Israeli cloud-based web services SaaS company Wix.com Ltd. (Nasdaq: WIX) has reported strong financial results for the third quarter of 2021, with higher revenue and a narrower loss than the analysts' consensus. In GAAP terms the company was profitable for the second consecutive quarter because of its investment in work operating system company monday.com (Nasdaq: MNDY), which held its IPO in June.
Wix also raised its guidance for the year after reducing it last quarter because of market uncertainty. On the other hand the forecast for free cash flow was again reduced due to increased investment in the market for future growth and to some degree the weakness of the dollar against the shekel.
Wix share price is up 5.02% in pre-market trading at $208.17, giving a market cap of $11.85 billion.
Wix, which was founded by CEO Avishai Avrahami, provides a platform for small and medium sized businesses to set up and manage websites. Revenue in the third quarter was $321 million, up 26.2% from the corresponding quarter of 2020. Selling some of its holdings and revaluing the balance in monday.com produced net revenue of $112 million and led to GAAP net profit of $16.7 million. Non-GAAP net loss, without the monday.com share sell and capital remuneration for employees, was $11.9 million and earnings per share of $0.21. The analysts' consensus was double the loss.
Wix raised its revenue guidance for 2021 to $1.265-1.274 billion, up 28%-29% from 2020.
Abrahami said, "Our business outperformed our expectations this quarter as we saw improvements in the business environment. Our users are still navigating a great deal of uncertainty, but we believe the impacts have lessened. Despite this volatility, we delivered outstanding results. We continue to layer on new monetization opportunities, and I have never been more excited about what we have coming down the pipeline."
Wix President and COO Nir Zohar added, "This quarter we recorded collections from several new B2B partnerships, most notably the technology alliance with Vistaprint that we announced in August. Companies like Vistaprint are approaching us because they know that our brand and technology platform can bring massive value to their users." We believe these B2B partnerships will deliver sustainable growth over many years to come due to the ongoing financial benefits of renewals, additional new subscriptions above and beyond the agreement, and business solutions such as Ascend or Wix Payments."
Wix CFO Lior Shemesh said, "Outperformance this quarter was driven by better than expected new user additions, conversion of new users to subscriptions and average collections per subscription. We are increasing our revenue and collections guidance for FY 2021 to reflect the improvements we are experiencing."
Published by Globes, Israel business news - en.globes.co.il - on November 11, 2021.
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