Web firm Wix.com trims outlook on growing COVID uncertainty

[August 11, 2021]  By Steven Scheer

JERUSALEM (Reuters) - Wix.com, which helps small businesses build and operate websites forecast solid growth this year, but slightly lowered its revenue outlook citing greater uncertainty for the second half of 2021 related to the coronavirus pandemic.

Last year, the Israel-based Wix capitalised on a move to online sales, but the Delta variant is driving up infections again despite mass vaccinations, leading to fears of renewed lockdowns that could disrupt business activity around the world.

The company reported on Wednesday a quarterly net loss of 28 cents per share excluding special items, with revenue up 34% at $316 million. Wix reported a 26 cent loss a year ago.

Analysts had forecast a 38 cent loss and $312 million in revenue, according to Refinitiv.

"There is a great amount of uncertainty among our users," finance chief Lior Shemesh told Reuters. He said business owners were "confused" about whether to bolster their online presence. "We saw less traffic for online starting in mid-May."

The Nasdaq-listed company, whose shares have risen about 4% so far in 2021, forecast third quarter revenue of $311-$317 million. Wix lowered its full-year revenue outlook to $1.255- $1.27 billion from $1.28-$1.29 billion, below $1.29 billion expected by analysts, but still targeting revenue growth close to 30% reached in 2020.

"We still see very high conversions to premium, very strong retention and we still see an increase in ARPU (average revenue per user)," Shemesh said, adding that the wider range reflected greater uncertainty about the rest of this year.

"Unfortunately, we thought that this would be higher than that. The uncertainty is quite big."
 

Wix said it could reach the high end of the range with more new users and conversions to subscriptions, while the low end reflected a scenario with fewer new user additions and some planned partnerships failing to close this year.

Wix also said that printing and marketing firm Vistaprint chose Wix to create and management its websites and related products. It offered no financial details, but Shemesh said the deal would add hundreds of thousands of premium subscriptions. Wix reported 5.5 million premium subscriptions at the end of 2020.

(Reporting by Steven Scheer; Additional reporting by Ari Rabinovitch; Editing by Tomasz Janowski)

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