Wix.com Ltd. (Nasdaq: WIX) predicts further double-digit growth in revenue and collections, after reporting strong growth in 2013 in its first financial report as a public company. It also forsees that its losses will continue in 2014, after heavier than expected losses in 2013, because of heavy expenditure to increase its market share and widen its technology edge over its rivals.
Full year revenue rose 84% to $80.5 million from $43.7 million and collections rose 88% to $98.7 million from $52.5 million. GAAP-based net loss almost doubled to $28.7 million ($3.33 per share) in 2013 from $15 million in 2012, and non-GAAP net loss rose to $21 million ($2.64 per share) from $13.7 million. Free cash flow was $1.2 million in 2013 compared with an outflow of $4.6 million in 2012.
Fourth quarter revenue rose 88% to $24.9 million from $13.3 million for the corresponding quarter of 2012, and collections rose 82% to $30.6 million from $16.8 million. GAAP-based net loss rose to $10.9 million ($0.45 per share) for the fourth quarter from $3.4 million for the corresponding quarter, and non-GAAP loss rose to $7 million ($0.29 per share) from $3 million.
In its full-year guidance, Wix predicts 58-62% revenue growth to $127-130 million and collections growth of 47-52% to $145-150 million, and a non-GAAP earnings before interest, taxes, depreciation and amortization (EBITDA) loss of $38-42 million. For the first quarter, it forecasts 68-74% revenue growth to $26-27 million, and collections growth of 68-73% to $33-34 million, with a non-GAAP EBITDA loss of $13-14 million.
"Profits are not in our plan for 2014," Wix CFO Lior Shemesh told "Globes". "You have to understand our model. In 2013, our adjusted EBITDA was $18.2 million, but our free cash flow was $1 million. The difference between annual revenue and collections is $18.2 million. This is real money entering our bank account, but not recognized as revenue because these are annual subscriptions the revenue of which recognized over the year. I invest heavily in marketing, and collections mean more in this case because current revenue represents marketing expenses from 6-12 months earlier. At some point, this will reverse and revenue will get closer to collections."
Shemesh adds, "It's wrong to focus on profitability at the moment. I can reduce marketing expenses and be super profitable, but the goal is to invest heavily and gain market share in order to become a much bigger company than at present. The profits will come, and they will be huge."
Wix had 42.1 million registered users at the end of 2013, 49% more than a year earlier, including 790,000 premium subscriptions.
Shemesh says, "2013 was a year of growth, and as time passes, we realized that we were growing faster than we had thought. Including the resources we raised in the IPO, this is a good basis for starting 2014."
Wix used the strong primary market to raise $94 million in in IPO in November 2013. Its share price has subsequently risen 80% to $29.77 at Tuesday's closing, giving a market cap of $1.1 billion. Following the IPO, it had $101 million in cash at the end the year.
Published by Globes [online], Israel business news - www.globes-online.com - on February 12, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014