Updated from 9:44 a.m.

Wayfair, Inc. (W) - Get Report missed Wall Street estimates with its third-quarter earnings. Shares were down nearly 20% to $59.81 in trading at 12:21 p.m., EDT, Thursday, Nov. 2. 

Its current market cap is over $6.5 billion—that's $2 billion more than Williams-Sonoma, Inc. (WSM) - Get Report .

The furniture e-commerce company lost 65 cents per share in the third quarter ending Sept. 30, even more than analyst predictions of a 46-cent loss. Revenue reached $1.2 billion, on par with Street projections. But the kicker is the total revenue grew 42% year over year, and the number of active customers—10.3 million—reflects a 39% increase in the same period.

Wayfair has largely focused on growing house brands and scaling its supply chain network, executives said in the earnings call on Thursday. 

Wayfair is exceptional among furniture retailers for its free delivery, made possible by its own system of fulfillment and delivery centers. The retailer opened three last-mile delivery centers in Cleveland, Tampa and Denver, bringing its total to 15. These last-mile facilities are supplemented by Wayfair's CastleGate program, under which its own warehouses and inventory management allow Wayfair to guarantee two-day delivery.

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Wayfair is now expanding in Canada, the U.K. and Germany, where it just opened a major CastleGate warehouse.

This supply chain system "enables us to increase delivery speeds, reduce damage and costs and improve customer satisfaction across a greater and greater proportion of our business," said CEO Niraj Shah during the earnings call. "We expect to continue rolling out additional facilities in 2018."

Shah highlighted Wayfair's mobile functionationality. More than half of its traffic now comes from mobile, he said, as the company continues to develop mobile offerings. Apple Pay and an augmented reality function, for instance, are now available through the app.

Wayfair is also investing in advertisement, for which the retailer created its own tech arm of 60 engineers and data scientists to develop customer outreach algorithms and personalized messaging. 

"Our in-house server enables this personalized ad to be delivered in less than 40 milliseconds," said co-founder Steve Conine in the earnings call, who added that the technology is a way to up marketing and sales unavailable using third-party vendors.

Wayfair will maintain its current rate of growth, projecting a 33% to 35% rise in retail sales year over year.

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