July 25, 2018 / 8:50 AM / in 21 days

UPDATE 1-Israel's Wix.com swings to profit, raises 2018 outlook

(Adds CFO comments, details)

JERUSALEM, July 25 (Reuters) - Wix.com, which helps small businesses build and operate websites, swung to a profit in the second quarter on higher revenue and raised its revenue forecast for 2018.

It posted on Wednesday a quarterly profit of 29 cents a share excluding one-time items, compared with a loss of 2 cents a year earlier. Revenue grew 41 percent to $146.1 million.

Analysts had forecast an adjusted profit of 15 cents per share on revenue of $144.7 million, according to Thomson Reuters I/B/E/S.

Israel-based 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.

The company has 131 million registered users. During the quarter it added 205,000 paid users to reach 3.7 million premium customers, up 28 percent from a year earlier.

In June and July, Wix raised $443 million in a private offering of convertible bonds.

Chief Financial Officer Lior Shemesh said the fundraising was meant to strengthen the company’s balance sheet.

“We don’t have any specific plan to use the money, but we want to keep the flexibility if something comes up in the future,” Shemesh told Reuters.

Wix projects 2018 revenue of $597-$599 million, up from a previous estimate of $594-$597 million for a 40-41 percent gain from 2017. Analysts were forecasting 2018 revenue of $596.7 million.

For the third quarter it estimates revenue of $152-$153 million, up 37-38 percent from a year earlier.

Shemesh said the company raised its estimates in part due to the strong performance of new products, including ADI, a web design product aimed at less tech-savvy users, now offered in additional languages, as well as Wix Code, aimed at professional web designers and developers. (Reporting by Ari Rabinovitch; Editing by Tova Cohen and Louise Heavens)

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