other Holder who notifies the Company of a dispute of a substantially similar matter. The Company shall issue to the Holder the number of the Exercise Shares that is not disputed pursuant to Section 5(d), and the Company shall not be deemed in breach of its obligations to deliver the disputed number of the Exercise Shares (if any) upon an Exercise pursuant to in Section 5(d) pending resolution of a dispute initiated by a Holder in respect of such Exercise, and the deadline in Section 5(d) for delivery of such Exercise Shares (if any) in excess of any Exercise Shares that are not disputed shall be extended until the second (2nd) Business Day after the Business Day on which the dispute is resolved pursuant to this Section 7(c).
8. Miscellaneous.
(a) Notices . (i) Notices to Holders. All notices or communications required to be made to a Holder pursuant to this Warrant Agreement must be made in writing and will be deemed to be duly sent or given in writing if (1) mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery, to its address shown on the Register; or (2) transmitted by electronic transmission or other similar means of unsecured electronic communication to the electronic address of such Holder shown on the Register, provided receipt of such electronic transmission or communication is acknowledged. The failure to send a notice or communication to a Holder, or any defect in such notice or communication, will not affect its sufficiency with respect to any other Holder.
(ii) Notice Effectiveness. If a notice or communication is mailed or sent in the manner provided above in this Section 8(a) within the time prescribed, it will be deemed to have been duly given, whether or not the addressee receives it (except to the extent, but only to the extent, acknowledgement of receipt is expressly required by this Section 8(a)).
(b) Governing Law; Waiver of Jury Trial . THIS WARRANT AGREEMENT AND THE WARRANTS, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS WARRANT AGREEMENT OR THE WARRANTS, WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THE COMPANY AND EACH HOLDER (BY ITS ACCEPTANCE OF ANY WARRANT) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT AGREEMENT, THE WARRANTS OR THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT AGREEMENT OR THE WARRANTS.
(c)Submission to Jurisdiction . Any legal suit, action or proceeding arising out of or based upon this Warrant Agreement or the transactions contemplated by this Warrant Agreement may be instituted in the federal courts of the United States of America located in the City of New York or the courts of the State of New York, in each case located in the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail (to the extent allowed under any applicable statute or rule of court) to such party’s address set forth in Section 8(a) will be effective service of process for any such suit, action or proceeding brought in any such court. Each of the Company and each Holder (by its execution and delivery of this Warrant Agreement or by its acceptance of any Warrant) irrevocably and unconditionally waives any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waives and agrees not to plead or claim any such suit, action or other proceeding has been brought in an inconvenient forum.
(d) No Adverse Interpretation of Other Agreements . Neither this Warrant Agreement nor the Warrants may be used to interpret any other agreement of the Company or its Subsidiaries or of any other Person, and no such other agreement may be used to interpret this Warrant Agreement or the Warrants.
(e) Successors; Benefits of Warrant Agreement . All agreements of the Company in this Warrant Agreement and the Warrants will bind its successors. Subject to the preceding sentence, this Warrant Agreement is for the sole benefit of the parties hereto and for the Holders, as such, from time to time, and nothing in this Warrant Agreement, or anything that may be implied from any provision of this Warrant Agreement, will confer on any other Person any right, claim or remedy.
(f) Severability . If any provision of this Warrant Agreement or the Warrants is invalid, illegal or unenforceable, then the validity, legality and enforceability of the remaining provisions of this Warrant Agreement or the Warrants will not in any way be affected or impaired thereby.
(g) Counterparts . The parties may sign any number of copies of this Warrant Agreement. Each signed copy will be an original, and all of them together represent the same agreement. Delivery of an executed counterpart of this Warrant Agreement electronically in portable document format or in any other format will be effective as delivery of a manually executed counterpart.
(h) Table of Contents, Headings, Etc. The table of contents and the headings of the Sections and sub-Sections of this Warrant Agreement have been inserted for convenience of reference only, are not to be considered a part of this Warrant Agreement and will in no way modify or restrict any of the terms or provisions of this Warrant Agreement.
(i) Withholding Taxes .
Each initial Holder of a Warrant agrees, and each Holder of a Warrant or a beneficial interest therein by its acquisition of such Warrant or beneficial interest therein, is deemed to agree, that (i) the Company and any applicable withholding agent has the right to withhold any amounts for or on account of Tax required to be withheld under applicable law payable to a Holder and to remit such withheld amounts to the applicable governmental authority in accordance with applicable law and no payment by the Company or any applicable withholding agent shall be required to be increased or otherwise “grossed up” by reason of any such withholding; (ii) if the Company or other applicable withholding agent pays withholding taxes or backup withholding on behalf of such Holder (including as a result of an adjustment or the non-occurrence of an adjustment to the Strike Price or the number of Underlying Shares of the Warrants), then the Company or such withholding agent, as applicable, may, at its option, set off such payments against payments of cash or the delivery of other Exercise Consideration on such Warrant, any payments on the Ordinary Shares or sales proceeds received by, or other funds or assets of, such Holder; and (iii) it will furnish a correct, complete and duly executed certificate, form or document, including a valid IRS Form W-9 or appropriate IRS Form W-8 (or, in each case, any successor form), and/or any certificate or form required under Israeli law that is in force on the payment date, relating to Tax withholding (including any certificate issued by the Israeli Tax Authority) in form and substance reasonably satisfactory to Company, and any other form, document or certificate that may be reasonably requested by the Company or any applicable withholding agent in order to permit the Company to make a payment under this Warrant Agreement without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate, with any such form, document or certificate to be correct, complete and duly executed and will correct or update any such form, document or certificate promptly upon learning that any such form, document or certificate previously provided by it has become obsolete or incorrect. To the extent that any such deduction or withholding for Tax is made from any amounts payable pursuant to this Warrant Agreement, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.
(j) Service of Process . The Company irrevocably appoints its Subsidiary, Wix.com, Inc., a Delaware corporation, as its agent to receive service of process or other legal summons for purposes of any legal suit, action or proceeding arising out of or based upon this Warrant Agreement that may be instituted in any state or federal court in the City and County of New York. (K) No Other Rights . The Warrants will confer no rights to the Holders thereof except as provided in this Warrant Agreement. For the avoidance of doubt, and without limiting the operation of Sections 5(d)(ii)(1) and 5(b)(ii), and the provisos to Sections 5(d)(i)(3)(A) and 5(d)(i)(4), the Warrants will not confer to the Holders thereof any rights as shareholders of the Company.
(l) No Obligation to Purchase Securities of the Company . For the avoidance of doubt, except to the extent any Exercise Shares (or other Exercise Consideration consisting of any securities of the Company) is deliverable in connection with the due Exercise of any Warrant, nothing in this Warrant Agreement will impose on any Holder any obligation to purchase any securities of the Company.
