Wix topped quarterly forecasts;  “We have seen an improvement in all parameters”

Internet company Wix topped forecasts in the third quarter of the year, with higher revenues and a narrow non-GAAP net loss relative to analysts’ forecasts. According to GAAP rules, the company is profitable for the second consecutive quarter, thanks to its investment in Monday.com, which was recently issued on NASDAQ.

In parallel with the reports, the annual revenue forecast of Wix, Which was reduced in the previous quarter due to market uncertainty, is being updated upwards thanks to a business improvement that the company recognizes. On the other hand, the free flow forecast is reduced once again, due to increased investment in marketing for future growth, and to a lesser extent against the background of the weakness of the dollar against the shekel.

Wix, established and managed by Avishai Avrahami, Provides a platform that enables small and medium-sized businesses to set up and manage websites. The company’s revenue in the third quarter grew by 26.2% compared to the corresponding quarter and amounted to $ 321 million, of which $ 241 million came from core products (growth of 19%) and $ 79.5 million from business solutions (growth of 55%). The revaluation of Wix’s investment in Monday, and the sale of part of its holding, generated net income of $ 112 million and led to a net profit (according to GAAP) of $ 16.7 million. On a non-GAAP basis, excluding Mondays and capital gains for employees, the net loss for the quarter totaled $ 11.9 million which is 21 cents a share, while analysts expected a double loss.

Since the beginning of the year, Wix has grown 33.3% in revenue to $ 941 million, posting a GAAP net loss of $ 6.2 million and a non-GAAP net loss of $ 57.9 million, which is $ 1.02 per share.

as mentioned Wix Slightly increases the annual revenue forecast that was reduced in the previous quarter, and now expects revenue of $ 1.265-1.274 billion, a growth of 28% -29% compared to 2020. Free cash flow will amount to $ 22-27 million ($ 45-50 million excluding investment In the new offices), a decrease compared to the previous forecast to $ 35-40 million.

“We had a very successful third quarter in which we surpassed the forecasts we gave. We saw that things improved significantly and this is evident in our results,” said Lior Shemesh, CFO. , In light of the increase in demand. “Shemesh emphasizes that this is a positive move:” Once the demand increases, we can increase the investment in marketing and bring in more customers. “Because the increase in investment is in the last months of the year, we do not see an immediate effect on the top line, and this is more investment for next year.”

Nir Zohar, President of Wix, adds that “in the last year we have published quite a few lines, the most recent of which last week on a solution tailored for gyms and small businesses in the fitness field. One of our great strengths as a platform is that we have all the infrastructure within the system. “The site, but also to connect the different pieces of the system to give a specific solution to the content of each, which is different between different businesses. There will be more interesting innovations in the coming months.”

What about acquiring companies?

Zohar: “We are always looking at purchasing options. We are less interested in buying users or competitors because our marketing is more efficient, but on the other hand we are looking at strong companies that add value to us in terms of product and technological development. There are always potential acquisitions.”

As for the investment in Monday, Shemesh notes that most of the amount recorded as income from it stems from the revaluation, and a small portion of the sale of about 5% of Wix’s holdings in Monday. Wix was the first customer of Monday and Avrahami, CEO of Wix, a private investor in it that also owns it through Wix. Today, Monday is traded at a value worth $ 4 billion higher than Wix’s value, which stands at $ 11.3 billion.

How much does the weakness of the dollar against the shekel hurt you?

Sun: “It definitely has an effect, unfortunately. The effect is negative in the amount of several million dollars on the free flow every quarter. It should be remembered that within a short period of time, the dollar erodes by 5%.”

By Editor

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