The company's market cap has risen 83% to $4.9 billion this year.
Internet company Wix.com Ltd. (Nasdaq: WIX) followed its strong first quarter by again outstripping the market's expectations in the second quarter and raising its guidance for the year as a whole. The company now projects annual revenue of $597-599 million, compared with its previous guidance of $594-597 million. The new projection is 40% higher than 2017 and shows that the company expects the second half of 2018 to be even better than the first half, in which its revenue was 44.8% more than in the corresponding period last year.
Wix projects $656-660 million in collections this year (the figure includes deferred revenue), 36% more than in 2017, and $101-103 million in free cash flow, 43-46% more than last year. The company projects $152-153 million in revenue in the third quarter, the same as forecast by the market.
Wix, managed by cofounder and CEO Avishai Abrahami, provides a platform for establishing and managing websites. The company's market cap is $4.9 billion, following an 83% rise in its share price this year. The company had 3.7 million premium subscribers at the end of the second quarter after adding 205,000 more during the quarter, making a total of 131 million subscribers.
Wix's revenue totaled $146 million in the second quarter, 41.2% more than in the corresponding quarter last year. According to GAAP accounting standards, the company's net loss was $5.6 million, down from a $14.3 million loss in the second quarter of 2017 and a $19.8 million loss in the first quarter this year.
On a non-GAAP basis excluding capital remuneration for employees, write-downs of intangible assets, and expenses relating to acquisitions, Wix reported a $13.8 million net profit, $0.29 per share, substantially higher than the analysts' expectations, compared with a $185,000 net loss in the corresponding quarter last year and a $2.1 million loss in the preceding quarter.
Revenue totaled $284 million in the first half of 2018, with an $11.7 million non-GAAP net profit.
Wix generated $27.3 million from current activity in the second quarter with a $23.9 million free cash flow. The company recently completed a $443 million issue of convertible bonds at 0% interest, mostly in the second quarter. Wix had $637 million in cash and investments as of the end of the second quarter.
"We had a good quarter with continued momentum in our business," Wix CFO Lior Shemesh said today. "There were no special surprises. We outperformed the guidance we gave and had a record quarter in the amount of cash we generated. The new products, such as Wix Code, are contributing, although their contribution is still small, because this is only the beginning. We hope that the large market being opened to us will contribute to our continued growth in the coming years."
"Globes": You gave guidance, outperformed it, and you are raising your guidance for the year again. Maybe your guidance is too conservative.
Shemesh: "No. When I build a model for guidance, I don't take a chance. I look at what exists now or the rate of conversion from free to paying customers. What is happening and should happen is that new products are improving these aspects, but I don't give guidance on the basis of something I don't know for sure."
"Globes": Have new acquisitions opportunities appeared since the bond issue?
Shemesh: "The issue was very successful, but there's no change in our strategy. We're still examining companies with interesting technologies, but not strategic investments. Our focus is more on our products. The money raised gives us the ability to be flexible if we need it."