(m) Placement Agent . The Company acknowledges that the Placement Agent has not acted as underwriter, broker, dealer, fiduciary, financial advisor or in any other capacity under this Warrant Agreement. The Company further acknowledges and agrees that the Placement Agent shall have no liability or obligation arising under this Warrant Agreement or the Warrants, whether in contract, tort or otherwise, and no Holder shall have any claim against the Placement Agent arising out of or relating to this Warrant Agreement or the Warrants.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
IN WITNESS WHEREOF, the parties to this Warrant Agreement have caused this Warrant Agreement to be duly executed as of the date first written above.
WIX.COM LTD.
By:
Name:
Title:
[initial holder #1 legal name]
By:
Name:
Title:
Contact Information:
Address:
Attention:
Email Address:
[initial holder #2 legal name]
By:
Name:
Title:
Contact Information:
Address:
Attention:
Email Address:
EXHIBIT A
FORM OF WARRANT
[Insert Restricted Security Legend, if applicable]
WIX.COM LTD.
Warrants
Certificate No. [___]
Wix.com Ltd., an Israeli company (the “Company”), certifies that [___] is the registered owner of [__] Warrants represented by this certificate (this “Certificate”). The initial number of Underlying Shares of the Warrants represented by this Certificate is [__] Ordinary Shares, which number is subject to adjustment as provided in the Warrant Agreement referred to below.
The terms of the Warrants are set forth in the Warrant Agreement, dated as of March 5, 2026, between the Company and the initial Holders (the “Warrant Agreement”). Capitalized terms used in this Certificate without definition have the respective meanings ascribed to them in the Warrant Agreement.
Additional terms of this Certificate are set forth on the other side of this Certificate.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
IN WITNESS WHEREOF, Wix.com Ltd. has caused this instrument to be duly executed as of the date set forth below.
WIX.COM LTD.
Date: By:
Name:
Title:
WIX.COM LTD.
Warrant
This Certificate represents one or more duly issued and outstanding Warrants having an initial number of Underlying Shares as set forth on the face of this Certificate. Certain terms of the Warrants are summarized below. Notwithstanding anything to the contrary in this Certificate, to the extent that any provision of this Certificate conflicts with the provisions of the Warrant Agreement, the provisions of the Warrant Agreement will control.
1.Method of Payment. Cash amounts due on the Warrants represented by this Certificate will be paid in the manner set forth in Section 3(d) of the Warrant Agreement.
1.Persons Deemed Owners. The Person in whose name this Certificate is registered will be treated as the owner of the Warrants represented by this Certificate for all purposes, subject to Section 3(j) of the Warrant Agreement.
1.Transfers and Exchanges. All Warrants will be in registered form. Subject to the terms of the Warrant Agreement, the Holder of the Warrants represented by this Certificate may transfer or exchange such Warrants by presenting this Certificate to the Registrar and delivering any required documentation or other materials.
1.No Right of Redemption by the Company. The Company will not have the right to redeem the Warrants at its election.
1.Exercise Rights. The Warrants will be Exercisable for Exercise Consideration in the manner, and subject to the terms, set forth in Section 5 of the Warrant Agreement.
1.Abbreviations. Customary abbreviations may be used in the name of a Holder or its assignee, such as TEN COM (tenants in common), TEN ENT (tenants by the entireties), JT TEN (joint tenants with right of survivorship and not as tenants in common), CUST (custodian), and U/G/M/A (Uniform Gift to Minors Act).
* * *
To request a copy of the Warrant Agreement, which the Company will provide to any Holder at no charge, please send a written request to the following address:
Wix.com Ltd.
5 Yunitsman Street
Tel Aviv 6936025, Israel
Attention: Chief Financial Officer
EXERCISE NOTICE
WIX.COM LTD.
Subject to the terms of the Warrant Agreement, by executing and delivering this Exercise Notice, the undersigned Holder of the Warrants identified below directs the Company to Exercise (check one):
all of the Underlying Shares of the Warrants
[*] Underlying Shares of the Warrants
identified by Certificate No. .
(Optional) Identify account within the United States to which any cash Exercise Consideration will be wired:
Bank Routing Number:
SWIFT Code:
Bank Address:
Account Number:
Account Name:
Date:
(Legal Name of Holder)
By:
Name:
Title:
ASSIGNMENT FORM
WIX.COM LTD.
Subject to the terms of the Warrant Agreement, the undersigned Holder of the Warrant identified below assigns (check one):
all of the Underlying Shares of the Warrants
[†] Underlying Shares of the Warrants
identified by Certificate No. , and all rights thereunder, to:
Name:
Address:
Social security or
tax identification
number:
and irrevocably appoints:
as agent to transfer the within Warrant on the books of the Company. The agent may substitute another to act for him/her.
Date:
(Legal Name of Holder)
By:
Name:
Title:
EXHIBIT B
FORM OF RESTRICTED SECURITY LEGEND
THE OFFER AND SALE OF THIS SECURITY AND THE ORDINARY SHARES ISSUABLE UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY AND SUCH SHARES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT; OR (B) PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
SCHEDULE A
INITIAL HOLDERS OF THE WARRANTS
|
|
|
|
|
|
| Name of Registered Holder |
Underlying Shares |
| [__]................................................................................................................ |
[__] |
| [__]................................................................................................................ |
[__] |
| [__]................................................................................................................ |
[__] |
| [__]................................................................................................................ |
[__] |
| [__]................................................................................................................ |
[__] |
| [__]................................................................................................................ |
[__] |
| [__]................................................................................................................ |
[__] |
| Total Number of Underlying Shares.......................................................... |
# of Underlying Shares |
[*] Must be a whole number.
[†] Must be a whole number.
EX-4.8
6
a20-fxexhibit48x2025.htm
EX-4.8
Document
Exhibit 4.8
[English Summary of Original Hebrew Agreement]
The following is a summary of the terms of material provisions of Revolving Credit Facility Agreement governed by Israeli law (the “Agreement”) entered into on March 3, 2026 between Bank Hapoalim Ltd. (the “Lender”) and Wix.com Ltd. (the “Company”).
1.Facility Mechanics
•Amount: US$ 500 million (Five Hundred Million United States Dollars).
•Availability period: Any time between April 1, 2026 and March 31, 2027.
•Utilization & Tenor: The facility may be utilized in one or two separate term loans during the availability period. The tenor of each drawdown will be determined on the date of the withdrawal.
•Repayment: Interest is payable monthly. Principal is payable at the maturity of each loan withdrawal.
2.Pricing & Fees
•Interest Rate:
oFirst $400 million (Four Hundred Million United States Dollars): monthly SOFR + TFSI Basis Bid + 0.3%
oFinal $100 million (One Hundred Million United States Dollars): monthly SOFR + TFSI Basis Bid + 1.05%
•Calculation: Interest is calculated on the basis of actual days elapsed over a 360-day year.
