Website creator Wix raises 2023 estimates after large Q2 beat

Wix.com (WIX.O), which helps small businesses build and operate websites, swung to a net profit in the second quarter that was more than double forecasts and raised estimates for 2023.

The Israeli company said last week that it had earned $1.38 per share excluding one-time items in the April to June period, compared with a loss of 14 cents per share a year earlier. Revenue grew 13 per cent to $390 million.

Wix was forecast to earn 60 cents excluding one-time items on revenue of $383 million, according to Refinitiv I/B/E/S data.

“We see kind of a modest recovery in the market. We see more people buying online,” Chief Financial Officer Lior Shemesh told a news conference. “And we are taking a lot of market share as part of our (various) partners’ businesses.”

Wix projected third-quarter revenue of $386 million to $391 million, representing annual growth of up to 13 per cent. It also raised its full-year 2023 revenue estimate to $1.543 billion to $1.558 billion – 11-12 per cent growth – from $1.522 billion to $1.543 billion.

“The adoption of our platforms is increasing,” Shemesh said. “Due to that, we feel very comfortable in increasing the guidance for revenue. And obviously that drives more profitability.”

He added that the company is also becoming more efficient.

Wix’s Nasdaq-listed shares were up 12 per cent to $99.30 in pre-market trading. Through Wednesday, they had risen 15.2 per cent so far in 2023.

Its president Nir Zohar said he was concerned at how the Israeli government’s plan to limit the Supreme Court’s powers was impacting the country, through a steep drop in investment along with a polarisation of citizens and mass protests.

“I do have a concern that (if) over time instability continues, we may get to a point where some… public investors raise the risk factor, the risk profile on Israel, and that will affect the different Israeli public companies,” he said.

Zohar rejected the notion of moving the firm’s domicile to Delaware from Israel, saying such a move would be a last resort. “We’re proud of being an Israeli company,” he said.