Wix Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Revenue Growth: Q2 revenue increased by 15% year-over-year, driven by strong performance in BASE44 and the core Wix business.

Bookings Growth: Bookings grew by 12% year-over-year.

Self-Creators Revenue: Accelerated to 14% year-over-year growth, supported by improved conversion from free to paid users and stable retention.

Partners Revenue: Grew by 17% year-over-year, with increased contributions from BASE44.

Gross Margin: Total non-GAAP gross margin was 67%, slightly up sequentially but down 3 points year-over-year due to elevated investments in BASE44 and AI compute costs.

Operating Income: Non-GAAP operating income was 12% of revenue, impacted by higher sales and marketing expenses.

Cash Position: Ended Q2 with approximately $960 million in cash and equivalents and $1.63 billion in debt.

2Strategic Updates and Business Highlights

AI Product Development: Launched Base1, a proprietary LLM, enhancing control over quality and cost structure. This model is expected to improve BASE44's gross margin from near 0% to approximately 60% in the second half of the year.

Dual Strategy: Wix is pursuing two paths in AI: Wix Harmony for self-creators and BASE44 for natural language and app creation, allowing flexibility in capturing market demand.

Market Positioning: Wix aims to deepen its role in the AI ecosystem, focusing on user experience and continuous platform evolution.

3Forward Guidance and Outlook

Revenue Guidance: Maintaining guidance for low to mid-teens revenue growth for the full year, with Q3 revenue expected to grow at a low double-digit percentage.

Bookings Outlook: Anticipating bookings growth to lag revenue growth by a few points, with a target of low teens percentage growth.

Free Cash Flow Margin: Expected to be in the high teens for the full year, assuming reinvestment of gross margin improvements into BASE44 marketing.

4Bad News, Challenges, or Points of Concern

Gross Margin Pressure: Year-over-year gross margin decline due to increased investments and AI costs, although improvements are expected in the second half.

Competitive Landscape: Concerns about competition from frontier AI models and the evolving market dynamics, particularly with partners migrating to BASE44 from Wix Studio.

Dependence on AI: The business's future growth is heavily reliant on the successful adoption and performance of AI-driven products, which introduces execution risk.

5Notable Q&A Insights

Base1 Model: The in-house training of Base1 is expected to yield better results than external models for BASE44 applications, with ongoing improvements anticipated.

Partner Ecosystem: There is a growing appetite for AI solutions among partners, but the shift from Wix to BASE44 is still in early stages, making it challenging to predict long-term trends.

Renewal Behavior: While early annual cohorts for BASE44 are approaching renewal, the company is cautious about commenting on renewal rates until more data is available.

TROI Framework: The company is willing to extend its TROI targets to capture market opportunities, but does not foresee significant changes in the near term.

Market Share Dynamics: Wix is reportedly ahead of competitors like Lovable in the U.S. market, but quantifying the exact share is difficult due to the private nature of competitors’ data. This summary encapsulates Wix's financial performance, strategic initiatives, and outlook while addressing potential challenges and insights from the Q&A session.