JERUSALEM (Reuters) – 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.
(Reporting by Steven Scheer; Editng by Bradley Perrett)
Source: One America News Network
