Its not always compulsory, but since this ROM comes with its own gapps, you should, because without wiping data, certain apps will crash with the ROM because its a different ROM afterall.
Device Name: Nexus 5
ROM: Rastakat(all variants)/ Velocity
Other Device: Nexus S/ Nexus Prime/ Nexus 7(2012)/ Nexus 10/ LG O2X
Devices I meddled with(rough chronological order):
LG Optimus 2X, Google Nexus Prime(my new daily), Google Nexus 5(my girlfriend), Google Nexus 4(Sold), Google Nexus S(for everything else), Samsung Galaxy Note(sold), LG Optimus 4X(sold), HTC Sensation XE Pyramid(sold), Samsung Galaxy Wonder(sold)