Shares of Wix.com (WIX 3.71%) fell 17% on Wednesday, following the release of the website builder's first-quarter results.
Wix's revenue rose 41% year over year to $304.1 million. The gains were fueled by a 28% increase in creative subscriptions revenue, to $226.4 million, and a 97% surge in business solutions revenue, to $77.7 million.
"Wix is taking a leading role in facilitating the global shift online and changing the way web presences are built," CEO Avishai Abrahami said in a press release. "We strive to be a horizontal platform that offers the best solution for any type of user and any type of business to not only create but also grow and succeed online."
To bolster its revenue growth, Wix spent heavily on marketing, product development, and customer support services. These costs weighed on its profitability. The company generated an adjusted net loss of $30.2 million, or $0.54 per share, in the first quarter.
However, Wix's cash generation remained solid. Its operating and free cash flow came in at $18.5 million and $14.6 million, respectively.
Wix also raised its full-year financial outlook. Management now expects revenue to rise roughly 30% to $1.29 million. "Following the strong start to 2021, we are excited about the remainder of the year ahead," the company said in its earnings release. "As the need for an online presence continues while businesses increasingly require online commerce capabilities, we believe our growth will continue throughout the year."
Yet despite this optimistic forecast, investors appeared to focus on Wix's decision to no longer provide user growth figures. It's a somewhat worrisome move, as management teams sometimes chose to cease disclosing certain metrics when they no longer paint the business in a favorable light. To account for this risk, many investors decided to sell their shares of Wix.com on Wednesday.