ContextLogic (WISH) Reports Weak Q1 Results

ContextLogic Inc (NASDAQ:WISH) is the parent company of global e-commerce platform Wish. The company is best known for its low-cost alternatives in categories that range from electronics and cosmetics to toys and clothing. It primarily makes money by receiving commission from merchants on products they sell on its marketplace. It also generates revenue by providing ads and logistic services to its merchants. ContextLogic went public in December by selling its shares at $24 apiece for total proceeds of $1.1 billion (see largest ecommerce companies).

The San Francisco-based company recently announced weak financial results for the first quarter. ContextLogic reported a loss of $128 million, or 21 cents per share for the three months ended March 31, wider than a loss of 17 cents per share projected by analysts.

Revenue for the quarter climbed 75 percent on a year-over-year basis to $772 million. Analysts on average were looking for revenue of $743.1 million. Core marketplace revenue in the quarter jumped 40 percent on a year-over-year basis.

Speaking on the results, CEO Piotr Szulczewski said in a statement, “Our primary focus is to drive continued long-term growth through efficient user acquisition, increased monetization and higher retention. This quarter we delivered on our plan and saw momentum build for our newer initiatives, including Wish Local expansion, as well as our efforts to diversify product selection. As the worldwide economy continues to recover, we are pleased by the robust demand we are seeing on the Wish app.”

ContextLogic also issued its financial outlook for the second quarter. The company expects revenue in the range of $715 million to $730 million for the second quarter, translating to year-over-year growth of 2-4 percent. That is well below the $759 million projected by analysts.

WISH stock made a new 52-week low of $8.70 in the mid-day trading Thursday following the disappointing quarterly results and outlook.