Wix.com (WIX) Stock: Q3 Results Show Net Loss But Revenue Beats Estimates

TLDR

• Wix.com reported a net loss of $0.589 million ($0.01 per share) in Q3, compared to a profit of $26.778 million in the same quarter last year, primarily due to higher income tax expenses
• Revenue increased to $505.194 million from $444.673 million year-over-year, beating analyst expectations of $502 million
• Adjusted earnings of $1.68 per share exceeded analyst estimates of $1.49 per share
• The company expects Q4 revenue between $521 million and $531 million, representing 13% to 15% growth year-over-year
• BofA Securities lowered its price target from $210 to $170 while maintaining a Buy rating, citing increased marketing expenses

Wix.com reported mixed third-quarter results that showed the company swinging to a net loss while revenue climbed past analyst expectations. The website builder posted a net loss of $0.589 million, or $0.01 per share, for the three months ending September 30.

This marked a sharp reversal from the same period last year when the company earned $26.778 million, or $0.46 per share. The loss stemmed primarily from income tax expenses that jumped to $12.280 million from $3.075 million in the prior year.

Wix.com Ltd., WIX

Despite the bottom-line miss, the company delivered where it counted for growth. Revenue reached $505.194 million, up from $444.673 million a year earlier. The figure topped the Street’s consensus estimate of $502 million.

The Creative Subscriptions business drove much of the growth. This segment generated $356.174 million in revenue, compared with $318.825 million in the previous year.

Business Solutions Segment Accelerates

The Business Solutions segment showed particularly strong momentum with 20% year-over-year growth. This acceleration of 8 percentage points outpaced BofA Securities’ estimate of 17% growth. Commerce and business applications, including Google Workspace, powered the segment’s performance.

Free cash flow excluding acquisition costs hit $159 million, surpassing expectations of $153 million. However, GAAP operating income turned negative at $7.371 million, down from earnings of $25.846 million in the prior year.

The operating income weakness came from $32 million in acquisition expenses tied to Base44 and HourOne purchases. Non-GAAP operating income reached $90 million but fell short of BofA’s $93 million estimate.

Marketing Spend Pressures Margins

BofA Securities analyst Michael McGovern pointed to increased marketing expenses as the culprit behind the lower operating income. Management indicated they accelerated advertising spending for Base44 and branding initiatives.

On an adjusted basis, earnings came in at $100.197 million, or $1.68 per share. This beat both the prior year’s $89.262 million ($1.50 per share) and analyst expectations of $1.49 per share.

The company guided fourth-quarter revenue to a range of $521 million to $531 million. This represents 13% to 15% growth compared to the same period last year. Analysts had been modeling $525.61 million for the final quarter.

Full-Year Outlook Raised

For the full year, Wix raised its revenue guidance to $1.990 billion to $2 billion, up 13% to 14% from last year. The previous outlook called for $1.975 billion to $2 billion. The new range aligns with analyst expectations of $1.99 billion.

BofA Securities maintained its Buy rating on the stock but cut its price target to $170 from $210. The stock currently trades at $126.92, below both the old and new price targets.

Benchmark kept its Buy rating with a $230 price target. Needham also maintained a Buy rating with a $200 target, citing positive feedback on Wix Studio’s adoption.

The company has been expanding its service offerings. Recent moves include integrating Royal Mail into its Wix Shipping service for UK merchants and partnering with PayPal to offer AI-powered shopping capabilities.

Wix maintained its 2025 constant currency Bookings guidance despite foreign exchange fluctuations. The company’s Annual General Meeting is scheduled for December 18, 2025, in Tel Aviv.

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