RiQiNet

WIX 2022 Q2 ??

Earnings per share: - $0.14 vs. - $0.39 expected, - $0.28 one year earlier
Revenue: $345.22 million (up 9% y/y) vs. $343.8 million expected, $ 316.41 million one year earlier, a two year CAGR of 21%

2022 Q3 forecast

Revenue: $341 to $345 million (up 7 - 8% y/y) vs. $356.58 million consensus expected
Earnings per share: -$0.22 consensus expected

Others

Full Year 2022 Revenue: up 8 - 10% y/y, consensus expected $1.42 billion
Full Year 2022 Earnings per share: -$1.36 consensus expected

Q2 2022 Financial Results

• Total revenue in the second quarter of 2022 was $345.2 million, up 9% y/y and representing a two year CAGR of 21%
  
  • Total revenue on a y/y constant currency basis was $349.0 million, up 11% y/y
  • Creative Subscriptions revenue in the second quarter of 2022 was $258.2 million, up 9% y/y
  • Creative Subscriptions ARR increased to $1.05 billion, up 9% y/y
  • Business Solutions revenue in the second quarter of 2022 was $87.0 million, up 9% y/y
    
    • Transaction revenue was $36.8 million, up 13% y/y
  • Partners revenue in the second quarter of 2022 was $84.9 million, up 31% y/y
• Total bookings in the second quarter of 2022 were $354.6 million, up 3% y/y and representing a two year CAGR of 15%
  
  • Total bookings on a y/y constant currency basis were $365.2 million, up 7% y/y
  • Creative Subscriptions bookings in the second quarter of 2022 were $269.9 million, up 3% y/y
  • Business Solutions bookings in the second quarter of 2022 were $84.7 million, up 6% y/y
• Total gross margin on a GAAP basis in the second quarter of 2022 was 61%
  
  • Creative Subscriptions gross margin on a GAAP basis was 74%
  • Business Solutions gross margin on a GAAP basis was 21%
• Total non-GAAP gross margin in the second quarter of 2022 was 62%
  
  • Creative Subscriptions gross margin on a non-GAAP basis was 76%
  • Business Solutions gross margin on a non-GAAP basis was 23%
• GAAP net loss in the second quarter of 2022 was $111.2 million, or $1.92 per share
• Non-GAAP net loss in the second quarter of 2022 was $7.8 million, or $0.14 per share
• Net cash used by operating activities for the second quarter of 2022 was $(2.7) million, while capital expenditures totaled $13.2 million, leading to free cash flow of $(15.9) million
  
  • Excluding the capex investment associated with our new headquarters office build out, free cash flow would have been $(6.0) million

Financial Outlook

• For Q3, we expect total revenue to be $341 to $345 million, representing 7 - 8% y/y growth. For the full year, we now expect revenue to grow 8 - 10% y/y. These ranges include the impact of y/y FX rates through July, discontinued commercial activities in Russia and the assumption that market conditions remain challenged for the remainder of the year.
• We expect free cash flow to be roughly 2 - 3% of revenue in 2022, inclusive of the cost reduction plan and y/y FX rate headwinds through July. On a y/y constant currency basis, this would translate into free cash flow margin of 4 - 5% of revenue for full year 2022.

Despite these lower revenue growth expectations, we expect that the cost reduction plan we have implemented will allow free cash flow as a percentage of revenue (excluding headquarters capital expenditures) in 2023 to be in line with the three-year plan outlined in May and drive accelerated gross and operating margins compared to the plan even if market conditions continue to be challenged in 2023. We are committed to this plan and are taking the necessary actions to achieve it.