•Commitment Fee: $30,000/month (paid until the final $100 million is drawn or cancelled). No other upfront fees.
•Default Interest: Fixed 8% (eight percent)
3.Covenants & Security
•Financial Covenant: Bank Debt to Free Cash Flow (FCF) ratio ≤ 2.0x.
o"Bank Debt" is defined in the Agreement as the outstanding bank credit balance not secured by full cash collateral (credit exposure on the Company), excluding lease liabilities, guarantees, rent obligations, intercompany debt, and credit secured by full deposits.
o"Free Cash Flow" is defined in the Agreement as cash flows from operating activities (as presented in the Company's financial statements) less capital expenditures, excluding one-time/non-recurring expenses.
•Collateral: The Company will: (i) maintain 1 billion NIS (One Billion New Israeli Shekels) in Treasury Bills (Makam) deposited with the Lender, that the Company has undertaken not to withdraw or otherwise dispose during the tenor; and (ii) maintain its existing US$ 120 million (One Hundred and Twenty Million United States Dollars) cash deposit with the Lender (both to be held in a designated account).
•Security: (i) Negative Floating Charge - the Company will not create a general floating charge on all or substantially all of the Company’s assets; and (ii) customary contractual and statutory rights of lien and set-off in favor of the Lender.
4.Flexibility (Prepayment & Cancellation)
•Cancellation: The Company may cancel the facility at any time upon seven days’ prior notice, without penalty.
•Early Repayment: The Company can repay any amount outstanding, at anytime, with 30 days' notice to the Lender, subject to payment of an early repayment fee based on the margin between the applicable interest on such part of the loan and the alternative standard interest of the Lender on deposits at the time of the repayment. A 1% penalty on the amount of such drawdown applies if the 30-day notice is not provided.
5.Events of Default
The Agreement contains customary events of default for a credit facility of this type, including: Non-payment; insolvency-related events; cross-default to other financial indebtedness above an agreed threshold; and material adverse effect (as defined in the Agreement).
Upon the occurrence of an event of default and subject to applicable law, the Lender may elect to terminate its commitments or cease making further loans, accelerate the outstanding loans and require immediate repayment.
EX-8.1
7
a20-fxexhibit81x2025.htm
EX-8.1
Document
EXHIBIT 8.1
LIST OF SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Subsidiary |
|
Jurisdiction |
|
Ownership Interest |
Wix.com Brasil Serviços De Internet Ltda. |
|
Brazil |
|
100% |
Wix.com, Inc. |
|
Delaware, United States |
|
100% |
Wix.com Luxemburg S.a.r.l |
|
Luxemburg |
|
100% |
Wix.com UAB |
|
Lithuania |
|
100% |
DeviantArt, Inc. |
|
Delaware, United States |
|
100% (held by Wix.com Inc.) |
Wix Online Platform Limited |
|
Ireland |
|
100% |
Wix.com Japan K.K. |
|
Japan |
|
100% |
EX-11.1
8
axex111xinsidertradingpoli.htm
EX-11.1
Document
WIX.COM LTD.
Last Updated: February 4, 2025
INSIDER TRADING POLICY
This document sets forth the Insider Trading Policy (the “Policy”) of Wix.com Ltd. and its subsidiaries (collectively, “Wix”). The Policy establishes the policies and procedures that govern trading by Wix personnel in Wix securities and securities of any other company about which such personnel comes into possession of material, nonpublic information in the course of performing his or her duties for Wix. The Policy has been adopted by Wix to fulfill its responsibilities as a public company under U.S. federal securities laws to prevent insider trading and to help its personnel avoid the severe consequences associated with violations of the insider trading laws. The Policy is also intended to prevent even the appearance of improper conduct on the part of anyone employed by or associated with Wix. Should you have any questions regarding this Policy, please contact Naama Kaenan, Wix’s General Counsel (the “Stock Compliance Officer”).
It is important that all Wix personnel review the Policy carefully. Noncompliance with the Policy is grounds for immediate dismissal. Failure to comply with the policies and procedures set forth below also can result in a serious violation of the U.S. federal securities laws, leading to potential civil and criminal penalties.
I.Scope of Policy
All directors, officers and other employees of Wix, and, if designated by the Stock Compliance Officer as a covered entity (1) all directors and officers of a joint venture in which Wix has a financial interest (such a joint venture is referred to as a “Related Company”) and (2) any full-time consultant or contractor of Wix or a Related Company, are subject to the prohibitions set forth in this Policy (each such person subject to the Policy is referred to as a “Covered Person”). Wix may determine that this Policy applies to additional persons with access to material, nonpublic information, such as part-time contractors or consultants, and upon such determination, each such person shall be deemed a Covered Person for the purpose of this Policy.
The restrictions imposed by the Policy as set forth herein apply to trading in any Wix securities, as well as any instrument that derives its value from the price of Wix securities, including but not limited to, puts, calls, warrants, options and convertible securities whether or not issued by Wix (a “Derivative Security”). The restrictions imposed by the Policy as set forth herein also apply to trades in securities of any Related Company and any other company about which any Covered Person learns material, nonpublic information in the course of performing his or her duties for Wix, such as securities of any company with which Wix may be entering into or negotiating major transactions and Derivative Securities of any of such securities.
II.Persons Subject to this Policy
Each of the policies and procedures under the Policy that is binding on a Covered Person also applies to the “Associates” of such Covered Person, which consist of: (i) any Family Member who resides in the household as a Covered Person; (ii) anyone else who lives in the household of a Covered Person; and (iii) any Family Member who does not live in the household of a Restricted Person but whose transactions in Wix securities or Derivative Securities are directed by or subject to the influence or control of a Covered Person (such as parents or children who consult with you before they trade in Wix securities or Derivative Securities). Family Members consist of the following persons: any child, stepchild, grandchild, parent, stepparent, grandparent, spouse (or comparable co-habitation relationship), sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, in each case including adoptive relationships.
This Policy applies to any entities that a Covered Person controls, including any controlled corporations, partnerships or trusts, and transactions by such entities should be treated for the purposes of this Policy as if they were for the account of the Covered Person, unless the entity engages in the investment of securities in the ordinary course of its business (e.g., an investment fund or partnership) and confirms to the Stock Compliance Officer that it has established its own policies and procedures for compliance with insider trading restrictions under applicable securities laws.
Situations may exist where a Covered Person has a record ownership of or beneficial interest in securities, but has no responsibility for investment decisions, such as, for example, where the investment decisions have been delegated to an investment adviser. In such cases, this Policy is not intended to proscribe dealings in securities so long as the Covered Person has neither discussed the merits of the investment with, nor provided inside information to, the person or persons having the decision-making investment responsibility. Similarly, this Policy does not proscribe the purchase, sale or holding of an interest in a publicly traded mutual fund, even if the fund holds or trades in Wix securities or Derivative Securities.
