What happened

Shares of Wix.com (WIX -1.02%) surged more than 20% last week after the website-development platform reported significant progress toward its profitability and cash flow production goals, according to data from S&P Global Market Intelligence.

So what

Wix's revenue rose 8% year over year to $345.8 million in the third quarter, fueled by rising usage of its premium website-building and e-commerce offerings.

Wix's creative subscriptions grew by 8% to $261.1 million. The company's business solutions revenue also increased 8% to $84.7 million, with transaction revenue jumping 12% to $36 million.

"Wix continues to be the preferred platform for millions globally," CEO Avishai Abrahami said in a press release. "Demand for building, maintaining, and growing an online presence remains healthy, driving strong business fundamentals for Wix this quarter."

Moreover, cost-cutting initiatives helped to bolster Wix's profitability. Its adjusted gross margin improved to 65% from 63% in the year-ago quarter. That helped Wix produce an adjusted net income of $3.6 million, or $0.06 per share, compared to a net loss of $12.3 million, or $0.21 per share, in the prior-year period.

Better still, Wix's adjusted free cash flow soared 174% to $4.6 million.

Now what

Chief financial officer Lior Shemesh expects Wix's adjusted free cash flow to grow to as much as $50 million in the fourth quarter. Shemesh also said the company is on track to achieve its longer-term goal of $500 million in annual free cash flow by 2025.

Wix intends to use some of this cash to reward its shareholders with a sizable new stock buyback program. "Confident in our ability to generate cash flow, our board authorized a $300 million share repurchase plan, underscoring our commitment to increasing shareholder value," chief operating officer Nir Zohar said.