What happened

Shares of website builder Wix.com (WIX 0.30%) are crashing -- down 14.5% as of 10:15 a.m. EDT -- despite the company reporting an earnings and revenue beat late last night.

Heading into Q2, Wall Street had forecast that Wix would lose $0.37 per share (pro forma) on $311.7 million in revenue. In fact, the company lost only $0.28 per share, and its revenue was $316.4 million -- clear wins on both counts.  

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Image source: Getty Images.

So what

Moreover, the loss that Wall Street predicted for Wix -- and the smaller loss that Wix reported -- were both pro forma numbers. The company's actual net income when calculated according to generally accepted accounting principles (GAAP), however, was an even more impressive positive $0.66 per share.

Sales for the quarter climbed 34% year over year, with Wix observing that "more businesses continue to use Wix to create, manage and grow their online presence, with an increasing number depending on us as their full operating system." Why, Wix even reported positive free cash flow for the quarter of $14.7 million!

Now what

And yet, the stock is down today. Why is that?

Valuation is certainly one concern. Even with $73 million in trailing free cash flow, Wix trades for more than 200 times its cash profits for the past year.

Guidance -- and what it portends for Wix's growth rate -- is another concern. Wix predicted that Q3 sales will range from $311 million to $317 million, which implies as much as 25% year over year growth. Wall Street, however, was expecting Wix to do more than $325 million in sales in the third quarter, so the company's forecast amounts to a promise to "miss" in Q3. Similarly, management says full-year sales will not exceed $1.27 billion, short of analysts' desired $1.29 billion.

In short, Wix is growing briskly -- just not as briskly as investors had hoped.