As set forth in a separate Addendum to this Policy and subject to Section V hereof, all directors and officers of Wix, and any other employees of Wix, or employees of, or consultants or contractors to, Wix or a Related Company designated by the Stock Compliance Officer (each such person subject to the Addendum is referred to as an “Addendum Covered Person”) are required to obtain prior approval for all trades in Wix securities or Derivative Securities and pledging of Wix securities.
III.General Insider Trading Prohibition
Any Covered Person who possesses knowledge of any “material information” concerning Wix that has not been disclosed to the public is prohibited from (i) trading in Wix securities or Derivative Securities, (ii) advising others to trade or to refrain from trading in Wix securities or Derivative Securities, or (iii) disclosing the material information to any other person for the purpose of enabling such person to trade or to refrain from trading in Wix securities or Derivative Securities. These restrictions remain in effect until the close of trading on the first full trading day following the public disclosure of the information, or until the information, although not disclosed, ceases to be material.
Any Covered Person who obtains, in the course of his or her employment with or engagement by Wix, knowledge of any “material information” concerning any other company that has not been disclosed to the public is prohibited from (i) trading in securities of such other company or Derivative Securities of such other company, (ii) advising others to trade in securities of such other company or Derivative Securities of such other company, or (iii) disclosing the material information to any other person for the purpose of enabling such person to trade in securities of such other company or Derivative Securities of such other company. These restrictions remain in effect until the close of trading on the first full trading day following the public disclosure of the relevant information, or until the information, although not disclosed, ceases to be material.
For purposes of insider trading liability, it does not matter that delaying the transaction until the material, nonpublic information is disclosed or ceases to be material might cause the Covered Person or an associate of a Covered Person to incur a financial loss, or whether there is some independent reason for the transaction (such as the need to raise money for an emergency expenditure). In addition, except in the limited circumstances discussed below (see “Approved Trading Plans”), it does not matter that a Covered Person or an Associate of a Covered Person may have decided to engage in a transaction before learning of the undisclosed material information. Further, it also is irrelevant that publicly disclosed information about Wix would, without consideration of the undisclosed material information, provide a substantial basis for engaging in the transaction. The federal securities laws do not recognize any such mitigating circumstances and further, even the appearance of an improper transaction must be avoided to preserve Wix’s reputation for adhering to the highest standards of conduct.
Material Information
In general, information is considered material as it relates to any company if there is a substantial likelihood that a reasonable investor would consider the information important in making a decision to buy, hold or sell securities of such company. While this standard is not always easy to apply, any information that could reasonably be expected to affect the price of Wix’s ordinary shares (or other Wix security or Derivative Security that is the subject of the transaction), whether positive or negative, should be considered material. Some examples of information that is almost always regarded as material include: significant transactions such as pending or proposed mergers, tender offers, acquisitions or dispositions; financial forecasts (especially earnings estimates); corporate restructurings; regulatory rulings; unanticipated changes in the level of sales, earnings or expenses or earnings that are not consistent with the consensus expectations of the investment community; material changes to previously filed financial statements; credit rating changes; stock splits; stock dividends; equity or debt offerings; management changes; entry into or loss of a substantial contract not in the ordinary course of business; impending bankruptcy or the existence of severe liquidity problems; and similar matters. Any Covered Person who has questions as to the materiality of any nonpublic information is advised to contact the Stock Compliance Officer for guidance. When in doubt as to the materiality of any nonpublic information, Covered Persons should refrain from trading.
Public Disclosure
Disclosure of material information to the public generally means the disclosure of the information in a filing with the Securities and Exchange Commission (the “SEC”) (such as Wix’s annual report on Form 20-K or current reports on Form 6-K) or otherwise released broadly to the marketplace (such as by a press release). More limited dissemination of the information, such as in a company communication to employees (even if it is to all employees generally) does not qualify as public disclosure. To ensure adequate disclosure, one full trading day should be permitted following public disclosure to allow the securities markets opportunity to digest the news.
Tipping
Covered Persons who cannot trade in Wix securities, Derivative Securities, securities of any other company or derivative securities of such securities, by reason of the possession of material, nonpublic information also may not either (i) disclose such information to any other person for the purpose of allowing the other person to trade in the above securities or (ii) provide trading advice with respect to the above securities (even though the nonpublic information that provides the basis for the advice is not disclosed to the person). Any such disclosure or trading advice constitutes a violation of the federal securities laws (referred to as “tipping”) and can result in liability for both the tipper and the tippee, as well as for Wix and supervisory personnel.
IV.Blackout Periods
Regular Blackout Periods
Each year, there are four regular blackout periods from trading (the “Quarterly Blackout Periods”). Each Quarterly Blackout Period begins at 12:01 a.m. Eastern time on the 16th day of the third month of the quarter (i.e., 12:01 a.m. Eastern time on each March 16, June 16, September 16 and December 16) and ends at the close of trading on the first full trading day following the public dissemination by Wix of its quarterly (or, in the case of the fourth quarter, annual) financial results by press release to the national wire services or by making a filing with the SEC.
Covered Persons and their Associates are prohibited from trading in Wix securities or Derivative Securities during Quarterly Blackout Periods.
Designated Blackout Periods
Any Covered Person, at any time and from time to time, may be informed by the Stock Compliance Officer that he or she, and his or her Associates, are subject to a designated blackout period (a “Designated Blackout Period” and, together with a Quarterly Blackout Period, a “Blackout Period”) due to such person’s involvement in or knowledge of a particular matter. Covered Persons so advised are prohibited from trading in Wix securities or Derivative Securities until they receive further notice from the Stock Compliance Officer. The existence of a Designated Blackout Period will not be announced other than to those who are subject to it. Any Covered Person or their Associates made aware of the existence of a Designated Blackout Period should not disclose the existence of such blackout for any reason.
It is important to keep in mind that, even at times when a Blackout Period is not in effect, the prohibition on trading while in possession of material, nonpublic information continues to apply.
V.Approved Trading Plans
Transactions by Covered Persons and their Associates pursuant to a written trading plan (an “Approved Plan”) will not violate this Policy and are not subject to the Blackout Period restrictions or pre-clearing procedures if the following conditions are met:
•The Approved Plan and trades thereunder must meet the requirements of Wix’s “Guidelines for Rule 10b5-1 Plans,” which may be obtained from the Stock Compliance Officer.
•the Stock Compliance Officer must approve the Approved Plan prior to any transaction being completed thereunder.
