According to a recent report, the global market for Website Builders is estimated to grow at nearly 9% CAGR to reach $2.7 billion by 2026. Israel-based Wix.com (WIX) is a leading player in the sector that is focusing on a partner strategy to drive growth.

Wix’s Financials

Wix’s first quarter revenues grew 14% to $342 million, surpassing the market’s estimates of $295.2 million. The adjusted net loss of $0.72 per share was worse than the market’s forecast of a loss of $0.64 per share.

By segment, revenues from creative subscriptions grew 13% to $255 million. Business Solutions revenues grew 17% to $86.6 million for the quarter. Among key metrics, Creative Subscriptions ARR grew 12% to $1.04 billion.  

For the current quarter, Wix expects revenues of $342-$346 million, while the market forecasts revenues of $312.34 million.

Wix’s Partner Growth

Recently, Wix announced its partnership with DoorDash Drive (DASH), DoorDash’s white-label fulfillment platform that powers direct delivery for any business, to integrate with Wix Restaurants. The integration provides restaurant owners using the Wix Restaurant program access to an expansive delivery fleet.

Businesses on Wix Restaurants have the ability to fulfill delivery orders made directly on their website, their Dine App, and their fully Branded App through DoorDash Drive. With the option, Wix Restaurants are provided with greater flexibility and control over delivery costs and logistics without the overhead of building or hiring a delivery team.

It also announced its partnership with LegalZoom (LZ) which will allow small business owners to create, manage, and grow an online presence. With the integration, entrepreneurs will be able to have a unified experience to legally form their business in the U.S. and build their online presence, in a single place.

LegalZoom’s legal and compliance solutions will be integrated with Wix’s online platform to provide SMBs with the tools needed to start, manage, and grow their business.

Business owners will have the option to gain access to LegalZoom’s legal, tax, and compliance solutions and services, as well as immediate access to a website built for their business type at the time of formation. This partnership is expected to help individuals looking to start a business and generate revenue.

Wix’s partner revenues come from subscriptions from third-party web design agencies and the new business partners it adds during the year. The partner strategy is still in its early days, but is expected to be a significant portion of its subscription revenue. It is hoping to continue to drive this growth by expanding this partner network.

But despite these moves, its profitability remains a big concern. During the quarter, it reported a net loss of $227.3 million. Adjusting for these losses, it ended the quarter with $41.4 million in losses. The cash flow situation was no better. It reported a negative free cash flow of $33.6 million.

Wix, however, is focusing on improving its profitability. It has planned to slow down hiring and spending on marketing. It expects to turn cash flow positive for the year though, and hopes to have free cash flow margins of 20% in 2025. Wix is counting on operating leverage from its investments like partners and the slowdown of its pace of hiring to drive this growth.

It has been a turbulent few weeks for the stock market. Wix’s stock has already fallen more than 50% since the start of the year. Its stock is trading at $63.66 with a market capitalization of $3.6 billion. It had climbed a year-high of $309 in June last year and fallen to a 52-week low of $56.24 earlier this month.