Wix.com Ltd.’s Earnings Calls Highlight BASE44 Pricing Shifts, AI Delays, and Growth Attribution Contradictions

Date of Call: Mar 4, 2026

Financials Results

• Revenue: Q4: $524M, up 14% YOY. Full Year: $1.993B, up 13% YOY.
• Gross Margin: Q4 non-GAAP gross margin: 68%, down slightly sequentially and YOY. Core Wix business gross margin improved.
• Operating Margin: Q4 non-GAAP operating income: 15% of revenue. Full Year non-GAAP operating margin declined modestly.

Guidance:

• Full year 2026 bookings and revenue expected to grow at mid-teens percentage YOY.
• Q1 2026 revenue expected to grow at a mid-teens percentage YOY.
• Full year 2026 free cash flow margin expected in the low to mid-20% range.
• Core Wix business expected to have solid bookings/revenue with flat to expanding free cash flow margin.
• Base44 growth expected to accelerate, with a focus on scaling to market leadership despite potential near-term margin pressure.

Business Commentary:

Revenue and Bookings Growth:

• Wix reported total bookings of $535 million in Q4, up 15% year-over-year, and total revenue of $524 million, up 14% year-on-year.
• Growth was driven by strong new cohort behavior, increased monetization, and outperformance in the Base44 segment.

Base44 Expansion:

• Base44 reached approximately $100 million in ARR, demonstrating rapid growth and becoming a significant contributor to Wix's overall performance.
• The expansion was fueled by increased brand awareness, effective marketing, and the application of Wix's successful subscription business model.

User Engagement and Retention:

• Net revenue retention for Wix stood at 105% in 2025, indicating strong user engagement and value capture despite macroeconomic pressures.
• This was attributed to higher conversion rates from free to paid subscriptions and increased monetization per user.

AI and Product Innovation:

• The introduction of Wix Harmony showed improved conversion and monetization metrics, with early performance exceeding expectations.
• This was due to the integration of AI capabilities that simplified complex technologies and enhanced the user experience.

Financial Outlook and Strategic Investments:

• Wix anticipates mid-teens percentage growth in bookings and revenue for 2026, with a focus on disciplined investments to unlock market potential.
• The company plans to complete its $2 billion stock repurchase program quickly, supported by a $250 million equity investment, reflecting strong strategic conviction.

Sentiment Analysis:

Overall Tone: Positive

• Management expresses strong optimism: '2026 is shaping up to be a defining year', 'I haven't been this excited to kick off a new year in a long time', 'we are confident in our strategy', 'we believe the real potential still lies ahead', 'Base44's user base is scaling rapidly', and 'we are thrilled to partner with them as we pursue our strategy, accelerate growth and create lasting value'.

Q&A:

• Question from Bradley Erickson (RBC Capital Markets): Can you rank contributors to organic growth in the full year bookings guide, such as payment volumes or subscriber mix shift or pricing?
  Response: No significant pricing changes assumed; guidance reflects growth from Wix core and Base44, with no extraordinary assumptions on GPV.

• Question from Bradley Erickson (RBC Capital Markets): What types of businesses are users setting up with Base44, and is there crossover with the core Wix platform?
  Response: Base44 sees a huge variety of usage, from personal projects to enterprise applications; no direct competition or user overlap with core Wix currently.

• Question from Josh Beck (Raymond James): Do you see trends persisting in segmentation between Base44 and Harmony, and how far upmarket will Base44 go?
  Response: Harmony is for self-creators; Base44's TAM is vast and expanding, with personal and professional use, and the company will work to win on both ends.

• Question from Josh Beck (Raymond James): Is the conversion of free users to paid in Base44 happening faster than anticipated?
  Response: Yes, conversion is increasing, and the portion of AI inference cost attributed to free users is expected to decrease over time as overall cost declines.

• Question from Hoi-Fung Wong (Oppenheimer & Company): What accelerated Base44 growth sequentially, and what are the base ARR bookings assumptions in the free cash flow guide?
  Response: Acceleration driven by strong demand and product innovation; ARR growth is a key indicator, and assumptions are optimistic, though not broken down separately from Wix.

• Question from Hoi-Fung Wong (Oppenheimer & Company): Did the core Wix business see any softness in Q4, and what drove acceleration?
  Response: Core Wix saw acceleration in Q4 (second half), driven by creative subscriptions, despite some modest GPV softness.

• Question from Andrew Boone (Citizens): How is LTV or payback period estimated for Base44, and how should we think about acquisition costs for 2026?
  Response: Base44 payback period is less than 1 year; the company is investing for growth, not gross margin optimization, and acquisition costs will be higher in 2026 to capture market share.

• Question from Deepak Mathivanan (Cantor Fitzgerald): What type of users are using Wix Harmony initially, and what benefits does the OpenAI partnership offer beyond website creation?
  Response: Harmony users range from personal websites to enterprises; OpenAI partnership enables Wix-built intelligence to interact with ChatGPT, creating new opportunities for AI agents and website navigation.

• Question from Trevor Young (Barclays): Why are premium subscriptions still negative in key markets like the U.S., and what is the churn among lower-value subs?
  Response: Strategy prioritizes higher-value subscriptions and cohorts, leading to lower net subs but increased cohort value over time.

