Wix.com (WIX +0.14%), a leading cloud-based platform for building websites, reported its second-quarter results before market open on Wednesday. Results highlighted Wix's strong momentum, as revenue came in above the company's guidance and management boosted its outlook for the full year.
The quarter was also notable in terms of profitability. Wix reported record free cash flow, and its non-GAAP net income per share increased from $0.00 in the year-ago quarter to $0.29.
The quarter's overall performance was driven by strength across various products and higher user conversion and retention, management said.
Here's what investors should know about the quarter:
A Wix website. Image source: Wix.com.
Wix's second-quarter results: The raw numbers
|
Metric |
Q2 2018 |
Q2 2017 |
Year-Over-Year Growth |
|---|---|---|---|
|
Revenue |
$146.1 million |
$103.5 million |
41% |
|
Free cash flow |
$23.9 million |
$17.4 million |
37% |
|
Non-GAAP EPS |
$0.29 |
$0.00 |
N/A |
Data source: Wix.com second-quarter earnings release. Table by author.
What happened with Wix.com this quarter?
- Wix's $146.1 million in revenue was slightly above management's guidance for revenue between $144 million and $145 million.
- Collections, or the total cash Wix collects from customers in a given period, increased 37% year over year in Q2.
- Wix's free cash flow rose sharply despite higher capital expenditures; capex during the quarter was $3.4 million, up from $2.2 million in the year-ago quarter.
- Wix added 5.8 million registered users during the quarter, bringing total users to 131 million, up 20% year over year.
- Premium subscriptions increased 28% year over year to 3.7 million.
What management had to say
Co-founder and CEO Avishai Abrahami was pleased with the quarter, noting the results were strong and "demonstrate our continued ability to provide users of all kinds who come to Wix with a complete product platform so they can create their dreams online."
Management drew attention to the growing use of Wix Code, where "users across sectors and skill levels are building a wide variety of websites and applications with the product." The Wix Code Forum has garnered more than 35,000 posts and comments, and over 1 million views.
Beyond its second-quarter financial results, Wix.com commented on the company's successful private offering, in which it raised $443 million.
"We also successfully raised $443 million in convertible notes with a 0% coupon," CFO Lior Shemesh said. "This capital raise bolsters our balance sheet and provides us with additional financial flexibility."
Looking forward
For the full year, Wix expects revenue between $597 million and $599 million, up from a previous forecast between $594 million and $597 million. Wix's updated guidance represents year-over-year revenue growth of 40% to 41%. In addition, management expects full-year collections to increase 36% year over year and free cash flow to climb 43% to 46% year over year.
To fully capitalize on the momentum Wix is seeing across its products, management said it plans to "increase penetration of our existing markets and make progress in realizing the benefits of a larger market opportunity" during the second half of the year.
