Wix worth nearly $10.5b after share price jumps 21%

Avishai Abrahami and Nir Zohar
Avishai Abrahami and Nir Zohar

Wix president Nir Zohar: Our platform has become something that is not just nice to have but critical for doing business over the Internet.

Israeli DIY website developer platform Wix.com Ltd. (Nasdaq: WIX) enjoyed a record breaking week after publishing strong first quarter 2020 results and expectations of a further increase in revenue in the second quarter. The company's share price rose 21% on Thursday and Friday to a record $201.78, giving a market cap of $10.473 billion.

Wix became Israel's third most valuable company traded on Wall Street after Check Point Software Technologies Ltd. (Nasdaq: CHKP) ($15 billion), and Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) ($12 billion), leapfrogging NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) ($10.4 billion), which itself rose strongly after good second quarter results.

Wix, which was cofounded by CEO Avishai Abrahami, provides DIY website building solutions, mainly to small and medium sized enterprises. The coronavirus and lockdowns in so many countries have boosted Wix's revenue among companies shifting brick and mortar activities online and strengthening their virtual presence.

Wix reported that in April alone more than 3.2 million new users registered with the company, up 63% from April 2019. The company said that at the start of the coronavirus crisis there was a rise in cancellations by existing users but them the trend reversed itself and there was a 207% rise in premium users in April compared with April 2019.

April's results will be part of the second quarter in which Wix expects revenue of $231-233 million, up 25-26% from 2019, and above the analysts's expectations. Billings in the second quarter will total $255-260 million, up 28-30% from the second quarter of 2019 and free cash flow will reach $41-43 million, growth of 33-40%.

Despite the positive results, Wix refrained from providing annual guidance. Wix president and COO Nir Zohar told "Globes," "There are too many variables at the moment, so that makes us feel it is too difficult to give a clear forecast."

He added, "For example, there are countries still in a major lockdown and it is not known how long it will last and what will be the influence of the economic crisis on the practices of small business owners and if there will be another outbreak, and so on. Although in our case, the influence has been positive and that is gladdening, but we don't want to simply throw out numbers."

Zohar continued, "This crisis has strengthened us as did the financial crisis in 2008-2009, which gave us a boost. That's not the place from which we wanted to grow, but when we observe what our users are doing, the veterans and the many new ones who have joined up, it strengthen us to know that our platform is not just something that is nice to have but something that is critical - the ability to do business over the Internet."

In the first quarter, Wix's revenue was $216.0 million, up 24% from $174.3 million in the first quarter of 2019. GAAP net loss in the first quarter of 2020 was $39.2 million ($0.76 per share), compared with a net loss of $30.7 million ($0.62 per share), for the first quarter of 2019. Non-GAAP net loss in the first quarter of 2020 was $0.4 million ($0.01 per share), compared with non-GAAP net profit of $1.5 million ($0.03 per share) for the first quarter of 2019.

Published by Globes, Israel business news - en.globes.co.il - on May 17, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Avishai Abrahami and Nir Zohar
Avishai Abrahami and Nir Zohar
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