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A month has gone by since the last earnings report for Wix.com (WIX). Shares have added about 6% 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 catalysts.
Wix.com Q1 Earnings Miss Estimates, Revenues Top
Wix.com Ltd. reported 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.
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.
Consequently, the company reported non-GAAP operating loss of $2.2 million wider than year-ago loss reported at $0.8 million.
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%. 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.
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.