•The Approved Plan must comply with the requirements of Rule 10b5-1 (“Rule 10b5-1”) under the Securities Exchange Act of 1934, as amended (the “1934 Act”), including the following:
(i)it must be a written, binding contract, instruction or plan entered into in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1, it must be entered into outside of a Blackout Period and at such time when the Covered Person is not in possession of material, nonpublic information about Wix or the securities covered by the Approved Plan, and, to the extent required by Rule 10b5-1, it must contain representations certifying as to the same;
(ii)the Approved Plan must expressly specify the amounts, prices and dates of transactions (specifically or through a written formula, or a combination thereof) or confer discretionary authority on another person (who is not a Covered Person or Associate and otherwise is not in possession of material, nonpublic information about Wix or the securities covered by the Approved Plan) to effect one or more purchase or sale transactions for the account of the instructing person;
(iii)the instructing person may not exercise any subsequent influence over how, when or whether the transactions are effected;
(iv) the purchase or sale of the Wix securities or Derivative Securities subject to the Approved Plan must occur pursuant to the Approved Plan (unless earlier terminated); and
(v)it must include any applicable “cooling-off period” required by Rule 10b5-1 between the date of adoption of the Approved Plan and date purchases or sales begin under the Approved Plan.
•Any Covered Person or their Associate must report to the Stock Compliance Officer (i) all transactions made pursuant to the Approved Plan and (ii) the completion or termination of the Approved Plan.
The Stock Compliance Officer will approve any Approved Plan that complies with the terms of this Section V.
A contract, instruction or plan of the type described above will generally only be necessary for an Addendum Covered Person and other persons who routinely come into contact with material, nonpublic information, and should not generally be necessary or required for other Covered Persons.
VI.Short-Term Speculation; Hedging Transactions; Pledges Restrictions
Wix considers it improper and inappropriate for any Covered Person or their Associates to engage in short-term or speculative transactions in Wix securities or in other transactions in Wix securities that may transfer the full risks and rewards of ownership over Wix securities. Therefore, Wix has the following policies regarding certain transactions:
•Short Selling. Short sales of Wix's securities (i.e., the sale of a security that the seller does not own) evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in Wix or its short-term prospects. In addition, short sales may reduce the seller's incentive to improve Wix's performance. For these reasons, short sales of Wix's securities are expressly prohibited by this Policy. Short sales arising from certain types of hedging transactions are governed by “Hedging Transactions” below.
•Publicly Traded Options. A transaction in options is, in effect, a bet on the short-term movement of Wix shares and therefore creates the appearance of trading based on inside information. Transactions in options also may focus attention on short-term performance at the expense of long-term objectives. Accordingly, transactions in puts, calls or other derivative securities, on an exchange or in any other organized market, are prohibited.
•Standing Orders. A standing order placed with a broker to sell or purchase Wix shares at a specified price leaves the shareholder with no control over the timing of the transaction. A transaction pursuant to a standing order – which does not meet the standards of an Approved Plan – executed by the broker when the Covered Person is aware of material, nonpublic information may result in unlawful insider trading. Accordingly, standing orders are prohibited during any Blackout Period and at any time that the Covered Person is aware of material, nonpublic information. Any pending standing order must be cancelled before the commencement of any Blackout Period or when a Covered Person becomes aware of material, nonpublic information.
•Hedging Transactions. Certain forms of hedging or monetization transactions allow Covered Persons to lock in much of the value of their Wix securities, often in exchange for all or part of the potential for upside appreciation in the securities. These transactions allow the Covered Person to continue to own the covered Wix security, but without the full risks and rewards of ownership. Such transactions may use methodologies or financial instruments including, but not limited to, short sales, puts, calls, collars, prepaid variable forward contracts, and exchange funds. When that occurs, the Covered Person may no longer have the same objectives as Wix’s other securityholders. Therefore, subject to Section IX, Covered Persons are prohibited from employing any such methodologies or using any such financial instruments with respect to a Wix security.
•Margin Accounts and Pledges. Subject to Section IX, Covered Persons may not hold Wix securities in a margin account or pledge Wix securities as collateral because a margin or foreclosure sale may occur when such Covered Person is aware of material, nonpublic information or otherwise prohibited from trading in Wix securities.
Any Covered Person who has questions as to whether a particular strategy would violate the Policy is advised to contact the Stock Compliance Officer.
VII.Application of the Policy to Specific Transactions
The provisions of the Policy apply to various investment decisions concerning Wix securities made by a Covered Person in connection with Wix’s equity incentive plans, as are in effect from time to time.
Equity Incentive Plans
The Policy does not apply to the grant or the cash exercise of share options granted under Wix’s equity incentive plans as in effect from time to time, and also would not apply to the delivery of shares to Wix, or the withholding of shares by Wix, upon exercise of such options as payment of the exercise price for such options or for tax withholding, to the extent such transactions are permissible under the equity incentive plans. However, the delivery of Wix shares to any third party in payment for the exercise price of a share option and/or for tax withholding, known as a “cashless” or “same-day sale” exercise, as well as any sale to a third party of Wix shares acquired upon the exercise of a share option, is subject to the same restrictions that apply to any other sale of Wix shares, including the Prior Approval Requirement set forth in the Addendum if the person effecting any such transaction is an Addendum Covered Person. These restrictions also apply to any Associate who acquires a transferred stock option.
The Policy also does not apply to the award of restricted shares or restricted share units or the withholding of shares by Wix from such restricted shares or restricted share units for tax withholding purposes. The sale of Wix shares acquired on the date of release of shares issued pursuant to such awards to any third party (including for tax withholding purposes) is subject to the same restrictions that apply to any other sale of Wix shares, including the Prior Approval Requirement set forth in the Addendum if the person effecting any such transaction is an Addendum Covered Person, unless such sale is made pursuant to an irrevocable direction to sell Wix shares, for tax withholding purposes, as contained in a restricted share unit award agreement.
Employee Share Purchase Plan
The Policy does not apply to purchases of Wix shares under Wix’s employee share purchase plan (the “ESPP”) resulting from Covered Persons’ periodic contribution of money to the ESPP through payroll deductions pursuant to previously made elections at the time of enrollment in the ESPP. However, a sale of Wix shares purchased pursuant to the ESPP is subject to the same restrictions that apply to any other sale of Wix shares, including the Prior Approval Requirement set forth in the Addendum if the person effecting any such transaction is an Addendum Covered Person; provided, however, that Wix will permit Covered Persons to make an election to sell shares purchased pursuant to the ESPP in a manner that complies with Rule 10b5-1.
Gifts
Gifts of Wix securities or Derivative Securities during a Blackout Period may only be made with the prior written approval of the Stock Compliance Officer. To the extent approval is granted, the recipient of a gift who is a Covered Person or an Associate of a Covered Person would be subject to the restrictions of this Policy in connection with any subsequent sale of the gifted securities.
VIII.Post-Termination Transactions
The restrictions imposed by the Policy, including any Blackout Period then in effect, will continue to apply to a Covered Person and their Associates after the termination of his or her employment with or engagement by Wix for such period of time as such Covered Person is in possession of material, nonpublic information until the close of trading on the first full trading day following the public dissemination of that information or the nonpublic information is no longer material.
