Wix.com reports 2Q loss but beats expectations

Wix.com, the Israeli company that helps small business owners build websites, today reported earnings for its second financial quarter of 2016.

For the quarter ending June 30, the Tel Aviv-based software provider posted growing revenue and a loss. Wix posted a net loss of $11.4 million, or 28 cents loss a diluted share, compared to a loss of $12.3 million, or 31 cents loss per share in the year-ago quarter. Losses, adjusted for stock option expenses, came to 9 cents per share.

The apparent imbalance was due to the recent launch of Wix ADI, an automatic website design tool that started rolling out in early June. According to the company, Wix Artificial Design Intelligence (ADI) technology can design tailored websites by learning about each person’s or business’ own needs and the company is investing heavily in this area.

Still, the results topped Wall Street expectations. The average estimate was for a loss of 12 cents per share.

The decline in profit came on a big increase in revenue, which topped Wall Street expectations as well. Second-quarter sales increased 41 percent to $68.7 million compared to $48.6 million for the second quarter 2015. Analysts expected $66.7 million.

In the last three months, Wix invested $25.5 million in research and development and $36 million in selling and marketing. These expenses significantly impacted its bottom line.

“We continue to generate an exceptional blend of higher conversion of registered users to premium subscriptions, improved retention of subscriptions, and increased collections per new subscription,” Avishai Abrahami, Co-founder and CEO of Wix, said in a press release.

For the second quarter, Wix added 183,000 net premium subscriptions to reach 2.12 million.

For the six months ending June 30, Wix posted net loss of $31.3 million, or 77 cents loss per diluted share, compared to a loss of $28.3 million, or 73 cents loss per share in the 2015 comparable period. Revenues increased 40 percent to $130.3 million from $93.1 the year before.

In Nasdaq trading today, Wix shares were up $3.37 at $35.02, or up 10.65 percent.