By Steven Scheer
JERUSALEM, Nov 12 (Reuters) – Wix.com WIX.O, which helps small businesses build and operate websites, swung to a loss in the third quarter, but revenue jumped on strong demand by businesses looking to boost their online presence during the COVID-19 pandemic.
Amid a steep rise in marketing expenses, the Israeli company on Thursday reported a quarterly net loss excluding one-time items of 14 cents per share that was slightly better than expectations, compared with a profit of 41 cents per share a year earlier. Revenue grew 29% to $254.2 million.
Analysts had forecast Wix would lose 15 cents a share ex-items on revenue of $249.9 million, according to I/B/E/S data from Refinitiv.
Total third-quarter operating expenses surged by $60 million from a year earlier to $224 million in what company officials called an “efficient investment” that will pay off in the short and medium term.
Nir Zohar, Wix’s president, said the pandemic had led to a surge in businesses moving online that had now stablilised amid an overall sentiment change.
“There’s an ongoing shift of businesses to online,” he told Reuters. “That trend has accelerated. What would have taken a few more years has happened over the last few months because COVID made it a necessity.”
Wix has 189 million subscribers after 7.8 million joined in the quarter for a 42% year over year rise. It added 302,000 premium subscriptions, up 164%, to 5.3 million.
“Users that joined Wix during the third quarter purchased subscriptions at higher rates than we have seen in several years and at higher prices,” said chief financial officer Lior Shemesh. “This significant growth in new users … positions us well to drive growth in 2021 and beyond.”
For the fourth quarter, Wix forecast revenue of $266-$271 million, up 30-32% from a year earlier. Analysts expect Wix to post revenue of $265.7 million for October-December.
For all of 2020, Wix expects 28% growth in revenue to $972-$977 million.
(Reporting by Steven Scheer; Editing by Ari Rabinovitch and Mark Potter)
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