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Wix.com (WIX) Q1 Earnings Miss Estimates, Revenues Beat
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Wix.com Ltd. (WIX - Free Report) delivered non-GAAP earnings of 3 cents per share in the first quarter of 2019, missing the Zacks Consensus Estimate by 6 cents. Notably, the company reported a loss of 6 cents in the year-ago quarter.
Total revenues surged 27% year over year to $174.3 million, surpassing the Zacks Consensus Estimate of $172.97 million. The figure also came ahead of management’s guided range of $172-$173 million.
Quarter in Detail
Collections during the reported quarter came in at $200.4 million, up 26% year over year, attributable to expansion of new products and enhancement of existing products. Management had projected collections in the range of $196 million to $197 million.
The company witnessed better-than-expected conversion and retention in its user cohorts. The company added a total of 180,000 net premium subscriptions in the reported quarter, which came in at 4.2 million as of Mar 31, 2019 (up 21% year over year).
Wix added 6.6 million registered users during the reported quarter. Registered users as of Mar 31, 2019 came in at 148 million, up 19% year over year.
During the reported quarter, average revenue per subscription (ARPS) increased 9% year over year. The surge can primarily be attributed to favorable mix of higher priced subscription packages.
In the reported quarter, Wix joined forces with Marvel Studios' Captain Marvel for the launch of Wix Turbo, a platform that enhances speeds across all Wix websites.
Further, the company enhanced Wix Code with new functionalities and rebranded it as Corbid by Wix. The renewed product is designed to aid developers manage their workflow in a streamlined manner.
We believe that these product innovations and partnership deals bode well for Wix.
The company also announced that it intends to develop a new campus and headquarters at Tel Aviv, Israel.
Operating Results
Non-GAAP gross profit advanced 23.7% from the year-ago quarter to $136 million. Nonetheless, non-GAAP gross margin contracted 200 bps to 78%.
Total operating expenses surged 27.7% to $162.4 million in the first quarter.
The company reported non-GAAP operating loss of $2.2 million wider than year-ago loss reported at $0.8 million.
As on Mar 31, 2019, Wix had cash and cash equivalents of $348.1 million, up from $331.1 million in the previous quarter.
Cash flow from operations came in at $35.1 million during the first quarter compared with $36.1 million reported in the previous quarter. Free cash flow was $30 million, compared with $32.7 million reported in the prior quarter.
Guidance
For the second quarter, the company expects revenues in the range of $182-$184 million, representing year-over-year growth of 25-26%. The Zacks Consensus Estimate for revenues is currently pegged at $184.06 million. Collections are projected to be in the range of $197-$199 million, suggesting growth in the range of 23-24% in the year-ago quarter.
The company updated fiscal 2019 guidance. Management now anticipates revenues in the range of $758-$763 million, up from prior guided range of $755-$761million. This indicates an improvement of 26% from the year-ago reported figure. The Zacks Consensus Estimate for revenues is currently pegged at $759.8 million.
Collections are projected to be in the range of $822-$830 million, suggesting growth of 25-26% from the prior-year quarter, compared with previous predicted range of $817-$827 million.
However, the company expects free cash in the range of $122-$126 million, indicating an improvement of 20-24% from the year-ago quarter, down from prior guided range of $135-$140 million.
Long-term earnings growth rate for Cadence, Verint and j2 Global is pegged at 12%, 11% and 8%, respectively.
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Image: Bigstock
Wix.com (WIX) Q1 Earnings Miss Estimates, Revenues Beat
Wix.com Ltd. (WIX - Free Report) delivered non-GAAP earnings of 3 cents per share in the first quarter of 2019, missing the Zacks Consensus Estimate by 6 cents. Notably, the company reported a loss of 6 cents in the year-ago quarter.
Total revenues surged 27% year over year to $174.3 million, surpassing the Zacks Consensus Estimate of $172.97 million. The figure also came ahead of management’s guided range of $172-$173 million.
Quarter in Detail
Collections during the reported quarter came in at $200.4 million, up 26% year over year, attributable to expansion of new products and enhancement of existing products. Management had projected collections in the range of $196 million to $197 million.
The company witnessed better-than-expected conversion and retention in its user cohorts. The company added a total of 180,000 net premium subscriptions in the reported quarter, which came in at 4.2 million as of Mar 31, 2019 (up 21% year over year).
Wix added 6.6 million registered users during the reported quarter. Registered users as of Mar 31, 2019 came in at 148 million, up 19% year over year.
During the reported quarter, average revenue per subscription (ARPS) increased 9% year over year. The surge can primarily be attributed to favorable mix of higher priced subscription packages.
Wix.com Ltd. Revenue (Quarterly)
Wix.com Ltd. revenue-quarterly | Wix.com Ltd. Quote
Latest Developments Hold Promise
In the reported quarter, Wix joined forces with Marvel Studios' Captain Marvel for the launch of Wix Turbo, a platform that enhances speeds across all Wix websites.
Further, the company enhanced Wix Code with new functionalities and rebranded it as Corbid by Wix. The renewed product is designed to aid developers manage their workflow in a streamlined manner.
We believe that these product innovations and partnership deals bode well for Wix.
The company also announced that it intends to develop a new campus and headquarters at Tel Aviv, Israel.
Operating Results
Non-GAAP gross profit advanced 23.7% from the year-ago quarter to $136 million. Nonetheless, non-GAAP gross margin contracted 200 bps to 78%.
Total operating expenses surged 27.7% to $162.4 million in the first quarter.
The company reported non-GAAP operating loss of $2.2 million wider than year-ago loss reported at $0.8 million.
Wix.com Ltd. Price, Consensus and EPS Surprise
Wix.com Ltd. price-consensus-eps-surprise-chart | Wix.com Ltd. Quote
Balance Sheet & Cash Flow
As on Mar 31, 2019, Wix had cash and cash equivalents of $348.1 million, up from $331.1 million in the previous quarter.
Cash flow from operations came in at $35.1 million during the first quarter compared with $36.1 million reported in the previous quarter. Free cash flow was $30 million, compared with $32.7 million reported in the prior quarter.
Guidance
For the second quarter, the company expects revenues in the range of $182-$184 million, representing year-over-year growth of 25-26%. The Zacks Consensus Estimate for revenues is currently pegged at $184.06 million. Collections are projected to be in the range of $197-$199 million, suggesting growth in the range of 23-24% in the year-ago quarter.
The company updated fiscal 2019 guidance. Management now anticipates revenues in the range of $758-$763 million, up from prior guided range of $755-$761million. This indicates an improvement of 26% from the year-ago reported figure. The Zacks Consensus Estimate for revenues is currently pegged at $759.8 million.
Collections are projected to be in the range of $822-$830 million, suggesting growth of 25-26% from the prior-year quarter, compared with previous predicted range of $817-$827 million.
However, the company expects free cash in the range of $122-$126 million, indicating an improvement of 20-24% from the year-ago quarter, down from prior guided range of $135-$140 million.
Zacks Rank and Other Key Picks
Wix carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks worth considering in the broader sector, include Cadence Design Systems (CDNS - Free Report) , Verint Systems Inc. (VRNT - Free Report) and j2 Global, Inc. , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Cadence, Verint and j2 Global is pegged at 12%, 11% and 8%, respectively.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.
Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” -- and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>