Wix.com creator expects $14 billion in revenue over next decade

Office website design company Wix.com is shown in Tel Aviv, Israel July 4, 2016. Picture taken July 4, 2016. REUTERS/Baz Ratner/File Photo

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JERUSALEM, May 12 (Reuters) – Israeli site Wix.com (WIX.O) on Wednesday predicted more than $14 billion in revenue from existing customers over the next 10 years, saying the COVID crisis has driven more small businesses to use its services to build and operate websites.

After higher-than-expected first quarter revenue, Wix has also slightly raised its outlook for 2021.

“The growth we saw last year continues this year,” Wix chief financial officer Lior Shemesh told Reuters. Because of the coronavirus, “traders have changed their behavior. We are not going to go back”.

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He said the $14 billion revenue projection stems from Wix’s big marketing campaigns that are currently eating away at its profits but helping to grow its market share. Revenues would be even higher for future customers, Shemesh said.

“Marketing is for future” customers, he added.

Starting this quarter, Wix stopped publishing the number of users it has, but as of February it had 200 million worldwide, with 5.5 million premium customers at the end of 2020.

The company, which operates on a “freemium” model, noted that conversions from free to paid services are increasing as Wix adds more tools to help businesses manage their businesses following acquisitions.

Wix – whose Nasdaq-listed shares are up 16% so far this year – raised its outlook for 2021 and expects revenue of $1.28-1.29 billion for annual growth of 29-30% against an estimate of $1.272 billion to $1.286 billion made in February.

“As businesses increasingly need e-commerce capabilities, we believe our growth will continue throughout the year,” the company said.

In the first quarter, it lost 54 cents per share excluding one-time items from a loss of 1 cent per share a year earlier due to higher financial, research and development and other spending.

Revenue increased 41% to $304.1 million.

Analysts had expected a loss of 66 cents per share on revenue of $295.2 million, according to I/B/E/S data from Refinitiv.

For the second quarter, Wix forecasts revenue of $308-312 million, up 30-32% from last year. Analysts predict that Wix will post revenue of $312.3 million in the April-June period.

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Reporting by Steven Scheer; edited by Jason Neely

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