Wix Reports Growth, But Shares Remain Under Pressure

Wix shares are currently trading at a price about 83% lower than the peak recorded at the end of 2021. Anyone who bought the stock at the beginning of 2026 is sitting on a loss of about 45%. And anyone holding for a year is down 56%. These are not the numbers of a company undergoing a correction — these are the numbers of a company whose right to exist the market is fundamentally re-examining.

And that is before mentioning the infamous share buyback: Wix paid $92 per share to acquire about 30% of its shares at once, in a $2 billion move intended to project self-confidence. The stock is currently trading around $60. Wix bet on itself and lost about 35%.

After all this, the reports for the second quarter of 2026 were a pleasant surprise, at least on the top line.

Quarterly revenue totaled $563.1 million, an increase of 15% compared to the same period last year — and about $10 million above analyst forecasts. Total ARR at the end of the quarter stood at $1.963 billion, a growth of 15% compared to the same quarter last year. Wix also beat expectations on the adjusted profit (Non-GAAP) line: a profit of $1.39 per share compared to a forecast of $1.21.

But as always with Wix lately, it is important to look at what is hidden beneath the headlines.

In the previous quarter — the first quarter of 2026 — a question arose that troubled many investors: about 75% of the growth in ARR came from Base44, the AI app-building startup that Wix acquired a little over a year ago. Wix's own organic activity barely moved.

Wix did not provide data this time regarding Base's ARR growth, but it can be assumed that it still constitutes a significant part of its growth. Alongside this, Wix showed improvement in the partner business — agencies and independent developers who build websites for business clients and are a key growth engine — which grew by 17% compared to the same quarter, after showing a "disappointing start to the year" in the previous quarter, in the words of management itself.

Base44 itself continues to grow at a pace that many companies dream of. According to previous reports, it reached $150 million in ARR in May, and according to management, the trend continues and has even accelerated relative to forecasts.

However, there is a paradox here that Wix is dealing with: Base44 is partially cannibalizing the traditional partner business — because small businesses that once would have ordered a site from an agency now simply build it themselves with AI.

Wix paid a price for Base44 that continues to rise. The deal was initially reported as $80 million, but the agreement included performance-based milestones that significantly increase its cost. Current reports reveal an additional payment of $41 million for exceeding targets — and in total, the deal value has already crossed at least the $150-200 million threshold, with future payments that have not yet been finalized.

And beyond the acquisition cost, Base44 was expensive to operate. The high computing costs of AI models, combined with aggressive marketing investments required to grow fast in a competitive market, brought Base44's gross profit margin to near zero at the beginning of 2026.

Good news: Wix estimates that the launch of Base1 — a dedicated language model developed by Base44 itself — is expected to dramatically reduce inference costs and bring Base44's gross profit margin to about 60% in the second half of 2026, compared to almost zero at the beginning of the year. If this materializes, it is a fundamental change.

When looking at the reports according to GAAP, the picture is much less comfortable. In the second quarter, a net loss of $76.4 million was recorded — compared to a profit of $57.7 million in the same period last year. For the first half as a whole: a loss of $133.8 million, compared to a profit of $91.5 million in the first half of 2025. This reversal — from profit to loss — illustrates how painful this year is.

The losses stem from several directions: layoff expenses of $27 million recorded in the second quarter, costs related to the Base44 acquisition that stood at $41 million for the quarter, and marketing costs that jumped by 67% compared to the same quarter — $173 million intended to fuel Base44's growth and maintain share in the heating-up market of AI app building.

Cash flow also points to the pressure: free cash flow of $52.6 million for the quarter, a sharp drop from $147.7 million in the same period last year. Excluding layoff expenses — $61.2 million, still only about a third of last year's figure.

At the end of the quarter, Wix held about $961 million in cash, deposits, and securities. Against them: a debt of $1.63 billion — including $1.13 billion in convertible bonds and $500 million in a credit facility taken to finance the share buyback. A net debt of over $670 million, in a company whose cash flow has already dropped sharply.

This is the real price of the "self-confidence" that Wix management tried to project with the share buyback.

For the third quarter, Wix expects growth in the low double digits in revenue — meaning a pace similar to the current quarter or slightly lower. The annual forecast has not changed from the downward update given about two months ago: growth of "Low to Mid-Teens". With an expected annual cash flow of $420 million.

The good news, if it materializes, lies in Base44: improving its gross profitability in the second half may improve Wix's overall margins, and prove that the acquisition, whose price kept rising, is worth the investment.

But the basic question remains: when will Wix's own organic activity — outside of Base44 — return to growing on its own? As long as the original platform depends on an external acquisition to show numbers, investors will continue to ask this question, and not without reason.