Wix saw a demand boom as small businesses went digital during the COVID-19 pandemic. Now growth is accelerating as the Web site builder becomes entrenched as a platform do conduct business online and offline.
CEO Avishai Abrahami said on a first quarter earnings conference call:
As the offline world come back into business, I think a lot of them had a chance to think about how what they want to achieve, how they want to grow. A lot of new businesses are being founded as a lot of businesses were closed. And I think this is something that allow us to actually provide really good solutions for those customers. and help them in their recovery or rebuilding of a new business. And because of Wix, again, right, if you look at some of our peers, you see that they are focused a lot about online transaction. But we also support one of the off-line activities, right? So restaurants, events, consultants, right, doctors, there's so many things that we serve that are based a lot on off-line-line activity. And as that segment recovers, right, it's more than composite for the online business says that we're growing really fast during Covid. I think that this is what we're seeing now, and that's why we're feeling confident that what we predicted a year ago about growing faster after Covid is really what is happening now.
Wix's plan now is to be more aggressive and sale and marketing to drive growth in its products such as Editor X.
The comments from Wix echo what GoDaddy has said. The plan for these companies is to provide SMBs Web site building tools and hosting and then expand into other services.
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Lior Shemesh, CFO of Wix, said that subscriptions from existing customers can drive sales of $14.2 billion over the next decade. "Our first quarter 2021 results build on the growth we experienced in 2020 and serve as evidence of the positive returns we are generating from our investments in product development, marketing and support," said Shemesh. "These investments have driven an increase in conversion and collections per subscription, illustrated by the strength of the collections from the Q1 2021 user cohort, which were 32% higher than the Q1 2020 user cohort generated in its first quarter."
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For the first quarter, Wix reported revenue of $304.1 million, up 41% from a year ago. Creative subscriptions revenue was $226.4 million followed by business solutions sales of $77.7 million. Wix reported a first quarter net loss of $121.8 million, or $2.16 a share. Non-GAAP loss in the first quarter was 54 cents a share.
Wall Street was expecting a first quarter non-GAAP loss of 64 cents a share on revenue of $295.2 million.
As for the outlook, Wix said its horizontal platform will continue to see demand as 40% of gross payment volume in the first quarter was from reopening industries such as fitness, restaurants, beauty and events.
Wix projected second quarter revenue of $308 million to $312 million, up 30% to 32% from a year ago. For fiscal 2021, Wix is projecting revenue of $1.28 billion to $1.29 billion. That guidance was higher than its previous outlook. Free cash flow for 2021 will be between $62 million and $72 million.