Wix.com (WIX) Stock: Drops After Revenue Beat and Raised Guidance Are Overshadowed by Loss

TLDR

• Wix.com posted a Q3 net loss of $0.01 per share versus a profit of $0.46 per share last year due to increased tax expenses
• Q3 revenue climbed to $505.2 million, up from $444.7 million year-over-year, topping Street estimates
• Adjusted earnings of $1.68 per share beat analyst forecasts of $1.49 per share
• Q4 revenue guidance set at $521 million to $531 million, up 13% to 15% from last year
• BofA Securities reduced price target to $170 from $210 but kept Buy rating

Wix.com delivered a mixed bag of third-quarter results that saw the Israeli website builder swing to a quarterly loss while revenue climbed past Wall Street’s expectations. The company reported a net loss of $0.589 million for the quarter ending September 30.

The loss translates to $0.01 per share. This compares to net income of $26.778 million, or $0.46 per share, in the same quarter last year. Income tax expenses jumped to $12.280 million from $3.075 million in the prior year period, driving the bottom-line miss.

Wix.com Ltd., WIX

Revenue told a different story. The company brought in $505.2 million during the quarter, up from $444.7 million a year earlier. This topped analyst expectations of $502 million and showed strong demand for the platform’s services.

Creative Business Leads Revenue Growth

The Creative Subscriptions business generated $356.2 million in revenue. This represented an increase from $318.8 million in the previous year and accounted for the bulk of quarterly revenue.

Adjusted earnings painted a brighter picture than GAAP results. Excluding special items, the company earned $100.2 million, or $1.68 per share. This beat last year’s adjusted earnings of $1.50 per share and crushed analyst estimates of $1.49 per share.

The Business Solutions segment showed the strongest momentum with 20% year-over-year growth. This acceleration outperformed BofA Securities’ estimate of 17%. Commerce and business applications, including Google Workspace integration, powered the segment’s performance.

Acquisition Costs Weigh on Operating Results

Operating income swung to a loss of $7.4 million from a profit of $25.8 million last year. The company booked $32 million in acquisition expenses related to its Base44 and HourOne purchases.

Non-GAAP operating income reached $90 million but missed BofA’s forecast of $93 million. Free cash flow excluding acquisition costs hit $159 million, beating expectations of $153 million.

BofA Securities analyst Michael McGovern noted that increased marketing expenses contributed to the lower operating income. Management said they ramped up advertising spend for Base44 and branding campaigns.

Company Raises Full-Year Outlook

For the fourth quarter, Wix expects revenue between $521 million and $531 million. This guidance represents 13% to 15% growth compared to last year’s final quarter. Analysts had projected revenue of $525.6 million.

The company raised its full-year revenue outlook to $1.99 billion to $2 billion, up 13% to 14% from 2024. The previous guidance called for $1.975 billion to $2 billion. The revision aligns with analyst expectations of $1.99 billion for the year.

BofA Securities maintained its Buy rating but lowered its price target to $170 from $210. The stock currently trades around $126.92. Benchmark kept its Buy rating with a $230 target, while Needham held its Buy rating at $200.

The company recently integrated Royal Mail into its Wix Shipping service for UK merchants. It also partnered with PayPal to offer AI-powered shopping capabilities. The Annual General Meeting is scheduled for December 18, 2025, in Tel Aviv.

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