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WIX's Q3 Earnings & Revenues Top Estimates, Increase Y/Y
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Wix.com Ltd (WIX - Free Report) reported non-GAAP earnings of 6 cents per share for third-quarter 2022 in contrast to the Zacks Consensus Estimate of a loss of 7 cents per share. The company had incurred a loss of 21 cents per share in the previous-year quarter.
Total revenues increased 8% year over year to $345.8 million and beat the consensus mark of $343.2 million. On a constant-currency basis, total revenues were $350.8 million, up 10% year over year.
As of Sep 30, registered users were 238 million.
Quarter in Detail
Creative Subscriptions’ revenues (75.5% of revenues) increased 8% year over year to $261.1 million. Business Solutions’ revenues (24.5% of revenues) rose 8% to $84.7 million.
In the third quarter, Creative Subscriptions’ annualized recurring revenues were $1.07 billion, up 8% year over year.
Bookings were $352.5 million, down 6% year over year. This was due to a tough year-over-year comparison as the previous-year quarter included the company’s largest B2B booking. Creative Subscriptions’ bookings decreased 8% year over year to $269.9 million. Business Solutions’ bookings rose 2% to $82.5 million.
Region-wise, North America, Europe, Asia and others; and Latin America contributed 59%, 26%, 11% and 4% to third-quarter revenues, respectively. Revenues from North America, Europe, Asia and others; and Latin America increased 11%, 10%, 5% and 1% year over year, respectively.
Operating Details
Non-GAAP gross margin expanded 200 basis points (bps) to 65% driven by cost reduction plans.
Non-GAAP research and development expenses, as a percentage of revenues, were 26% compared with 25% reported in the previous-year quarter. Non-GAAP selling and marketing expenses were 31%, contracting 300 bps year over year.
Wix reported a non-GAAP operating loss of $3.2 million compared with a non-GAAP operating loss of $11.3 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, Wix's cash and cash equivalents stood at $1.5 billion.
As of Sep 30, long-term debt was reported at $566 million compared with $565 million as of Jun 30.
Cash flow provided from operations amounted to $0.3 million in the third quarter compared with cash flow from operations of $2.7 million in the previous quarter.
Capital expenditures totaled $22.9 million in the reported quarter. Free cash outflow was $22.6 million.
Guidance
For fourth-quarter 2022, revenues are expected to be between $349 million and $354 million, suggesting 5-6% growth from the prior-year quarter's reported figure. The Zacks Consensus Estimate for the same is pegged at $350.3 million.
For the current quarter, Wix expects to generate non-GAAP operating income and free cash flow (excluding HQ capital expenditure) to “meaningfully ramp up “to $47-$50 million.
Owing to stronger-than-expected unfavorable forex impact, the company now expects 2022 revenues to grow 9% compared with the earlier guided range of 8% to 10% year over year.
For 2022, Wix expects free cash flow (excluding HQ capital expenditure) to be 2% of revenues within the earlier guided range of 2-3% of revenues.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.33 per share, up 7.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have decreased 5.7% in the past year.
The Zacks Consensus Estimate for Pure Storage 2022 earnings is pegged at $1.18 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have increased 4.5% in the past year.
The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 3.8 in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have decreased 3.2% in the past year.
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WIX's Q3 Earnings & Revenues Top Estimates, Increase Y/Y
Wix.com Ltd (WIX - Free Report) reported non-GAAP earnings of 6 cents per share for third-quarter 2022 in contrast to the Zacks Consensus Estimate of a loss of 7 cents per share. The company had incurred a loss of 21 cents per share in the previous-year quarter.
Total revenues increased 8% year over year to $345.8 million and beat the consensus mark of $343.2 million. On a constant-currency basis, total revenues were $350.8 million, up 10% year over year.
As of Sep 30, registered users were 238 million.
Quarter in Detail
Creative Subscriptions’ revenues (75.5% of revenues) increased 8% year over year to $261.1 million. Business Solutions’ revenues (24.5% of revenues) rose 8% to $84.7 million.
Wix.com Ltd. Price, Consensus and EPS Surprise
Wix.com Ltd. price-consensus-eps-surprise-chart | Wix.com Ltd. Quote
In the third quarter, Creative Subscriptions’ annualized recurring revenues were $1.07 billion, up 8% year over year.
Bookings were $352.5 million, down 6% year over year. This was due to a tough year-over-year comparison as the previous-year quarter included the company’s largest B2B booking. Creative Subscriptions’ bookings decreased 8% year over year to $269.9 million. Business Solutions’ bookings rose 2% to $82.5 million.
Region-wise, North America, Europe, Asia and others; and Latin America contributed 59%, 26%, 11% and 4% to third-quarter revenues, respectively. Revenues from North America, Europe, Asia and others; and Latin America increased 11%, 10%, 5% and 1% year over year, respectively.
Operating Details
Non-GAAP gross margin expanded 200 basis points (bps) to 65% driven by cost reduction plans.
Non-GAAP research and development expenses, as a percentage of revenues, were 26% compared with 25% reported in the previous-year quarter. Non-GAAP selling and marketing expenses were 31%, contracting 300 bps year over year.
Wix reported a non-GAAP operating loss of $3.2 million compared with a non-GAAP operating loss of $11.3 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Sep 30, Wix's cash and cash equivalents stood at $1.5 billion.
As of Sep 30, long-term debt was reported at $566 million compared with $565 million as of Jun 30.
Cash flow provided from operations amounted to $0.3 million in the third quarter compared with cash flow from operations of $2.7 million in the previous quarter.
Capital expenditures totaled $22.9 million in the reported quarter. Free cash outflow was $22.6 million.
Guidance
For fourth-quarter 2022, revenues are expected to be between $349 million and $354 million, suggesting 5-6% growth from the prior-year quarter's reported figure. The Zacks Consensus Estimate for the same is pegged at $350.3 million.
For the current quarter, Wix expects to generate non-GAAP operating income and free cash flow (excluding HQ capital expenditure) to “meaningfully ramp up “to $47-$50 million.
Owing to stronger-than-expected unfavorable forex impact, the company now expects 2022 revenues to grow 9% compared with the earlier guided range of 8% to 10% year over year.
For 2022, Wix expects free cash flow (excluding HQ capital expenditure) to be 2% of revenues within the earlier guided range of 2-3% of revenues.
Zacks Rank & Stocks to Consider
Currently, Wix carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology space are Arista Networks (ANET - Free Report) , Pure Storage (PSTG - Free Report) and Jabil (JBL - Free Report) . Arista Networks and Jabil currently sports a Zacks Rank #1 (Strong Buy), whereas Pure Storage carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.33 per share, up 7.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have decreased 5.7% in the past year.
The Zacks Consensus Estimate for Pure Storage 2022 earnings is pegged at $1.18 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 35.5%.
Pure Storage’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 171.8%. Shares of PSTG have increased 4.5% in the past year.
The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 3.8 in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have decreased 3.2% in the past year.