Website creator Wix.com plans cost cuts as Q2 loss narrows
2022.08.10 12:10
FILE PHOTO: The logo of website-designer firm Wix.com is seen at a high-tech park in Beersheba, southern Israel August 28, 2017. Picture taken August 28, 2017. REUTERS/Amir Cohen/
JERUSALEM (Reuters) – Wix (NASDAQ:WIX).com, which helps small businesses build and operate websites, on Wednesday reported a smaller-than-expected second-quarter loss and announced a plan to sharply reduce costs by $150 million a year.
The Israeli company said it had lost 14 cents per share excluding one-time items, compared with a loss of 28 cents per share a year earlier. Revenue grew 9% to $345.2 million.
Wix was forecast to lose 34 cents excluding one-time items, on revenue of $344 million, according to Refinitiv I/B/E/S data.
“Despite the current macroeconomic environment, we are focused on what is under our control – driving operational efficiencies to accelerate our path to profitability while
continuing to execute on growth initiatives,” said chief executive Avishai Abrahami.
Under a three-year plan, Wix said it would take comprehensive cost-cutting measures, including in its labour force, aimed at raising free cash flow and accelerating margin expansion. About 20% of the annualised savings are expected to
be realized already in 2022, it said.
Wix, whose shares have slid 56% so far in 2022, projected free cash flow to be roughly 2% to 3% of revenue in 2022. It seeks to achieve a free cash flow margin of 20% by 2025.
For the third quarter, Wix estimated revenue of $341 million to $345 million, representing annual growth of 7% to 8%. That would be below analysts’ forecasts of $354 million.
It expects revenue growth of 8% to 10% in 2022, below a prior estimate in May of 10% to 13%.
Wix noted the estimates included the impact of closing operations in Russia, an assumption that market conditions would remain challenging for the remainder of the year, and foreign exchange effects.
