Wix.com (NASDAQ: $WIX) is the company behind Wix, the powerful, user-friendly, no-code website builder. Its powerful in-built features and institutive technology allow users to design a professional website easily that works on any device.
On Monday, May 20, 2024, Wix.com released is first quarter results for fiscal 2024 to a positive market reception after beating earnings and revenue estimates.
Wix.com Posts Stellar Q1 Results
For the first quarter of fiscal 2024, Wix.com posted revenue of $419.78 million, up 12% Y/Y and above estimates of $417.9 million. Earnings for the first quarter came in at $1.29, compared to a $018 loss in the first quarter of 2023, and above estimates of $1.03.
Wix.com reported a 10% Y/Y growth in total bookings to $457.3 million in the first quarter, driven by growth in creative subscription bookings of 334.6 million, a 7% Y/Y increase. Meanwhile, Business Solutions bookings were up 21% Y/Y to $122.6 million.
The company report a GAAP gross margin of 67% compared to 65% in Q123, while the non-GAAP gross margin came in at 68% compared to 67% the previous year.
GAAP net income came in at $24 million in Q1 compared to a $10.4 million GAAP net loss in Q123, while no-GAAP net income came in at $77.3 million compared to $51.1 million the previous year.
The company reported $113.8 million in net cash from operations, while capital expenditure came in at $8.1 million for a free cash flow of $105.7 million in Q1, above the $25 million free cash flow in Q123.
Share Buyback
The company announced it had completed $300 million in share buyback, buying back 2.4 million Wix shares at an average price of $124.91 per share. The company also reported it had reduced its workforce by 1% Q/Q to 5,235.
Wix.com Issues Revised Outlook
Buoyed by its stellar Q1 results, stated that it expects to surpass the Rule of 40 in 2025. For fiscal 2024, the company expects bookings of $1.796 billion to $1.826 billion, representing 12%-14% Y/Y growth. The revised bookings outlook is around $13 million higher than the previous outlook at the midpoint.
It also revised its full-year revenue guidance upward and now expects $1.738 billion to $1.761 billion in revenue or an 11% to 13% Y/Y increase. At the midpoint this represents an $8 increase from the previous guidance at the midpoint.
The company reiterated its non-GAAP total gross margin guidance of 68% to 69% for the full year. It also revised its full-year non-GAAP operating expenses guidance, and now expects it will be 50% to 51% of revenue a slight reduction from the previous 51% to 52% guidance.
For the full year, Wix.com now expects free cash flow of $446 million to $455 million, around 26% of revenue compared to the previous guidance of 21% to 23%.
The company reiterated its expectation of a position GAAP operating income for FY24 and a second consecutive year of GAAP net income.
For the second quarter, Wix.com now expects bookings to grow by 16% at the high end of their guidance, compared to the previous forecast of 15% growth.
It now expects Q2 revenue to come in at $431 million to $435 million, representing an 11-12% Y/Y increase.
Wix.com reiterated its previous guidance of around 13% for stock-based compensation in FY24, which is in line withitsr three-year plan.
Wix.com Stock Performance
Following the steal Q1 results, WIX shares soared 10.37% a few minutes after the opening bell to $149.75. By 11:10 AM, the gain hag grown to 21.20% for a share price of $164.44. The stock has performed quite well since the start of 2024 and is up 14.98% YTD. Over the past 52 weeks, the shares have gained 71.92%, outperforming the broader market
The short interest in the stock remains relatively unchanged over the past month, and stands at 1.16 million WIX shares, representing 2.52% of the floating shares, and 2.08% of the shares outstanding.
WIX shares are trading above the 50 and 200 DMA of $130.45 and $11.69, respectively.
Analysts’ Outlook on WIX
Eighteen stock analysts give WIX strong a strong buy rating. They forecast a wide range for the stock, with a high of $180 and a low of $127. Their average price target of $158.24 is a 16.63% upside based on the last closing price.
Should You Add WIX to Your Portfolio in 2024?
Wix.com has been posting profitable quarters since the second quarter of fiscal 2023. The latest positive quarter proves that the company can grow revenue while keeping costs down. Analysts remain bullish on the stock as the company charts a clear path to profitability.
Based on its fiscal 2024 guidance, this year will be the second straight year the company posts a full-year GAAP operating profit. Investors have responded positively to its shift to profitability.
The stock has beaten the market in the past 52 weeks, and analysts expect further growth in 2024. Consequently, WIX stock could potentially be a great addition to your portfolio.
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