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Wix.com (WIX) Down 2.5% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Wix.com (WIX - Free Report) . Shares have lost about 2.5% 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 the most recent earnings report in order to get a better handle on the important catalysts.
WIX Q2 Earnings & Revenues Beat Estimates,
Wix reported non-GAAP diluted earnings per share (EPS) of $1.67 for second-quarter 2024, which exceeded the Zacks Consensus Estimate of $1.32. The company reported EPS of $1.26 in the year-ago quarter.
Total revenues increased 12% year over year to $435.7 million and beat the Zacks Consensus Estimate of $433.6 million.
At the end of June 30, 2024, registered users were 273 million.
Quarter in Detail
Creative Subscriptions’ revenues (71.6% of total revenues) increased 9% year over year to $312.1 million. Business Solutions’ revenues (28.4% of total revenues) rose 20% to $123.6 million.
In the second quarter, Creative Subscriptions annualized recurring revenues were $1.28 billion, up 10% year over year.
Bookings of $458.4 million improved 15% year over year. Creative Subscriptions’ bookings increased 12% year over year to $329 million. Business Solutions’ bookings rose 24% to $129.4 million. Solid uptake of WIX Studio, AI product suite and expanding commerce platform drove the strong bookings performance in the most recent quarter.
The strong growth of Business Solutions bookings and revenues was also aided by the string uptake of business applications, especially Paid Ads and Email Marketing, and an increase in transaction revenues.
Partners revenues in the second quarter were $148.4 million, or 34% of total revenues, up 29% year over year. The increase was driven by market share gains resulting from the onboarding of new agencies and freelancers.
Region-wise, North America, Europe, Asia and others, and Latin America contributed 60%, 25%, 11% and 7%, respectively, to second-quarter 2024 revenues, up 12%, 14%,11% and 7% year over year.
Operating Details
Non-GAAP gross margin was unchanged at 68% year over year. Wix reported a non-GAAP operating income of $90.2 million compared with $68.9 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of June 30, 2024, Wix had cash and cash equivalents of $802.4 million. Long-term debt was $571.3 million compared with $570.5 million as of March 31, 2024.
Cash flow provided from operations amounted to $120 million compared with $47.8 million in the year-ago quarter.
Capital expenditures totaled $7.2 million. Free cash flow was $112.8 million.
Outlook Updated
For third-quarter 2024, revenues are expected to be between $440 million and $445 million, suggesting 12-13% growth from the prior-year quarter's reported figure.
The company anticipates 2024 revenues to grow 12-13% and in the range of $1.747-$1.761 billion.
Non-GAAP operating expenses are expected to be 50% of revenues for 2024 compared with the previous expectation of 50-51% due to the expectation of additional operating leverage.
Wix estimates free cash flow (excluding HQ capital expenditure) in the range of $460-$470 million, representing about 26-27% of revenues, up from $445-$455 million or 26% of revenues. This growth in free cash flow is expected to be primarily driven by continued operating leverage.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Wix.com has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Wix.com has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Wix.com is part of the Zacks Computers - IT Services industry. Over the past month, Check Point Software (CHKP - Free Report) , a stock from the same industry, has gained 4.8%. The company reported its results for the quarter ended June 2024 more than a month ago.
Check Point reported revenues of $627.4 million in the last reported quarter, representing a year-over-year change of +6.6%. EPS of $2.17 for the same period compares with $2 a year ago.
Check Point is expected to post earnings of $2.25 per share for the current quarter, representing a year-over-year change of +8.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Check Point. Also, the stock has a VGM Score of F.
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Wix.com (WIX) Down 2.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Wix.com (WIX - Free Report) . Shares have lost about 2.5% 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 the most recent earnings report in order to get a better handle on the important catalysts.
WIX Q2 Earnings & Revenues Beat Estimates,
Wix reported non-GAAP diluted earnings per share (EPS) of $1.67 for second-quarter 2024, which exceeded the Zacks Consensus Estimate of $1.32. The company reported EPS of $1.26 in the year-ago quarter.
Total revenues increased 12% year over year to $435.7 million and beat the Zacks Consensus Estimate of $433.6 million.
At the end of June 30, 2024, registered users were 273 million.
Quarter in Detail
Creative Subscriptions’ revenues (71.6% of total revenues) increased 9% year over year to $312.1 million. Business Solutions’ revenues (28.4% of total revenues) rose 20% to $123.6 million.
In the second quarter, Creative Subscriptions annualized recurring revenues were $1.28 billion, up 10% year over year.
Bookings of $458.4 million improved 15% year over year. Creative Subscriptions’ bookings increased 12% year over year to $329 million. Business Solutions’ bookings rose 24% to $129.4 million. Solid uptake of WIX Studio, AI product suite and expanding commerce platform drove the strong bookings performance in the most recent quarter.
The strong growth of Business Solutions bookings and revenues was also aided by the string uptake of business applications, especially Paid Ads and Email Marketing, and an increase in transaction revenues.
Partners revenues in the second quarter were $148.4 million, or 34% of total revenues, up 29% year over year. The increase was driven by market share gains resulting from the onboarding of new agencies and freelancers.
Region-wise, North America, Europe, Asia and others, and Latin America contributed 60%, 25%, 11% and 7%, respectively, to second-quarter 2024 revenues, up 12%, 14%,11% and 7% year over year.
Operating Details
Non-GAAP gross margin was unchanged at 68% year over year.
Wix reported a non-GAAP operating income of $90.2 million compared with $68.9 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of June 30, 2024, Wix had cash and cash equivalents of $802.4 million. Long-term debt was $571.3 million compared with $570.5 million as of March 31, 2024.
Cash flow provided from operations amounted to $120 million compared with $47.8 million in the year-ago quarter.
Capital expenditures totaled $7.2 million. Free cash flow was $112.8 million.
Outlook Updated
For third-quarter 2024, revenues are expected to be between $440 million and $445 million, suggesting 12-13% growth from the prior-year quarter's reported figure.
The company anticipates 2024 revenues to grow 12-13% and in the range of $1.747-$1.761 billion.
Non-GAAP operating expenses are expected to be 50% of revenues for 2024 compared with the previous expectation of 50-51% due to the expectation of additional operating leverage.
Wix estimates free cash flow (excluding HQ capital expenditure) in the range of $460-$470 million, representing about 26-27% of revenues, up from $445-$455 million or 26% of revenues. This growth in free cash flow is expected to be primarily driven by continued operating leverage.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Wix.com has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Wix.com has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Wix.com is part of the Zacks Computers - IT Services industry. Over the past month, Check Point Software (CHKP - Free Report) , a stock from the same industry, has gained 4.8%. The company reported its results for the quarter ended June 2024 more than a month ago.
Check Point reported revenues of $627.4 million in the last reported quarter, representing a year-over-year change of +6.6%. EPS of $2.17 for the same period compares with $2 a year ago.
Check Point is expected to post earnings of $2.25 per share for the current quarter, representing a year-over-year change of +8.7%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Check Point. Also, the stock has a VGM Score of F.