Israeli cloud-based web services SaaS company Wix.com (Nasdaq: Wix) has reported strong financial results for the second quarter of 2021 but has provided tepid guidance for the third quarter and lowered its forecast for 2021 revenue due to the uncertainty caused by the resurgent Covid pandemic.
The company's share price is down 15% in trading on Wall Street at $220.60, giving a market cap of $12.4 billion, after the share price fell 3.86% yesterday.
Second quarter revenue totaled $316 million, up 34% from the corresponding quarter of 2020 and second quarter collections totaled $343 million, up 29% from the corresponding quarter of 2020. GAAP net profit in the second quarter of 2021 was $38 million, or $0.66 per share and Non-GAAP net loss in the second quarter of 2021 was $15.8 million, or $0.28 per share
Wix, headed by cofounder and CEO Avishai Abrahami, cut its 2021 revenue forecast 2% to $1.255-1.270 billion, although this would still represent 27%-28% revenue growth over 2020. Wix sees overall collections of $1.4-1.435 billion, down from its previous forecast of $1.44-1.46 billion, which would be 27%-30% higher than 2020. The company now sees free cash flow of $35-40 million, down from $62-72 million.
Wix CFO Lior Shemesh said, "We are adjusting our expectations for the remainder of this year to account for continued uncertainty around the pandemic as well as the timing of B2B partnership agreements. Our ambitions have not changed, and we remain well-positioned to become the primary online platform for all users and businesses."
Wix has 5,500 employees and is hiring both in Israel and abroad. Shemesh said that finding talented employees in Israel is becoming more difficult. "A lot of money is coming into the country and there have been many IPOs and that's amazing, and a lot of companies are in more advanced and mature stages, so obviously that adds competition for employees."
Shemesh added that there are no changes to Wix's plans to build a new headquarters in Tel Aviv. "At the moment we are encouraging people to work from home but that will end at some stage, and people will want to be together. I think that people who come to the office are much happier. Will the pattern of work change in the future? Maybe, but most people will still prefer to come to work." Abrahami said, "As our users and the world are navigating a great deal of uncertainty, it is more essential than ever that we remain focused on our north star goal of becoming the main engine of the internet, democratizing access and providing a place for the majority of people to build their online presence.
Published by Globes, Israel business news - en.globes.co.il - on August 11, 2021
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