IX.Reason for the Prohibition
Under the federal securities laws, it is unlawful for any director, officer or employee of, or any person otherwise associated with, a public company to trade, or to enable others to trade, in the securities of that company while in possession of material, nonpublic information with an intent to deceive and in breach of a duty of trust or confidence. Violators may be subject to criminal prosecution and/or civil liability.
A criminal prosecution can result in a fine of up to $5 million (no matter how small the profit or even if there is a loss) and imprisonment for up to 20 years. Civil actions may be brought by a private plaintiff or the SEC. A person who has been found in a civil action brought by the SEC to have violated the prohibition on insider trading can be held liable for a penalty up to three times the profit gained, or the loss avoided, by the person who traded while in possession of material, nonpublic information. The SEC also has the authority to obtain a court order that bars a person who has engaged in insider trading from serving, either permanently or for a period of time, as a director or officer of a public company. There are no limits on the size of the transaction that can trigger insider trading liability. Relatively small trades have in the past occasioned civil and criminal investigations and lawsuits.
Insider trading also can generate significant adverse publicity and, as a result, cause a substantial loss of confidence in Wix and its securities on the part of the public and the securities markets. This could have an adverse impact on the price of Wix shares and other securities to the detriment of Wix and its shareholders.
Remember, anyone scrutinizing your transactions in Wix securities or Derivative Securities will be doing so after the fact, with the benefit of hindsight. As a practical matter, before engaging in any transaction, you should carefully consider how enforcement authorities and others might view the transaction in hindsight.
X.Policy Administration and Waiver
The Stock Compliance Officer has authority to interpret and implement the Policy to the extent consistent with its general purpose and applicable securities laws. The Stock Compliance Officer is authorized to delegate such authority to any Covered Person. The Chief Financial Officer will administer the Policy as it applies to any trading activity by the Stock Compliance Officer.
The Stock Compliance Officer is further authorized to approve any waiver of the terms of this Policy, provided that the Nominating, Environmental, and Corporate Governance Committee of Wix’s Board of Directors will approve any waiver of the terms of the Policy in the case of directors and executive officers as named in Wix’s most recent Annual Report on Form 20-F (“Named D&Os”).
XI.Conclusion
Wix will strictly enforce the prohibitions against insider trading and the additional restrictions and procedures set forth in this Policy. Any Covered Person, or their Associate, who is uncertain regarding the applicability of the Policy is urged to contact the Stock Compliance Officer prior to executing any sale or purchase transaction involving Wix securities or Derivative Securities to determine if he or she may properly proceed. Directors and officers of Wix should be particularly careful, since avoiding the appearance of engaging in share transactions on the basis of material, nonpublic information can be as important as avoiding consummating a transaction actually based on such information.
WIX.COM LTD.
INSIDER TRADING POLICY
ACKNOWLEDGMENT
The undersigned hereby acknowledges receipt of the attached Insider Trading Policy (the “Policy”) of Wix.com Ltd. (“Wix”) and hereby covenants that he or she will strictly comply with the Policy. The undersigned hereby agrees that if he or she is contemplating a sale or purchase transaction involving any Wix securities or a Derivative Security (as defined in the Policy) and is unsure of the applicability of the Policy that he or she will contact the Stock Compliance Officer prior to executing the transaction to determine if he or she may properly proceed.
Directors and any officers should be particularly careful to avoid even the appearance of engaging in any stock transaction on the basis of material, nonpublic information, which can be as important as avoiding a transaction actually based on such information.
By:
Name:
Title:
Date:
Please acknowledge your receipt of the attached insider trading policy by dating and signing this acknowledgment and returning it to the legal department in the Wix corporate headquarters.
ADDENDUM 1 – PRIOR APPROVAL REQUIREMENT
TO WIX.COM LTD. INSIDER TRADING POLICY APPLICABLE TO DIRECTORS, OFFICERS AND CERTAIN DESIGNATED EMPLOYEES
In addition to compliance with the general insider trading prohibition, subject to Section V of the Insider Trading Policy (the “Policy”) of Wix.com Ltd., all directors and officers of Wix, and any other employees of Wix, or employees of, or consultants or contractors to, Wix or a Related Company designated by the Stock Compliance Officer (each such person subject to the Addendum is referred to as an “Addendum Covered Person”) are required to adhere to the following additional restrictions and procedures when trading in Wix securities and Derivative Securities.
In addition to the Blackout Periods and compliance with the general prohibition on insider trading, all Addendum Covered Persons must obtain the approval of the Stock Compliance Officer, or anyone to whom the Stock Compliance Officer delegated such approval authority, before effecting a trade in Wix securities or Derivative Securities (the “Prior Approval Requirement”) (to the extent that such persons are permitted to trade in Derivative Securities consistent with the restrictions described in Part VI of the Policy). The Prior Approval Requirement also applies to Associates of the foregoing individuals. A request form for prior approval should be submitted 48 hours prior to the proposed transaction date.
Addendum Covered Persons who have questions regarding the Prior Approval Requirement are advised to contact the Stock Compliance Officer. Capitalized terms used but not defined in this Addendum have the meanings ascribed to them in the Policy.
ADDENDUM 2 – GUIDELINES FOR RULE 10B5-1 PLANS
TO WIX.COM LTD. INSIDER TRADING POLICY APPLICABLE TO DIRECTORS, OFFICERS AND CERTAIN DESIGNATED EMPLOYEES
Rule 10b5-1 provides a defense from insider trading liability. In order to be eligible to rely on this defense, a person subject to this Policy must enter into a contract, instruction, or plan to purchase or sell securities that satisfies the conditions of Rule 10b5-1, as in effect at such time (a “Rule 10b5-1 Plan”). If the plan meets the requirements of Rule 10b5-1, Wix securities may be purchased or sold without regard to certain insider trading restrictions. In general, a Rule 10b5-1 Plan must be entered into at a time when the person entering into the plan is not aware of material, nonpublic information about Wix or the securities covered by the plan. Once the plan is adopted, the person must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded or the date of the trade. The plan must either specify the amount, pricing and timing of transactions in advance or delegate discretion on these matters to an independent third party.
As specified in the Insider Trading Policy (the “Policy”) of Wix.com Ltd., a Rule 10b5-1 Plan must be approved by the Stock Compliance Officer and meet the requirements of Rule 10b5-1 and these guidelines. Any Rule 10b5-1 Plan must be submitted for approval prior to the entry into the Rule 10b5-1 Plan. No further pre-approval of transactions conducted pursuant to the Rule 10b5-1 Plan will be required. Capitalized terms used but not defined in this Addendum have the meanings ascribed to them in the Policy.
