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JERUSALEM, Feb 17 (Reuters) - Wix.com, which helps small businesses build and operate websites, expects revenues to grow by almost a third this year amid a surge in demand from companies to create an online presence in the coronavirus pandemic.
Even as economies emerge from lockdowns, companies remain committed to creating and bolstering their websites, said Nir Zohar, Wix’s president.
“We have had a five year acceleration within a few months,” Zohar told Reuters on Wednesday after Wix posted fourth-quarter results. “There is a real shift in how people are thinking about themselves and ... how to become more effective as a business.”
Wix projects 29-30% revenue growth in 2021 to $1.272-$1.286 million, after a 30% rise to $988.8 million in 2020. Analysts have forecast $1.261 billion for 2021, according to I/B/E/S data from Refinitiv.
Wix has 196.7 million subscribers after 7.4 million joined in the fourth quarter for a 27% year over year rise. It added 185,000 premium subscriptions, up 107%, to 5.5 million.
The Israeli company plans $60 million of investments in 2021, including adding more than 600 staff.
Its shares were up 4.4% at $12.23 in pre-Nasdaq trade. They are up 12% so far in 2021 after a 104% jump last year.
Wix reported a fourth-quarter net loss excluding one-time items of 3 cents per share, compared with a profit of 39 cents per share a year earlier. Revenue grew 38% to $282.5 million.
Analysts had forecast Wix would lose 11 cents a share ex-items on revenue of $270.2 million, according to I/B/E/S data from Refinitiv.
Much of Wix’s losses stem from large research and development and marketing spending. Officials say such investments are needed when growth is accelerating and the higher revenue will ultimately lead to higher profit.
“It is clear that we can now become a dominant player on the internet, and I expect us to strengthen this position significantly over the coming decade,” said CEO Avishai Abrahami. “My goal and belief is that at this rate of growth, in the next 5-7 years, 50% of anything new built on the internet will be done on Wix.”
Zohar added that Wix has a strong balance sheet with cash of $1.6 billion.
For the first quarter, Wix sees revenue of $291-$296 million, up 35%-37% from a year earlier. Analysts are currently forecasting $287.5 million. (Reporting by Steven Scheer; Editing by Jason Neely and Mark Potter)