We want to reach 5, 10 and 15 billion dollars in sales
The Wix stock rally shows no signs of stopping; The company's stock is at an all-time high – over 11.4 billion dollars in value. Lior Shemesh, the company's long time CFO, in an exclusive interview: "We have the potential for much growth in the market itself. We have no significant competition”
וויקס For Israeli company Wix (NYSE: WIX), this period is a dream. The outbreak of the Coronavirus in recent months and the quarantine of millions of people has caused a sharp surge in the company's volume of operations, and it seems that even after the Coronavirus blows over, this year will be a formative year for the Israeli company. Wall Street investors re responding - the company's stock is now trading at a market value of more than 11.4 billion dollars, more than 180% up from the low point in last March
With the sharp increases and positive sentiment around the company's stock in recent months as background, we conducted an interview today with Lior Shemesh, CFO of the company, who elaborated on the company’s
future directions
"I think the beauty of a company like Wix is its ability to help people in such a predicament," says Shemesh, "True, the stock has soared lately in the wake of rising customer figures, but it is also important to consider the other side. The entire essence of Wix is to transfer businesses to working online. That means not only setting up a website, but running an entire business online, digitally
The current crisis only proves the need for a company like Wix. There is no
company today that offers services in the same way we do. There are quite a few companies that specialize in a specific niche, but no company offers a portfolio like ours. In recent months, we have seen small businesses, such as grocery / bakery stores in Italy, taking their business online. As of today, we are seeing the same growth trend in all markets that the company is active in
We are seeing a steady increase in revenue, but bottom line is that the company's profitability is low, what do you expect for the future
"The truth is that the profitability datum this year is not interesting, at least not right now. I will explain. Assume that we had an amazing quarter, and that we were able to increase collection by USD 10 million. As a result, we increased marketing expenditure by 4 million dollars, netting 6 million dollars more. In the income statement, the income is recognized over time, but expenditure is recognized in the same quarter. The result - the report shows that I have increased loss, but it is not true - the company's situation has improved
Therefore, investors should focus on the company's cash flow and the expected numbers in terms of users / collection. For this reason, we never publish a quarterly profitability projection, but emphasize these parameters
What are the risks you see for the coming years I don't think we have to worry about significant competition. The eco-system we have built is very large. Any company that tries to enter the field, even if its product is excellent, will have a very hard time dealing with the brand we have built. Today, when someone is looking to start a website, the first place they see is Wix
I think our real challenge is to maintain the current nature of the company, even as the company is going to grow significantly. Wix still has plenty of room to grow organically, so this is our most significant challenge.
When I compare Wix to the other companies, I see that we are highly superior in terms of our business model. This is a rare combination of a company that can grow organically, has substantial coffers and does not burn cash. Generally, growth companies burn cash - not Wix
In another 5 years, what is the company's vision? Do you think Wix will remain an independent company or will it be up for sale
"If we wanted to sell the company, we would have done it long ago. I think that if we are selling at 1 billion dollars today, we want to reach 5, 10 and 15 billion dollars in sales in the years to come, I estimate we have an opportunity to grow in a growing market.
When we founded the company, we wanted to establish another Israeli Check Point, which, by the way, we are already close to in terms of market value. We have proven that this glass ceiling can be broke .
Speaking of Israeli companies, you were criticized for not trading in Israel. What do you think about this
This is not an issue of Zionism, it is complicated. The Israeli capital market is problematic. I do not think that us coming here and setting up for trade in Israel will cure the market or help the market. We are not categorically opposed to it, but we have a problem with the manner in which the Israeli market runs. This is why many moves are required to reclaim the market, to increase knowledge. When I talk to investors overseas, it is much easier for me. We would love to be part of a program that will bring more technology companies to the domestic market rather than "junk companies" that had difficulty in borrowing abroad and ended up on the Tel Aviv Stock Exchang
We want stability, more comfortable regulation and a supportive environment. In the absence of these 3 components, it is meaningless for Wix to trade on the local stock exchange
Read more: The company's latest reports
In the meantime, the rally in the company's stock renews tonight, along with the positive trend in the market. The company's stock stands out with 4% increases to $230 a share .
Weekly graph of the company's stock in recent years: every investor's dream
