NASDAQ:WIX

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Wix Slips 0.7% as Base44 Growth Accelerates but Free Cash Flow Outlook Is Cut

Wix*com (NASDAQ: WIX) shares fell about 0.7% after the company reported solid third-quarter growth and strong momentum at Base44, but lowered its full-year free cash flow margin outlook as it accelerates investment.

Third-quarter revenue rose 13% year over year to $570.2 million, while bookings increased 11% to $573 million. Total ARR reached $2.02 billion, up 15%, with Base44 approaching $250 million of ARR.

Base44 remained the key growth driver. Its non-GAAP gross margin improved to 58% from near zero in the first quarter, and Wix still expects the business to exit 2026 above 60%. Management also said retention among early Base44 cohorts has exceeded expectations, while renewal rates continue to improve.

Profitability was mixed. Wix reported a GAAP net loss of $13.7 million, but non-GAAP net income was $69.3 million. Free cash flow totaled $74.5 million, or $99.6 million excluding restructuring costs.

The main negative was guidance. Wix maintained its full-year revenue and bookings growth outlook but cut expected free cash flow margin excluding acquisition-related and restructuring costs to about 16% from the previously anticipated high-teens range. The reduction reflects heavier sales and marketing investment behind Base44.

Wix also expects fourth-quarter bookings growth to continue lagging revenue growth due to softness in Partners, while a roughly $10 million working-capital headwind is expected from GPU prepayments.

The modest decline appears to reflect concern over lower near-term cash flow margins and continued investment intensity, partly offset by strong Base44 growth, improving AI economics and solid top-line momentum.
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Author
WS Investor 11-10-26
Wix Crashes 24% as Massive EPS Miss and $1.6 Billion Buyback Costs Shock Investors

May 13, 2026 | NASDAQ: WIX

Wix is suffering one of the sharpest single-day declines in software today, down 24% and hitting a new 52-week low, after a quarter that missed Wall Street expectations on both the top and bottom line while revealing the full financial cost of its controversial buyback program.

Revenue came in at $541.2 million, up 14% year-on-year but below the analyst consensus of $544.2 million. More damaging was the earnings miss — adjusted EPS of $0.68 fell far short of the $1.25 consensus expectation. Non-GAAP operating margin collapsed to 5%, down from 21% in the prior-year quarter, as the buyback's financing costs and acquisition expenses hit the P&L hard.(Yahoo Finance, StockStory)

The root cause of the earnings miss is the $1.6 billion modified Dutch Auction tender offer completed in early April, which repurchased approximately 30% of shares outstanding at $92 per share. The deal was funded through cash reserves and a new $500 million credit facility, and the combined effect — foregone interest income, new interest expense, and acquisition-related costs — obliterated near-term profitability. Adjusted operating income came in at $27.79 million against analyst expectations of $68.76 million, a 59.6% miss.

The business itself has genuine bright spots. New user cohort bookings surged 46% year-on-year, Base44 is performing well, and Wix has built a proprietary LLM now powering its Harmony platform. But the Partners business disappointed, with management citing a slower-than-expected start compounded by productivity disruptions from the Middle East war delaying professional-focused product rollouts.

Full-year guidance was maintained at mid-teens revenue growth — not raised, despite Base44 outperformance. Full-year FCF margin is expected in the high-teens due to reduced interest income, credit facility costs, and a meaningful Israeli shekel headwind estimated at approximately $64 million net of hedging.

The buyback dramatically reduced the share count, which should amplify per-share earnings power if growth reaccelerates. But executing a $1.6 billion capital deployment into a leveraged buyback while missing earnings by 46%, managing war-related disruptions, and guiding to margin compression is a combination the market is not willing to forgive today.
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Author
The Investor 05-13-26