May 9, 2018 / 9:23 AM / in 5 months

UPDATE 1-Israel website group Wix.com boosts first-quarter revenue by 49 pct

(Adds details, comments from president/CFO)

By Tova Cohen

TEL AVIV, May 9 (Reuters) - Wix.com, which helps small businesses build and operate websites, on Wednesday reported a smaller-than-expected loss in the first quarter and raised its revenue forecast for 2018 as more users convert to paid subscriptions.

The company reported a loss of 5 cents a share, excluding one-time items, compared with a loss of 18 cents a year earlier as revenue rose 49 percent to $137.8 million.

Analysts had forecast an adjusted loss of 10 cents a share on revenue of $135.8 million, according to Thomson Reuters I/B/E/S.

Wix offers free basic features for setting up websites but users must pay for extra services such as shopping carts, individual web addresses and site traffic analysis.

Wix’s Nasdaq-listed shares are up 50 percent so far in 2018 after a 29 percent gain last year.

The company has 125 million registered users. During the quarter it added 231,000 paid users to reach 3.4 million premium customers, up 29 percent from a year earlier.

Wix attributed this to product improvements, including Wix ADI, a web design product aimed at less tech savvy users that is increasing the number of sites completed.

Wix said another product gaining traction was Wix Code, aimed at professional web designers and developers.

“We are seeing many thousands of people using Wix Code. We are seeing a lot of people forming developers’ communities and they are starting to support each other,” President Nir Zohar told Reuters.

Chief Financial Officer Lior Shemesh said that every 100,000 subscriptions generate more than $165 million in future collections that drive growth. He estimated that the first quarter’s new users would generate more than $370 million in future collections in the next eight years with minimal added marketing investment.

Wix projects 2018 revenue of $594-$597 million, up from a previous estimate of $591-$595 million for a 40 percent gain from 2017. Analysts were forecasting revenue of $594 million.

For the second quarter, it estimates revenue of $144-$145 million, up 39-40 percent from a year earlier.

Wix has said that at this stage it is focused on cash generation rather than becoming profitable, as investors expect the company to invest in future growth.

Zohar said Wix’s growth strategy is not based on acquisition of competitors but it has made a few small purchases focused on new technologies and intends to continue to do so as opportunities arise. (Editing by Steven Scheer and Jane Merriman)

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