(Adds CFO comments, details on users, share repurchase plan)
By Tova Cohen
TEL AVIV, May 16 (Reuters) - Wix.com, which helps small businesses build and operate websites, raised its 2019 revenue forecast after first-quarter sales beat estimates as more users converted to paid subscriptions.
The company reported on Thursday quarterly net profit of 3 cents a share excluding one-time items, compared with a loss of 6 cents a year earlier. Revenue grew 27 percent to $174.3 million.
Analysts had forecast an adjusted profit of 5 cents a share on revenue of $173 million, according to I/B/E/S data from Refinitiv.
Israel-based Wix offers free basic features for setting up websites, but users must pay for extra services such as shopping carts, individual web addresses and site traffic analysis.
“Our strong top line growth highlights the early success of our strategy to increase collections per subscription,” Chief Financial Officer Lior Shemesh said. “We are raising our outlook for revenue and collections to reflect these early successes.”
Shemesh told Reuters that more customers than expected had switched to two-year subscriptions from one-year packages.
Wix raised its 2019 revenue forecast to $758-$763 million from a previous forecast of $755-$761 million, now predicting a 26% increase from 2018. Analysts were forecasting revenue of $760 million.
For the second quarter it estimates revenue of $182-$184 million, up 25-26 percent from a year earlier.
The company has 148 million registered users. During the quarter it added 180,000 paid users to reach 4.2 million premium customers, up 21% from a year earlier.
Wix is investing in a new customer support product, which it said is helping it to upgrade users to paid services and will bear fruit next year.
Agents now provide round-the-clock assistance globally, helping subscribers finalise their websites while also selling them new products.
Wix said it expects this investment will drive incremental collections growth of 5% in 2020, or three times the investment.
The company plans in the coming days to seek court approval in Israel to re-authorize its repurchase up to $100 million of its ordinary shares, on a phased basis. (Reporting by Tova Cohen; Editing by Steven Scheer and Jan Harvey)