TLDR
- Wix.com swung to a Q3 net loss of $0.01 per share from a profit of $0.46 per share a year ago, driven by higher tax expenses
- Third-quarter revenue jumped to $505.2 million from $444.7 million, beating analyst projections of $502 million
- Non-GAAP earnings reached $1.68 per share, surpassing the $1.49 per share consensus estimate
- Company projects Q4 revenue of $521 million to $531 million, reflecting 13% to 15% year-over-year growth
- BofA Securities trimmed its price target to $170 from $210 while keeping its Buy recommendation
Wix.com reported third-quarter results that showed the website platform provider swinging to a net loss while revenue beat analyst expectations. The company posted a net loss of $0.589 million, or $0.01 per share, for the three months ended September 30.
This marked a reversal from the year-ago quarter when the company earned $26.8 million, or $0.46 per share. The swing to a loss came primarily from income tax expenses that surged to $12.3 million from $3.1 million in the prior-year period.
Revenue climbed to $505.2 million during the quarter, up from $444.7 million a year earlier. The result exceeded the Street’s consensus forecast of $502 million. Thirteen analysts had provided estimates for the quarter.
The Creative Subscriptions segment drove revenue growth with $356.2 million in sales. This compared to $318.8 million in the same quarter last year.
Strong Performance in Business Solutions
The Business Solutions division delivered standout results with 20% year-over-year growth. This beat BofA Securities’ projection of 17% growth by three percentage points. Commerce applications and Google Workspace integration fueled the segment’s expansion.
On a non-GAAP basis, earnings came in at $100.2 million, or $1.68 per share. This topped last year’s adjusted profit of $1.50 per share and beat analyst estimates calling for $1.49 per share.
Operating income turned negative at $7.4 million compared to a profit of $25.8 million in the prior year. The company recorded $32 million in acquisition-related expenses for Base44 and HourOne deals.
Marketing Investments Impact Margins
Non-GAAP operating income totaled $90 million, falling short of BofA’s $93 million estimate. Free cash flow, excluding acquisition costs, reached $159 million and beat expectations of $153 million.
BofA Securities analyst Michael McGovern highlighted increased marketing spending as a factor in the lower operating income. Management disclosed accelerated advertising for Base44 and branding efforts.
Income before taxes dropped to $11.7 million from $29.9 million a year ago. Operating loss stood at $7.4 million versus prior-year earnings of $25.8 million.
Outlook Points to Continued Growth
For the fourth quarter, the company expects revenue between $521 million and $531 million. This represents 13% to 15% growth from the same period last year. The Street had forecast revenue of $525.6 million for the final quarter.
Wix raised its full-year revenue guidance to $1.99 billion to $2 billion, up 13% to 14% from 2024. The previous outlook was $1.975 billion to $2 billion. Analysts project full-year revenue of $1.99 billion.
BofA Securities kept its Buy rating but reduced its price target to $170 from $210. The stock trades around $126.92. Benchmark maintains a Buy rating with a $230 target. Needham also holds a Buy rating with a $200 price target.
Recent initiatives include adding Royal Mail to Wix Shipping for UK merchants and a PayPal partnership for AI-powered shopping features. The company maintained its 2025 constant currency Bookings guidance. Shareholders will meet on December 18, 2025, in Tel Aviv.
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