The following guidelines apply to all Rule 10b5-1 Plans:
•All executive officers and other members of Wix’s senior management team designated by Wix’s Chief Executive Officer may only execute trades pursuant to a Rule 10b5-1 Plan, provided, however, that Wix’s nominating and corporate governance committee may approve that any specific trade executed by such person may be executed outside of a Rule 10b5-1 Plan, subject to satisfaction of any other applicable condition under the Policy and the Prior Approval Requirement (as defined in Addendum 1).
•You may only enter into or modify a Rule 10b5-1 Plan program outside of a Blackout Period provided you are not in possession of material, nonpublic information.
•The duration of a Rule 10b5-1 Plan may be subject to the terms of respective brokers.
•You may not commence sales under a trading program until at least 30 days following the date of establishment of a trading program, and Named D&Os are subject to a longer “cooling-off period” as required by Rule 10b5-1.
•If a Rule 10b5-1 Plan is terminated, there will be no additional “cooling-off period” other than as required by Rule 10b5-1.
•Certain modifications of a trading program (i.e., those that change the amount, price, or timing of purchases or sales) must not take effect until at least 30 days following the date of the modification, with Named D&Os subject to a longer “cooling-off period” as required by Rule 10b5-1. The unmodified trading program can continue in effect until the modified plan takes effect.
EX-12.1
9
a20-fxexhibit121x2025.htm
EX-12.1
Document
EXHIBIT 12.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Avishai Abrahami, certify that:
1. I have reviewed this Annual Report on Form 20-F of Wix.com Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.
5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
/s/ Avishai Abrahami
Avishai Abrahami
Co-Founder, Chief Executive Officer and Director
Date: March 5, 2026
EX-12.2
10
a20-fxexhibit122x2025.htm
EX-12.2
Document
EXHIBIT 12.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Lior Shemesh, certify that:
1. I have reviewed this Annual Report on Form 20-F of Wix.com Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.
5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
/s/ Lior Shemesh
Lior Shemesh
Chief Financial Officer
Date: March 5, 2026
EX-13.1
11
a20-fxexhibit131x2025.htm
EX-13.1
Document
EXHIBIT 13.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Wix.com Ltd., or the Company, on Form 20-F for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof, or the Report, I, Avishai Abrahami, do certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Avishai Abrahami
Avishai Abrahami
Co-Founder, Chief Executive Officer and Director
Date: March 5, 2026
EX-13.2
12
a20-fxexhibit132x2025.htm
EX-13.2
Document
EXHIBIT 13.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Wix.com Ltd., or the Company, on Form 20-F for the fiscal year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof, or the Report, I, Lior Shemesh, do certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Lior Shemesh
Lior Shemesh
Chief Financial Officer
Date: March 5, 2026
EX-15.1
13
a20-fxexhibit151x2025.htm
EX-15.1
Document
EXHIBIT 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the following Registration Statements:
1.Registration Statement (Form S-8 Nos. 333-206611, 333-211143, 333-217822, 333-224768, No. 333-231501, 333-238250, 333-255946, 333-264976 and 333-270974) pertaining to the 2013 Incentive Compensation Plan of Wix.com Ltd., and
2.Registration Statement (Form S-8 Nos. 333-231499, 333-238251, 333-255947, 333-264975, 333-270975, 333-197899, 333-206610, 333-211144, 333-217821 and 333-224769) pertaining to the Amended and Restated 2013 Employee Stock Purchase Plan of Wix.com Ltd.
of our reports dated March 21, 2025, with respect to the consolidated financial statements of Wix.com Ltd. and the effectiveness of internal control over financial reporting of Wix.com Ltd. included in this Annual Report (Form 20-F) of Wix.com Ltd. for the year ended December 31, 2024.
/s/ Kost Forer Gabbay & Kasierer
A Member of EY Global
Tel Aviv, Israel
March 5, 2026
EX-97.1
14
a20-fxexhibit971x2025.htm
EX-97.1
Document
EXHIBIT 97.1
WIX.COM LTD.
POLICY FOR RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
Wix.com Ltd. (the “Company”) has adopted this Policy for Recovery of Erroneously Awarded Compensation (the “Policy”), effective as of October 2, 2023 (the “Effective Date”). Capitalized terms used in this Policy but not otherwise defined herein are defined in Section 11.
1. Persons Subject to Policy
This Policy shall apply to and be binding and enforceable on current and former Officers. In addition, the Committee and the Board may apply this Policy to persons who are not Officers, and such application shall apply in the manner determined by the Committee and the Board in their sole discretion.
2. Compensation Subject to Policy
This Policy shall apply to Incentive-Based Compensation received on or after the Effective Date. For purposes of this Policy, the date on which Incentive-Based Compensation is “received” shall be determined under the Applicable Rules, which generally provide that Incentive-Based Compensation is “received” in the Company’s fiscal period during which the relevant Financial Reporting Measure is attained or satisfied, without regard to whether the grant, vesting or payment of the Incentive-Based Compensation occurs after the end of that period.
3. Recovery of Compensation
In the event that the Company is required to prepare a Restatement, the Company shall recover, reasonably promptly and in accordance with Section 4 below, the portion of any Incentive-Based Compensation that is Erroneously Awarded Compensation, unless the Committee and the Board have determined that recovery from the relevant current or former Officer would be Impracticable. Recovery shall be required in accordance with the preceding sentence regardless of whether the applicable Officer engaged in misconduct or otherwise caused or contributed to the requirement for the Restatement and regardless of whether or when restated financial statements are filed by the Company. For clarity, the recovery of Erroneously Awarded Compensation under this Policy will not give rise to any Officer’s right to voluntarily terminate employment for “good reason” or due to a “constructive termination” (or any similar term of like effect) under any plan, program or policy of or agreement with the Company or any of its affiliates.
4. Manner of Recovery; Limitation on Duplicative Recovery
The Committee and the Board shall, in its sole discretion, determine the manner of recovery of any Erroneously Awarded Compensation, which may include, without limitation, reduction or cancellation by the Company or an affiliate of the Company of Incentive-Based Compensation or Erroneously Awarded Compensation, reimbursement or repayment by any person subject to this Policy of the Erroneously Awarded Compensation, and, to the extent permitted by law, an offset of the Erroneously Awarded Compensation against other compensation payable by the Company or an affiliate of the Company to such person. Notwithstanding the foregoing, unless otherwise prohibited by the Applicable Rules, to the extent this Policy provides for recovery of Erroneously Awarded Compensation already recovered by the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 or Other Recovery Arrangements, the amount of Erroneously Awarded Compensation already recovered by the Company from the recipient of such Erroneously Awarded Compensation may be credited to the amount of Erroneously Awarded Compensation required to be recovered pursuant to this Policy from such person.
