Amazon.com (NASDAQ:AMZN) recently received some criticism from the White House for damaging the retail industry. There is a debatable position for and against that view, but the Amazon retail platform isn't without its fair share of upstart competitors anymore.

A number of e-commerce sites have popped up in response, putting power back into the hands of small businesses and entrepreneurs with powerful digital tools to rival what Amazon can do with its vast scale and resources.

A company helping to create and manage those e-commerce sites is Wix.com (NASDAQ:WIX). Internet users have been flocking to the company's cloud-based website development suite and related services since it started in 2006, and the company has shown solid growth for years. The second quarter of 2019 was no exception, and new product launches are only just beginning to yield more positive results.

Wix at the halfway point of 2019

Wix's revenue and collections (the amount of money made per subscription) were up 27% and 25%, respectively, versus the year-ago second quarter. Both top-line figures exceeded management's guidance given a few months ago.

Operating expenses were up just as much, as the internet company keeps its foot on the gas to promote maximum sales growth -- resulting in a net loss. Making adjustments for noncash expenses, though, Wix was profitable during the quarter; free cash flow (basic profits after subtracting operating and capital expenditures) grew 29% year over year.  

Paired with the first quarter, it all added up to a solid showing at the 2019 halfway point.

Metric

Six Months Ended June 30, 2019

Six Months Ended June 30, 2018

Change

Revenue

$359.8 million

$283.9 million

27%

Collections

$400.0 million

$319.6 million

25%

Operating expenses

$315.3 million

$249.4 million

26%

Adjusted earnings per share (loss)

$0.37

$0.25

48%

Free cash flow

$60.8 million

$45.3 million

34%

Data source: Wix.com.  

Along with a better-than-expected second quarter, Wix also upgraded its expectations for full-year 2019. The revenue forecast was bumped up a few million to a range of $761 million to $765 million (representing growth over 2018 of 25% to 26%), and the bottom end of free cash flow guidance was raised by $1 million to a range of $123 million to $126 million (21% to 24% year-over-year growth). As a result of the upgrade and Wix's historically conservative guidance, the stock jumped. It's now up 65% year to date as of this writing.

A miniature shopping cart full of boxes sitting on top of a laptop.

Image source: Getty Images.

More service, more profits -- later

Wix rolled out a number of new initiatives late in 2018 that are only just beginning to pay off. These include its Logo Maker software, Wix Payments for those with an online store, and the automated business management tool Ascend. Adding new and improved features has helped the company add new premium paid subscribers (up 17% during the quarter) and free user accounts (up 18%). And management expects these metrics will continue to increase for the foreseeable future. With revenue going up more than user count, that implies existing customers are choosing to spend more with Wix over time -- driven primarily by those new website tools.  

New services continue to launch. Offices in Japan were recently opened, giving Wix an expanded presence there. The company also acquired an Israeli-based web design firm to help it cater to larger brands in need of a refreshed internet presence. Wix is also getting in on esports, partnering with video game team FaZe Clan and becoming an official sponsor of its Fortnite professional team.  

There's a lot going on at the website management company, and it's still scooping up large numbers of aspiring internet entrepreneurs. But as is the case with high-flying stocks, buying into Wix should be done a little bit at a time. Shares are valued at a rich 62 times trailing-12-month free cash flow. That pricey valuation can make this stock especially volatile, with fast runs higher matched by steep declines, depending on quarter-to-quarter sales growth figures and estimates.

Nevertheless, Wix and its peers like Shopify -- with their support for small businesses and their own e-commerce ambitions -- are one of my favorite investing themes, since digital retail is expected to post double-digit growth for years to come. Digital selling has been a boon for the last two decades for the heavyweights like Amazon, and now the movement is spreading to the little people -- and Wix looks like one of the best ways for investors to ride the wave.