Wix.Com Ltd (NASDAQ: WIX) stock nosedives on weak results outcome

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Wix.Com Ltd (NASDAQ: WIX) stock fell over 5.6% on 16th May, 2019 (as of 12:12 pm GMT-4 ; Source: Google finance) after the company posted mixed results for the first quarter of FY 19. WIX has reported Non-GAAP net income in the first quarter of 2019 of $1.5 million compared to a non-GAAP net loss of $(2.7) million for the first quarter of 2018.

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Net cash provided by operating activities in the first quarter of 2019 was $35.1 million, while capital expenditures totaled $5.0 million, leading to free cash flow of $30.0 million, compared to $21.4 million of free cash flow in the first quarter of 2018, a 40% year-over-year increase. The company has added 180,000 net premium subscriptions in the first quarter of 2019 to reach 4.2 million as of March 31, 2019, which is a 21% rise over the total number of premium subscriptions at the end of the first quarter of 2018. The company has also added 6.6 million registered users in the first quarter of 2019. Registered users as of March 31, 2019 were 148 million, which is a 19% increase compared to the end of the first quarter of 2018

WIX in the first quarter of FY 19 has reported the adjusted earnings per share of 3 cents, missing the analysts’ estimates for the adjusted earnings per share of 9 cents, according to Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 27 percent to $174.29 million in the first quarter of FY 19, beating the analysts’ estimates for revenue by 0.76%.

Meanwhile, in April, Wix had rebranded Wix Code as Corvid by Wix and released a technical preview of an updated version of the advanced developer platform, with new features, tools and functionalities. In April, Wix had planned to build a new headquarters and campus for employees based in Tel Aviv. The new space will allow Wix to scale the operations in a single location and accommodate growth for years to come. Wix plans to file in the coming days a motion seeking court approval in Israel to reauthorize the company to repurchase up to $100 million of its ordinary shares from time to time. In accordance with Israeli law, the Company must receive approval from the District Court prior to the implementation of any shareholder distribution program.

Additionally, the company will invest in building the infrastructure to increase the Customer Solutions globally. This expansion is expected to drive additional revenue and collections growth through increases in conversion due to a greater level of personalized support.

The company has raised Q2 collections guidance by approximately $1 million to $198-200 million.  The free cash flow guidance for 2019 would be $137-$141 million.

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