https://seekingalpha.com/pr/17224927-wix-reports-second-quar…
Beat, beat and raise.
- Increased free cash flow in the second quarter to our highest quarterly amount ever, $23.9 million, up 37% y/y
- Results driven by strong cohort performance and continued increases in conversion and retention as users of all types adopt enhanced and new products
- Raised outlook for 2018 reflecting continued strong development momentum and cohort performance to drive top line growth and free cash flow
Nice - this is another very fast grower that has exploding into Non-GAAP profitability and managing the transition from high growth unprofitable to high growth profitable plays. I love it when this happens.
Ant
9 Likes
Hi ant, That 29 cents of adjusted earnings is pretty astounding. I am no longer in Wix, and I’m no longer following it, but I put the results in my tables which I still have, and there are a couple of things I don’t quite understand:
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While I was in Wix, I was excited about their new Code program, which was supposed to explode their TAM, and they were pretty excited about it too, and since it’s now out there I’m curious about revenue growth dropping from 51% a year ago, and from 49% sequentially, to 41% this quarter. That’s a pretty substantial drop in growth rate for a company with an exciting and “revolutionary” new product.
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Collections were flat sequentially at $160 million, and this is the first time in 3 years (12 quarters) that collections haven’t risen (57-62-67-76-81-87-98-114-117-120-132-160-160)
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As far as the Increased free cash flow in the second quarter to our highest quarterly amount ever, $23.9 million, up 37% y/y! …Yes, it is their highest ever, but it’s just one in a sequence of small increments: 17.5 - 18.9 - 19.6 - 21.4 - 23.9, not something worth being the top headline figure in the press release, in fact the only numerical result headlined in their press release. Just odd. (I guess I would have headlined the increase in adjusted earnings per share).
Writing this made me wonder whether it’s just sour grapes on my part because I am no longer in Wix, but I do think those are valid points to think about.
Saul
22 Likes
Seems the WIX glass is half empty for some here.
🆁🅶🅱
“Seems like Wix brings a half empty for some here”
For me - it’s more like a - the glass will never be more than half full
How does Wix expand its model and add more value?
Shopify and Square offer much more complete packages for non-hobbyists looking for eCommerce
Having tried both Wix and Squarespace…I chose Squarespace for my business needs.
I see Wix as a feature, not a business, so I don’t track the long term vision.
I’d love to hear rebuttals.
2 Likes
I hear you Saul and thanks for taking a once over on this. Whilst I was always suspicious of Wix my main concern was that it might go ex growth long before it reached profitability. What I’m happy to see is that they have hit profitability and still growing. Collections have had flat plateaus before but definitely one to watch.
As it happens it reminded me to share an observation I want to make after your New Relic re-entry. Whilst your timing is amazing and foresight and judgement incredible, I always felt that of your recent position exits the ones I differed in my opinion on the most were New Relic, MungoDB and Talend followed by Hubspot, Wix and Twilio (and from ancient history Abiomed - not that I can justify its valuation).
That’s completely anecdotal and doesn’t even correlate with my own holdings, purchases and sales.
Cheers
Ant
1 Like
I always felt that of your recent position exits the ones I differed in my opinion on the most were New Relic, MungoDB and Talend followed by Hubspot, Wix and Twilio
Hi Ant,
Well, I’m sure you are glad to know that out of the six you thought I shouldn’t have exited, I’m back in three; New Relic, MungoDB, and Twilio and, in fact, Twilio is currently my second biggest. The problem is that I only carry 10 or 11 stocks, and so I can’t own all the good companies in the world. I have to try to pick the best. For example, which of my “great” stocks would I sell to replace it with Hubspot, which I consider just a “good” stock.
Thanks for a thought-provoking post,
Saul
3 Likes