Israel-based Wix.com (Nasdaq:WIX) which helps small businesses set up their websites has seen a significant surge in its revenues as businesses have shifted rapidly to the digital solution. But the growth in revenues is not translating to significant growth in margins as the company is investing heavily in marketing initiatives.

Wix’s Financials
For the quarter, Wix’s revenues grew 27% over the year to $236.1 million, surpassing the market’s estimates by 1.4%. The adjusted net loss of $0.26 per share was worse than the market’s forecast of a loss of $0.23 per share due to an increase in marketing spending from $71.3 million a year ago to $119.3 million.

By segment, revenues from creative subscriptions grew 28% to $217.7 million. Business service revenues grew 66% to $48.2 million for the quarter.

Among key metrics, Creative Subscriptions ARR grew 22% to $790.9 million. Total collections in the second quarter of the year grew 33% to $265.9 million. Net premium subscriptions grew by 346,000 to reach 5 million. It added 9.3 million registered users in quarter to end with 182 million total subscribers.

For the current quarter, Wix expects revenues of $247-$250 million, while the market forecasts revenues of $249.5 million. Wix did not provide an outlook for the fiscal year.

Wix’s Product Expansion
Wix continued to expand its product offerings during the quarter. It launched an extended eCommerce solution that grants merchants access to advanced online business tools, such as automated sales tax calculations, streamlined order and fulfillment, and an integrated sales channels that includes social media and marketplaces. It also announced the launch of a new brand and website creation platform Editor X. Prior to the quarter, Editor X was available as a closed beta program. The solution is focused on providing web designers and agencies with tools for advanced design capabilities.

Wix’s Platform Strategy: Platform or APIs

Wix has been focused on a PaaS strategy that allows developers to develop Web Apps that can be accessed by more than 190 million users worldwide. It allows developers to use its various REST APIs to access Wix user’s site data.

Wix’s Platform Strategy: Developer Community

Wix does not provide details on the number of developers on its platform. The platform gets several accolades from developers for the simplicity of the integration process and monetization capabilities. Developers can build apps that can reach millions of customers and in return allows these developers to earn subscription-based revenue.

Wix’s Platform Strategy: Marketplace and Metrics

Like several other players, Wix also does not disclose app metrics. Its app marketplace known as WixAppMarket has several apps that meet use cases ranging from marketing services, online sales, media and content improvement, design services to service and event management. It will be interesting to get more metrics around its strategy to truly evaluate the strength of its PaaS strategy.

Its stock is trading at $254.10 with a market capitalization of $14.03 billion. It had climbed a 52-week high of $319.34 in July. In March this year, the stock had fallen to a 52-week low of $76.81 due to the crisis.