Wix.com (WIX 1.78%), a leading cloud-based platform for building websites, demonstrated more strong momentum in its second quarter. The company's top line sustained its strong 27% year-over-year growth rate while free cash flow continued its sharp growth.
Here's a look at the quarter's results.
Image source: Wix.com.
Wix second-quarter results: The raw numbers
|
Metric |
Q2 2019 |
Q2 2018 |
Change |
|---|---|---|---|
|
Revenue |
$184.4 million |
$146.1 million |
27% |
|
Free cash flow |
$30.8 million |
$23.9 million |
29% |
|
Non-GAAP earnings per share |
$0.34 |
$0.29 |
17% |
GAAP = generally accepted accounting principles. Data source: Wix.com second-quarter earnings release.
What happened with Wix this quarter?
Wix's revenue increased 27% year over year to $185.4 million. Showing how the website-building specialist is sustaining its momentum, this growth rate is in line with the 27% increase in revenue it saw in its first quarter.
Revenue was fueled by more growth in premium subscriptions, which increased by 132,00 sequentially to 4.3 million. On a year-over-year basis, premium subscriptions were up 17%. The company also noted that increasing adoption of complementary products, such as Wix Payments and Ascend by Wix, helped drive revenue.
Free cash flow saw outsize growth, increasing 29% year over year. This captured the scalability of the company's business, as "[e]fficient marketing continues to drive leverage in the model," management said in the second-quarter earnings release.
What management had to say
"These results validate the increasing value we provide to our evolving user base," said Wix CEO Avishai Abrahami about the quarter. "We have made tremendous progress with multiple new initiatives, and I believe these will drive growth in the second half of this year and beyond."
One example of Wix's progress on a recently launched initiative is user adoption of Ascend by Wix. This suite of business tools was launched in December of last year, and includes customer relationship management and marketing tools for businesses. More than 500,000 premium users have used at least one component of the product within the last 30 days, the company said, and management believes this illustrates Ascend by Wix's "enormous market potential."
"Our results continue to show the strength of our financial model and our ability to drive profitable growth, which we believe will continue through this year and for many years to come," added Wix CFO Lior Shemesh.
Looking forward
Management raised its outlook for the full year of 2019, guiding for revenue during the period to rise 26% to 27% year over year, to between $761 million and $765 million. Previously, management expected revenue to be between $758 million and $763 million during the period. Wix also increased the low end of its guidance range for free cash flow, now forecasting the key profitability metric to be between $123 million and $126 million -- up from a previous estimate for $122 million to $126 million.
For the third quarter of 2019, management expects revenue to rise 26% to 27% year over year, to between $196 million and $198 million.
