Wix.com beats 4Q estimates, expects strong 2017

Wix.com, an Israel-based company that helps small businesses build and operate websites, forecast higher-than-expected revenue in 2017 after fourth-quarter revenue and earnings topped estimates.

The company had swung to a quarterly profit of 6 cents a share excluding one-time items, its first ever profit, from a 13 cent loss a year earlier, it said on Wednesday. Revenue grew 48% to $84.2 million as the number of paid subscribers jumped 39%.

It had been forecast to earn 3 cents a share excluding items on revenue of $81.65m., according to Thomson Reuters I/B/E/S.

Wix offers free basic features for setting up websites, but users must pay for extra services, such as shopping carts, individual Web addresses and site traffic analysis.

During the quarter it added five million registered users for a total of 97 million. Of that, it added 171,000 paid subscribers to reach 2.5 million.

The number of registered users surpassed 100 million this month, Wix said.

“As we improve our product and add functionality, there are more chances that a wider distribution of people will be able to finish a website,” Wix president Nir Zohar told Reuters.

In June, the company launched technology called Artificial Design Intelligence to make its product easier to use.

Zohar also attributed the jump in paid subscribers to Wix’s focus on products for specific users, such as photographers, musicians and event planners.

Wix, whose customers have also created over 22 million mobile sites, projected 2017 revenue of between $409m. and $411m., up between 41% and 42% from 2016. Analysts had on average forecast revenue of $383m.

The company expects to spend about $180m. on marketing this year, including its Super Bowl campaign, chief financial officer Lior Shemesh said.

Wix’s Web traffic and name recognition have grown substantially since its first Super Bowl marketing campaign three years ago, Zohar said.

Half of the company’s income is generated outside the United States, and Shemesh said Wix hopes to penetrate further into the Asia-Pacific market.

For the first quarter, it expects revenue of between $89m. and $90m., up 45% to 46%. (Reuters)