TEL AVIV (Reuters) – Wix.com, which helps small businesses build and operate websites, reported higher than expected profit in the second quarter and raised its revenue forecast for 2019 amid solid sales growth from a host of new products.
FILE PHOTO: Employees work at website-designer firm Wix.com offices in Tel Aviv, Israel July 4, 2016. REUTERS/Baz Ratner/
It reported on Wednesday quarterly net profit of 34 cents a share excluding one-time items, compared with 29 cents a year earlier. Revenue grew 27% to $185.4 million.
Wix was forecast to earn 18 cents a share excluding one-offs on revenue of $184 million, according to I/B/E/S data from Refinitiv.
The Israel-based firm offers free basic features for setting up websites but users must pay for extra services such as shopping carts, individual web addresses and site traffic analysis.
It has launched a number of new products to allow companies to manage their businesses, including development tool Corvid, all-in-one business platform Ascend and Wix Payments, which allows firms to manage income.
“We are starting to see a good sign of monetization of these products… that enables us to generate higher growth in the future,” Chief Financial Officer Lior Shemesh told Reuters.
Growth in those products led to Wix raise its 2019 outlook, and the second half is expected to be better than the first, Shemesh said.
“It puts us into a good momentum for next year,” he said, adding the trio of new products “will be our main growth drivers the next couple of years”.
Of Wix’s more than 150 million registered users, 4.5 million pay for subscriptions, with the number of conversions from free to paying up 29% in the last few quarters, Shemesh added.
Wix raised its 2019 revenue forecast to $761-$765 million from a previous forecast of $758-$763 million, up 26-27% from 2018. Analysts were expecting $762 million.
For the third quarter it forecast revenue of $196-$198 million, up 26-27% from a year earlier.
Shemesh said Wix generated cash of $30 million in the quarter, pushing its cash reserves to $850 million. He said the company was not looking for acquisitions for now, preferring to focus on organic growth.
Wix’s shares have jumped 62% this year after a 57% rise in 2018.
Additional reporting by Tova Cohen; Editing by Jan Harvey