Wix (Nasdaq:WIX), a company well-known for helping small businesses build and operate websites, has reported strong earnings for its second financial quarter of 2016.
Wix posted a 41 percent revenue increase to $68.7 million compared to $48.6 million for the same period last year. On the flip side, however, the company reported a net loss of $11.4 million, which topped even Wall Street expectations.
The Israel-based company also added 183,000 net subscriptions, beating its last quarter record.
Avishai Abrahami, Co-founder and CEO of Wix said, “The incredible momentum in our business continued during the second quarter as we generated record growth in net premium subscriptions.”
What’s Behind the Record Q2 2016 WIX Earnings?
Growing Revenue, Declining Profit
Analysts believe the drop in profit has come from the substantial investment Wix made in the last three months in research and development ($25.5 million) and sales and marketing ($36 million).
Significantly, Wix rolled out its Artificial Design Intelligence (ADI) technology in June. The company said the initial response to the technology has been extremely favorable.
This new service has been designed to build an entire website on its own. The program searches the net and incorporates content and pictures the user may have posted online earlier. It also accesses the company’s database to refine the new site’s composition.
“It will be extremely positive for us,” Chief Financial Officer Lior Shemesh told Reuters.
Wix Continues Winning Over Small Businesses
An interesting highlight of the quarterly report is Wix’s mobile growth. The company said its users have created over 17.9 million mobile sites, making it one of the largest mobile site development platforms globally.
Another feather in the cap for he Web development company is the growing number of eCommerce subscriptions.
Notably, Wix has been taking some important steps to expand its services and attract more small businesses. Back in 2014, Wix acquired OpenRest, an online ordering service for restaurants. It also integrated with some other companies to enhance some of its services.
Last year, Wix expanded its services to also include Customer Relationship Management (CRM) tools.
By staying focused on serving the needs of small businesses, Wix has managed to stay one step ahead of its competition.