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Why Is Wix.com (WIX) Down 18.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Wix.com (WIX - Free Report) . Shares have lost about 18.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Wix.com due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Wix's Q1 Loss Wider Than Expected, Revenues Increase Y/Y
Wix.com Ltd reported a non-GAAP loss of 72 cents per share in first-quarter 2022, wider than the Zacks Consensus Estimate of a loss of 64 cents per share.However, the figure was wider than the year-ago quarter's 56 cents per share loss.
Total revenues increased 14% year over year to $342 million and beat the consensus mark of $340.1 million. On a constant currency basis, total revenues were $343.2 million, up 14% year over year. As of Mar 31, 2022, registered users were 228 million.
Quarter in Detail
Creative Subscriptions revenues (74.6% of revenues) increased 13% year over year to $255 million. Business Solutions revenues (25.4% of revenues) rose 17% to $86.6 million.
In the first quarter, Creative Subscriptions Annualized Recurring Revenues were $1.04 billion, up 12% year over year.
Bookings were $393.2 million, up 12% year over year. Creative Subscriptions increased 12% year over year to $299.8 million. Business Solutions rose 13% to $93.5 million.
Region-wise, North America, Europe, Asia and others and Latin America contributed 58%, 26%, 12% and 4% to first-quarter revenues, respectively. Revenues from North America, Europe, Asia and others and Latin America increased 15%, 14%, 14% and 3% year over year, respectively.
Operating Details
Non-GAAP gross margin contracted 100 basis points (bps) to 62%.
Non-GAAP research and development expenses, as a percentage of revenues, expanded 300 bps year over year to 26%. Non-GAAP selling and marketing expenses were 43%, contracting 200 bps year over year.
Wix reported a non-GAAP operating loss of $51 million compared with a non-GAAP operating loss of $37.6 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2022, Wix's cash and cash equivalents stood at $1.5 billion.
As of Mar 31, 2022, long-term debt was reported at $924 million compared with $923 million as of Dec 31, 2021.
Cash flow used from operations amounted to $13.7 million in the first quarter compared with cash flow from the operation of $21 million in the previous quarter.
Capital expenditures totaled $19.9 million in the reported quarter. Free cash outflow was $33.6 million.
Guidance
For second-quarter 2022, revenues are expected between $342 million and $346 million, suggesting 8-10% growth from the prior-year quarter's reported figure. The guidance includes the negative impact of the cessation of operations in Ukraine ($0.6 million) and foreign exchange headwinds ($4 million). Excluding these factors, guidance for revenue growth for the quarter would likely have been 10-11% year over year, noted WIX.
For full year, the revenues are expected to increase in a range of 10-13% on a year over year basis, given no further deterioration in the macro environment. The guidance includes the negative impact of the cessation of operations in Ukraine ($3 million) and foreign exchange headwinds ($20 million). Excluding these factors, guidance for revenue growth for the quarter would likely have been 12-15% year over year, noted WIX.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -5.3% due to these changes.
VGM Scores
At this time, Wix.com has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Wix.com has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Wix.com (WIX) Down 18.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Wix.com (WIX - Free Report) . Shares have lost about 18.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Wix.com due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Wix's Q1 Loss Wider Than Expected, Revenues Increase Y/Y
Wix.com Ltd reported a non-GAAP loss of 72 cents per share in first-quarter 2022, wider than the Zacks Consensus Estimate of a loss of 64 cents per share.However, the figure was wider than the year-ago quarter's 56 cents per share loss.
Total revenues increased 14% year over year to $342 million and beat the consensus mark of $340.1 million. On a constant currency basis, total revenues were $343.2 million, up 14% year over year. As of Mar 31, 2022, registered users were 228 million.
Quarter in Detail
Creative Subscriptions revenues (74.6% of revenues) increased 13% year over year to $255 million. Business Solutions revenues (25.4% of revenues) rose 17% to $86.6 million.
In the first quarter, Creative Subscriptions Annualized Recurring Revenues were $1.04 billion, up 12% year over year.
Bookings were $393.2 million, up 12% year over year. Creative Subscriptions increased 12% year over year to $299.8 million. Business Solutions rose 13% to $93.5 million.
Region-wise, North America, Europe, Asia and others and Latin America contributed 58%, 26%, 12% and 4% to first-quarter revenues, respectively. Revenues from North America, Europe, Asia and others and Latin America increased 15%, 14%, 14% and 3% year over year, respectively.
Operating Details
Non-GAAP gross margin contracted 100 basis points (bps) to 62%.
Non-GAAP research and development expenses, as a percentage of revenues, expanded 300 bps year over year to 26%. Non-GAAP selling and marketing expenses were 43%, contracting 200 bps year over year.
Wix reported a non-GAAP operating loss of $51 million compared with a non-GAAP operating loss of $37.6 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2022, Wix's cash and cash equivalents stood at $1.5 billion.
As of Mar 31, 2022, long-term debt was reported at $924 million compared with $923 million as of Dec 31, 2021.
Cash flow used from operations amounted to $13.7 million in the first quarter compared with cash flow from the operation of $21 million in the previous quarter.
Capital expenditures totaled $19.9 million in the reported quarter. Free cash outflow was $33.6 million.
Guidance
For second-quarter 2022, revenues are expected between $342 million and $346 million, suggesting 8-10% growth from the prior-year quarter's reported figure. The guidance includes the negative impact of the cessation of operations in Ukraine ($0.6 million) and foreign exchange headwinds ($4 million). Excluding these factors, guidance for revenue growth for the quarter would likely have been 10-11% year over year, noted WIX.
For full year, the revenues are expected to increase in a range of 10-13% on a year over year basis, given no further deterioration in the macro environment. The guidance includes the negative impact of the cessation of operations in Ukraine ($3 million) and foreign exchange headwinds ($20 million). Excluding these factors, guidance for revenue growth for the quarter would likely have been 12-15% year over year, noted WIX.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -5.3% due to these changes.
VGM Scores
At this time, Wix.com has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Wix.com has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.