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Total Bookings: $585 million, up 15% year-over-year. Total Revenue: $541 million, up 14% year-over-year. Gross Margin: 66%, reflecting stable margins in core Wix business but impacted by investments in BASE44. ARR for BASE44: $150 million achieved in mid-May. GDV: $3.8 billion, up 12% year-over-year. Non-GAAP Operating Income: 5% of revenue. Free Cash Flow: $112 million, representing 21% of revenue. Sales and Marketing Expenses: Included $24 million for Super Bowl ads. Time to Return on Investment (TROI): 7 to 9 months for $90 million marketing spend. Full Year Revenue Growth Guidance: Mid-teens percentage year-over-year. Full Year Free Cash Flow Margin Guidance: High teens, excluding acquisition-related expenses. FX Headwind: $64 million impact on full year expense base due to Israeli shekel strength.
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Release Date: May 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Wix.com Ltd (NASDAQ:WIX) achieved a significant milestone by deploying its first proprietary LLM, which is faster and more efficient than alternatives, enhancing the Harmony platform. The company reported a 46% increase in bookings from the new Q1 2026 user cohort compared to the previous year, indicating strong demand for its offerings. BASE44, acquired by Wix.com Ltd (NASDAQ:WIX), achieved $150 million in ARR by mid-May, demonstrating robust growth and market leadership in North America. Wix.com Ltd (NASDAQ:WIX) successfully completed a $1.6 billion share repurchase program, returning significant value to shareholders. The company is leveraging AI to optimize internal processes, such as reducing customer care headcount by over 40% while maintaining service quality.
Negative Points
Wix.com Ltd (NASDAQ:WIX) experienced slower-than-expected growth in its partners' business due to a deliberate pullback in marketing efforts. The ongoing conflict in the Middle East has impacted productivity, delaying product timelines for the partners' audience. The company faces elevated AI compute costs as it scales BASE44 to meet demand, impacting gross margins. Wix.com Ltd (NASDAQ:WIX) is dealing with a $64 million FX headwind due to the strengthening of the Israeli shekel against the US dollar. The company is now in a net debt position following the completion of its share repurchase program, impacting its cash flow outlook.
Q & A Highlights
Q: What are some standout use cases for BASE44, and how does it add to the core business? Also, how should we think about the partner channel's rebound? A: Nir Zohar, President of Wix, explained that BASE44 is seeing a wide variety of use cases, including personal and small business applications. It expands the top of the funnel and aligns closely with Wix's core offerings. The partner channel's rebound is tied to the product cycle, with a focus on self-creators and BASE44 in recent quarters. Product offerings are being adjusted to meet changing partner needs.
Story Continues
Q: Can you discuss the development of your own LLM and its impact on inference costs? Also, how is the partner business adapting to AI platforms? A: Nir Zohar stated that their proprietary LLM significantly reduces inference costs compared to frontier models and offers better quality control. While there's no exact timeline for deploying a similar model for BASE44, it's a priority. Partners are using AI platforms, including Harmony, and are providing feedback on missing capabilities, which helps guide future innovations.
Q: How widespread is the adoption of BASE44 among partners, and are there synergies between BASE44 and Wix? A: Nir Zohar noted that there is a decent amount of partner usage on BASE44, which could become a deeper trend. The synergy between BASE44 and Wix allows partners to enhance their offerings and create custom applications, which is beneficial for both platforms.
Q: Can you provide details on the costs associated with developing your LLM and the current cash position after the tender offer? A: Nir Zohar mentioned that the cost of developing the Harmony LLM was quite small and manageable. Lior Shemesh, CFO, confirmed that after the tender offer, Wix has approximately $900 million in cash and cash equivalents, not accounting for near-term cash generation.
Q: How should investors view the competitive risk from other platforms, and what are the interest income and expense expectations with the new capital structure? A: Nir Zohar acknowledged the competitive landscape but emphasized that Wix and BASE44 are not currently under significant pressure from larger platforms. Lior Shemesh explained that the difference in free cash flow guidance is due to interest expenses from the loan and lost interest income from the buyback, totaling approximately $100 million.
Q: Can you quantify the sales and marketing step-up, particularly the Super Bowl costs, and expectations for acquisition earn-outs? A: Nir Zohar stated that the Super Bowl ads cost over $20 million and are a one-time expense. Sales and marketing expenses will decrease in the second quarter. Regarding acquisition earn-outs, provisions will increase based on milestones set in the M&A agreement.
Q: How is BASE44 usage evolving among partners, and what are the expectations for BASE44's gross margin improvement? A: Nir Zohar indicated that it's early to predict BASE44's impact on partner growth, but it has potential. Lior Shemesh noted that BASE44's gross margin is improving significantly, with optimization efforts reducing costs. A positive change is expected throughout the year.
Q: Can you discuss the contribution of BASE44 and Harmony to new cohort bookings growth and top of funnel expansion? A: Nir Zohar highlighted that both BASE44 and Wix contributed to new cohort growth, with BASE44 becoming a larger contributor. The top of funnel is expanding, driven by Harmony's positive reception and ongoing improvements.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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