5. Administration
This Policy shall be administered, interpreted and construed by the Committee, which is authorized to make all determinations necessary, appropriate or advisable for such purpose. The Board may re-vest in itself the authority to administer, interpret and construe this Policy in accordance with applicable law, and in such event references herein to the “Committee” shall be deemed to be references to the Board. Subject to any permitted review by the applicable national securities exchange or association pursuant to the Applicable Rules, all determinations and decisions made by the Committee pursuant to the provisions of this Policy shall be final, conclusive and binding on all persons, including the Company and its affiliates, shareholders and employees. The Committee may delegate administrative duties with respect to this Policy to one or more directors or employees of the Company, as permitted under applicable law, including any Applicable Rules.
6. Interpretation
This Policy shall be interpreted and applied in a manner that is consistent with the requirements of the Applicable Rules, and to the extent this Policy is inconsistent with such Applicable Rules, it shall be deemed amended to the minimum extent necessary to ensure compliance therewith.
7. No Indemnification; No Liability
The Company shall not indemnify or insure any person against the loss of any Erroneously Awarded Compensation pursuant to this Policy, nor shall the Company directly or indirectly pay or reimburse any person for any premiums for third-party insurance policies that such person may elect to purchase to fund such person’s potential obligations under this Policy. None of the Company, an affiliate of the Company or any member of the Committee or the Board shall have any liability to any person as a result of actions taken under this Policy.
8. Application; Enforceability
Except as otherwise determined by the Committee or the Board, the adoption of this Policy does not limit, and is intended to apply in addition to, any Other Recovery Arrangements. Without limiting the foregoing, in the event of a conflict between this Policy and the Compensation Policy, the latter shall prevail, except with respect to the recovery of any portion of Incentive-Based Compensation that is Erroneously Awarded Compensation that would not be recoverable under the Compensation Policy, in which case this Policy shall prevail. Subject to Section 4, the remedy specified in this Policy shall not be exclusive and shall be in addition to every other right or remedy at law or in equity that may be available to the Company or an affiliate of the Company or is otherwise required by applicable law and regulations.
9. Severability
The provisions in this Policy are intended to be applied to the fullest extent of the law; provided, however, to the extent that any provision of this Policy is found to be unenforceable or invalid under any applicable law, such provision will be applied to the maximum extent permitted, and shall automatically be deemed amended in a manner consistent with its objectives to the extent necessary to conform to any limitations required under applicable law.
10. Amendment and Termination
The Board or the Committee may amend, modify or terminate this Policy in whole or in part at any time and from time to time in its sole discretion. This Policy will terminate automatically when the Company does not have a class of securities listed on a national securities exchange or association in the U.S.
11. Definitions
“Applicable Rules” means Section 10D of the Exchange Act, Rule 10D-1 promulgated thereunder, the listing rules of the national securities exchange or association on which the Company’s securities are listed, and any applicable rules, standards or other guidance adopted by the Securities and Exchange Commission or any national securities exchange or association on which the Company’s securities are listed.
“Board” means the Board of Directors of the Company.
“Compensation Policy” means the Wix.com Ltd. Compensation Policy - Executives, as adopted in accordance with the Israeli Companies Law 5759-1999 and as in effect from time to time.
“Committee” means the Compensation Committee of the Board or, in the absence of such a committee, a majority of the independent directors serving on the Board.
“Erroneously Awarded Compensation” means the amount of Incentive-Based Compensation received by a current or former Officer that exceeds the amount of Incentive-Based Compensation that would have been received by such current or former Officer based on a restated Financial Reporting Measure, as determined on a pre-tax basis in accordance with the Applicable Rules.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Financial Reporting Measure” means any measure determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures derived wholly or in part from such measures, including GAAP and non-GAAP financial measures, as well as stock price and total shareholder return.
“GAAP” means United States generally accepted accounting principles.
“Impracticable” means (a) the direct expense paid to third parties to assist in enforcing recovery would exceed the Erroneously Awarded Compensation; provided that the Company has (i) made reasonable attempt(s) to recover the Erroneously Awarded Compensation, (ii) documented such reasonable attempt(s) and (iii) provided such documentation to the relevant listing exchange or association, (b) the recovery would violate the Company’s home country laws adopted prior to November 28, 2022 pursuant to an opinion of home country counsel; provided that the Company has (i) obtained an opinion of home country counsel, acceptable to the relevant listing exchange or association, that recovery would result in such a violation and (ii) provided such opinion to the relevant listing exchange or association, or (c) recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and the regulations thereunder.
“Incentive-Based Compensation” means, with respect to a Restatement, any compensation that is granted, earned, or vested based wholly or in part upon the attainment of one or more Financial Reporting Measures and received by a person: (a) after such person began service as an Officer; (b) who served as an Officer at any time during the performance period for that compensation; (c) while the Company has a class of securities listed on a national securities exchange or association; and (d) during the applicable Three-Year Period.
“Officer” means each person who the Company determines serves as a Company officer, as listed in the Company’s most recently filed annual report on Form 20-F.
“Other Recovery Arrangements” means any clawback, recoupment, forfeiture or similar policies or provisions of the Company or its affiliates, including any such policies or provisions of such effect contained in any employment agreement, bonus plan, incentive plan, equity-based plan or award agreement thereunder or similar plan, program or agreement of the Company or an affiliate or required under applicable law (including, without limitation, the Compensation Policy).
“Restatement” means an accounting restatement to correct the Company’s material noncompliance with any financial reporting requirement under securities laws, including restatements that correct an error in previously issued financial statements (a) that is material to the previously issued financial statements or (b) that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.
“Three-Year Period” means, with respect to a Restatement, the three completed fiscal years immediately preceding the date that the Board, a committee of the Board, or the officer or officers of the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare such Restatement, or, if earlier, the date on which a court, regulator or other legally authorized body directs the Company to prepare such Restatement. The “Three-Year Period” also includes any transition period (that results from a change in the Company’s fiscal year) within or immediately following the three completed fiscal years identified in the preceding sentence. However, a transition period between the last day of the Company’s previous fiscal year end and the first day of its new fiscal year that comprises a period of nine to 12 months shall be deemed a completed fiscal year.
ACKNOWLEDGMENT AND CONSENT TO
POLICY FOR RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
The undersigned has received a copy of the Policy for Recovery of Erroneously Awarded Compensation (the “Policy”) adopted by Wix.com Ltd. (the “Company”), and has read and understands the Policy. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Policy.
As a condition of receiving Incentive-Based Compensation from the Company, the undersigned agrees that any Incentive-Based Compensation received on or after the Effective Date is subject to recovery pursuant to the terms of the Policy. To the extent the Company’s recovery right conflicts with any other contractual rights the undersigned may have with the Company, the undersigned understands that the terms of the Policy shall supersede any such contractual rights. The terms of the Policy shall apply in addition to any right of recoupment against the undersigned under the Compensation Policy or applicable law and regulations.
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