ContextLogic (WISH) Misses Q4 EPS by 1c, Revenues Beat; Offers 1Q Revenues Guidance Above Consensus

ContextLogic (NASDAQ: WISH) reported Q4 EPS of ($3.04), $0.01 worse than the analyst estimate of ($3.03). Revenue for the quarter came in at $794 million versus the consensus estimate of $736.1 million.

Business Highlights:

• Q4 Core Marketplace Revenue per Active Buyer increased 66% YoY and 25% sequentially from Q3.
• Wish Local, which finished its first full year since launching in late 2019, accounted for more than 6% of total orders in Q4.
• Grew the number of U.S. merchants in our network by 435% YoY.
• Launched logistics-as-a-service pilot for non-Wish merchants.
• Onboarded new brands as merchants, including Mizuno, Rue La La and TracFone Wireless.
• Launched several new products and features, including a daily sweepstakes, translation of product info to more than 40 languages, improved time to delivery estimates, and live chat support.
• Ended 2020 with a solid cash position of $2 billion cash and cash equivalents and free cash flow of nearly breakeven.
• For the full year 2020, Monthly Active Users (MAUs) increased 19% YoY to more than 107 million.
• MAUs declined 10% YoY during Q4 to 104 million, primarily in some emerging markets outside of Europe and North America where Wish temporarily de-emphasized advertising and customer acquisition as the company worked through logistics challenges it faced earlier in the year.
• Completed Wish’s initial public offering (IPO) of 46 million shares in December, raising approximately $1.1 billion in gross proceeds, before deducting underwriting discounts and commissions, as well as other offering expenses.

“As a newly public company, we are pleased with Wish’s performance in a year marked with unprecedented global challenges,” said Wish Founder and CEO Peter Szulczewski. “Strong demand for our Marketplace and Logistics services drove total Q4 revenue growth of 38% year over year.

“Our efforts to improve buyer monetization and engage with high lifetime value customers drove strong year over year and sequential growth in Core Marketplace Revenue per Active Buyer. As we worked to improve the Wish customer experience, merchants rapidly adopted our proprietary logistics platform and we significantly reduced average time to door worldwide. We’re also building up our network of local brick-and-mortar Wish Local partners, which now includes more than 50,000 stores across 40 countries, providing us with in-market warehousing and a more cost-effective 'buy online, pick up in store' option for customers.

“The opportunity in mobile ecommerce is massive. Wish is uniquely positioned to address the needs of an underserved group of billions of value-conscious consumers. We will continue to invest in building an affordable world-class ecommerce platform, while striving to drive strong revenue growth and margin expansion over time. Our priorities for 2021 include driving efficient customer acquisition and monetization, optimizing our logistics infrastructure, scaling Wish Local, adding new product categories, and opening up our platform to make our services available to non-Wish merchants,” concluded Szulczewski.

GUIDANCE:

ContextLogic sees Q1 2021 revenue of $735-750 million, versus the consensus of $668.32 million.

For earnings history and earnings-related data on ContextLogic (WISH) click here.

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