Wix.com Ltd. on Wednesday reported that more of its users have signed up for premium services than expected, leading the Israel-based website builder to adjust its revenue forecast higher.
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Revenue reached $137.8 million, up 49% from a year earlier and loss per share was down to 42 cents from 47 cents a year earlier. Excluding one time items, the company reported a loss of 5 cents a share in the first quarter compared to 18 cents last year.
Setting up a basic site on Wix is free but users, typically small businesses, must starting paying for a subscription to remove ads and access advanced services like shopping carts and email campaigns.
The company added 231,000 paid users in the first quarter to reach a total of 3.4 million, an increase of 29% compared to last year. The total number of registered users is 125 million.
The company said that a product known as Wix ADI, which helps users with little expertise design websites, has driven the increase in subscriptions. Wix Code, a product for developing advanced features, is attracting more web developers and professional web designers, Wix added.
“We are encouraged by the continued adoption of Wix Code, “ Wix CEO Avishai Abrahami, said in a statement, referring to the company’s product for professional web developers. “Every day, we see the potential of this product demonstrated with impressive results.”
After previously forecasting $591 million to $595 million for 2018, Wix now projects $594 million to $597 million, which comes out to a 40% increase over 2017.
“The first quarter results exceeded our expectations as conversion and retention outperformed expectations, contributing to the creation of our largest user cohort ever,” Wix CFO Lior Shemesh said in a statement. “We generated over $21 million in free cash flow, a record for a single quarter, demonstrating positive returns from our investment in marketing and R&D. We are increasing our outlook for 2018 to reflect this momentum and our continued confidence in the growth of the business."