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Why Is Wix.com (WIX) Up 4.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for Wix.com (WIX - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Wix.com due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
WIX Q4 Earnings & Revenues Beat Estimates
Wix reported non-GAAP earnings of 61 cents per share for fourth-quarter 2022, exceeding the Zacks Consensus Estimate of 8 cents. The company had incurred a loss of 34 cents per share in the previous-year quarter.
Total revenues increased 6% year over year to $355 million and beat the Zacks Consensus Estimate of $351.7 million. On a constant-currency basis, total revenues were $361.4 million, up 8% year over year.
At the end of 2022, registered users were 243 million, up 10% year over year.
Quarter in Detail
Creative Subscriptions’ revenues (74.7% of total revenues) increased 8% year over year to $265.3 million. Business Solutions’ revenues (25.3% of total revenues) rose 3% to $89.8 million.
In fourth-quarter 2022, Creative Subscriptions’ annualized recurring revenues were $1.08 billion, up 7% year over year.
Bookings were $371.8 million, up 6% year over year. Creative Subscriptions’ bookings increased 7% year over year to $281.8 million. Business Solutions’ bookings rose 3% to $90 million.
Region-wise, North America, Europe, Asia and others, and Latin America contributed 59%, 26%, 11% and 4% to fourth-quarter 2022 revenues, up 10%, 8%, 2% and 2% year over year, respectively.
Operating Details
Non-GAAP gross margin expanded 330 basis points to 65%, driven by cost reduction plans.
Non-GAAP research and development expenses, as a percentage of revenues, were 25% compared with 26% reported in the previous-year quarter. Non-GAAP selling and marketing expenses were 25% compared with 35% reported in the previous-year quarter. This was driven by lowering acquisition-marketing investment.
Wix reported a non-GAAP operating income of $30.7 million against a non-GAAP operating loss of $22.2 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2022, Wix had cash and cash equivalents of $1.3 billion. Long-term debt was $567 million compared with $566 million as of Sep 30, 2022.
Cash flow provided from operations amounted to $53.2 million compared with $21 million in the year-ago quarter.
Capital expenditures totaled $14.6 million. Free cash outflow was $38.6 million.
Guidance
For first-quarter 2023, revenues are expected to be between $367 million and $371 million, suggesting 7-9% growth from the prior-year quarter's reported figure.
The company now expects 2023 revenues to grow 9-11% and be in the range of $1,510-$1,535 million. Wix expects new cost cutting measures to generate an additional $50 million of savings in 2023.
For 2023, Wix expects free cash flow (excluding HQ capital expenditure) to be in the range of $152-$162 million, representing 10-11% of revenues.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 27.71% due to these changes.
VGM Scores
At this time, Wix.com has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Wix.com has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Wix.com (WIX) Up 4.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Wix.com (WIX - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Wix.com due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
WIX Q4 Earnings & Revenues Beat Estimates
Wix reported non-GAAP earnings of 61 cents per share for fourth-quarter 2022, exceeding the Zacks Consensus Estimate of 8 cents. The company had incurred a loss of 34 cents per share in the previous-year quarter.
Total revenues increased 6% year over year to $355 million and beat the Zacks Consensus Estimate of $351.7 million. On a constant-currency basis, total revenues were $361.4 million, up 8% year over year.
At the end of 2022, registered users were 243 million, up 10% year over year.
Quarter in Detail
Creative Subscriptions’ revenues (74.7% of total revenues) increased 8% year over year to $265.3 million. Business Solutions’ revenues (25.3% of total revenues) rose 3% to $89.8 million.
In fourth-quarter 2022, Creative Subscriptions’ annualized recurring revenues were $1.08 billion, up 7% year over year.
Bookings were $371.8 million, up 6% year over year. Creative Subscriptions’ bookings increased 7% year over year to $281.8 million. Business Solutions’ bookings rose 3% to $90 million.
Region-wise, North America, Europe, Asia and others, and Latin America contributed 59%, 26%, 11% and 4% to fourth-quarter 2022 revenues, up 10%, 8%, 2% and 2% year over year, respectively.
Operating Details
Non-GAAP gross margin expanded 330 basis points to 65%, driven by cost reduction plans.
Non-GAAP research and development expenses, as a percentage of revenues, were 25% compared with 26% reported in the previous-year quarter. Non-GAAP selling and marketing expenses were 25% compared with 35% reported in the previous-year quarter. This was driven by lowering acquisition-marketing investment.
Wix reported a non-GAAP operating income of $30.7 million against a non-GAAP operating loss of $22.2 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Dec 31, 2022, Wix had cash and cash equivalents of $1.3 billion. Long-term debt was $567 million compared with $566 million as of Sep 30, 2022.
Cash flow provided from operations amounted to $53.2 million compared with $21 million in the year-ago quarter.
Capital expenditures totaled $14.6 million. Free cash outflow was $38.6 million.
Guidance
For first-quarter 2023, revenues are expected to be between $367 million and $371 million, suggesting 7-9% growth from the prior-year quarter's reported figure.
The company now expects 2023 revenues to grow 9-11% and be in the range of $1,510-$1,535 million. Wix expects new cost cutting measures to generate an additional $50 million of savings in 2023.
For 2023, Wix expects free cash flow (excluding HQ capital expenditure) to be in the range of $152-$162 million, representing 10-11% of revenues.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 27.71% due to these changes.
VGM Scores
At this time, Wix.com has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Wix.com has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.