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Wix.com Earnings: Accelerating Monetization Drives Strong Growth


Wix.com (NASDAQ: WIX) , a leading cloud-based platform for building websites, kept up its strong momentum in its third quarter. Revenue surged 40% year over year, and the company's GAAP loss per share narrowed significantly. In addition, the company raised its outlook for full-year revenue.

As investors look over Wix's third-quarter results, here are some of the key takeaways from the quarter.

Employees at Wix offices

Image source: Wix.com.

Wix's third-quarter results: The raw numbers

Metric

Q3 2018

Q3 2017

Year-Over-Year Growth

Revenue

$155.6 million

$111.0 million

40%

Free cash flow

$23.7 million

$18.9 million

25%

Loss per share

($0.12)

($0.32)

N/A

Data source: Wix.com third-quarter earnings release .

What happened with Wix this quarter?

  • Revenue increased 40% year over year to $155.6 million, beating management's guidance for revenue between $152 million and $153 million.
  • Wix's revenue growth was a slight deceleration from the 41% year-over-year growth the company posted in Q2 .
  • Collections, the total cash Wix collects from customers, increased 36% year over year.
  • Free cash flow importantly rose 25% year over year to $23.7 million.
  • Wix's non-GAAP operating margin surged 376% year over year to an all-time high of $16.3 million.
  • Wix's GAAP loss per share narrowed from a loss of $0.23 in the year-ago quarter to a loss of $0.12.
  • Wix's non-GAAP earnings per share jumped from $0.01 in the year-ago quarter to $0.39.
  • Wix authorized a share repurchase program that allows up to $100 million to be spent repurchasing outstanding shares.

What management had to say

Key to Wix's growth during the company's third quarter was "accelerating monetization," the company said in its third-quarter earnings release. Specifically, average revenue per subscription increased 11% year over year and conversion was also up compared to the year-ago quarter, management noted.

"Our business model is a unique combination of strong top line growth and improving profitability, which was again demonstrated with our third quarter results," said Wix CFO Lior Shemesh in the company's third-quarter earnings release. "These results are also a reflection of the strong returns we continue to realize on our investments in R&D and marketing as well as the consistency and predictability of our business."

Looking forward

Amid this momentum, Wix said it now expects full-year 2018 revenue between $601 million and $602 million, up from a previous forecast for $597 million to $599 million.

Wix CEO Avishai Abrahami said it expects its recent release of new products and features, including Wix Payments, enhancements to Wix Code, Wix Video Maker, and its Deviant Art platform, as well as its plans for "a new product in December that will elevate how small businesses are managed and grow online," to help extend the company's momentum throughout 2019.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Wix.com. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Personal Finance , Stocks
Referenced Symbols: WIX



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