• Question from Trevor Young (Barclays): How should we think about growth composition between self-creator and partner in 2026?
  Response: Self-creator business should be stable with Harmony accelerating new cohorts; partners have innovation opportunities and can use Base44, but current growth is more from Base44.

• Question from Mark Zgutowicz (Benchmark): What are early cohort KPIs for Harmony, and how do LLM partnership economics work?
  Response: Harmony shows better conversion, faster monetization, and higher ARPU; LLM partnership economics vary, but no significant impact assumed from the Wix inside ChatGPT integration currently.

• Question from Michael McGovern (Bank of America): What accelerated Base44's growth from ~$60M to ~$100M ARR quickly?
  Response: Growth driven by increased brand awareness (e.g., Super Bowl campaign), marketing execution, product improvements, and applying Wix's 20+ years of subscription business learnings.

• Question from Michael McGovern (Bank of America): How can free token costs for Base44 trials be managed long-term?
  Response: The company will test and optimize the freemium model over time, balancing user acquisition with cost control, similar to the Wix model.

Contradiction Point 1

BASE44's Business Model and Growth Strategy

Contradiction on pricing model experimentation and focus on financial margins versus market share.

What were Andrew Boone's key insights from Citizens regarding the earnings call? - Andrew Boone (Citizens)

20260304-2025 Q4: The company is conservative with guidance. The focus is on investing for growth (not gross margin optimization)... Acquisition costs in 2026 will be higher than the ~$30M in 2025, as the company aims to capture market share and scale. - [Lior Shemesh](CFO)

How are you estimating LTV and payback period for Base44 with a <1-year payback, and how should we think about acquisition costs in 2026 within the free cash flow guide? - Josh Beck (Raymond James & Associates, Inc.)

2025Q3: It's still very early for BASE44 pricing. The company will continue testing and optimizing to balance financial margins with the top priority of capturing market share. - [Nir Zohar](COO)

Contradiction Point 2

Timeline for AI-Powered Website Creation Tools

Contradiction on the launch timeline for the self-creator website tool powered by AI.

Deepak Mathivanan (Cantor Fitzgerald) - Deepak Mathivanan (Cantor Fitzgerald)

20260304-2025 Q4: Harmony is being used by all previous Wix users... Currently, it does not support databases, but that will come later. - [Avishai Abrahami](CEO)

What user segments are initially adopting Wix Harmony, how is it impacting sophistication, and what are the OpenAI partnership's benefits beyond app integration for ChatGPT on Wix sites? - Trevor Young (Barclays Bank PLC)

2025Q3: The delay is due to fine-tuning new AI technologies... The product is now in a closed internal beta and is expected to launch in early 2026 as a much better product. - [Avishai Abrahami](CEO)

Contradiction Point 3

Product Competition and Segmentation

Contradiction on whether Base44 competes with or serves a different need than the core Wix platform.

Bradley Erickson (RBC Capital Markets) - Bradley Erickson (RBC Capital Markets)

20260304-2025 Q4: There is no direct competition with Wix's core platform, as usage patterns are mostly different. Harmony is designed for self-creators, while Base44's TAM is vast and expanding. - [Avishai Abrahami](CEO)

Can you rank the contributors to organic growth in the 2026 bookings guide (e.g., payment volumes, subscriber mix shift, pricing) and provide details on the types of businesses/apps built with Base44 and any crossover with the core Wix platform? - Hoi-Fung Wong (Oppenheimer & Co. Inc.)

2025Q2: Base44 will be kept separate as it serves very different user needs (prototyping/applications vs. websites). Vibe coding is not the best solution for websites, and maintaining separation aligns with product intent. - [Avishai Abrahami](CEO)

Contradiction Point 4

Primary Driver of Bookings/ARR Growth

Contradiction on whether Base44 or core Wix user cohorts are the main driver of growth guidance.

Hoi-Fung Wong (Oppenheimer & Company) - Hoi-Fung Wong (Oppenheimer & Company)

20260304-2025 Q4: Base44's acceleration to $100M ARR reflects strong brand awareness... The company does not break down bookings between Wix and Base44 separately due to synergy; ARR growth is a good indicator. - [Lior Shemesh](CFO)

What factors accelerated Base44's sequential growth, what is the base ARR/booking outlook for 2026 in the free cash flow margin guide, and how did the core Wix business perform in Q4? - Hoi-Fung Wong (Oppenheimer & Co. Inc.)

2025Q2: The guidance raise is primarily driven by overachieving new user cohorts, the strongest since peak COVID. Base44 contributes but is not the majority. - [Menashe Lior Shemesh](CFO)

Contradiction Point 5

Growth Outlook for Partners vs. Self-Creators

Guidance shifts from expecting modest partner growth to projecting a future revenue stream for them.

What questions do you have for management? - Trevor Young (Barclays)

20260304-2025 Q4: Partners currently see modest growth, but Base44 presents a future revenue stream for them. - [Lior Shemesh](CFO)

What is the expected 2026 growth composition between self-creator and partner? - Sang-Jin Byun (Jefferies) – for Brent Thill

2025Q1: Partners remain a key growth driver; strong adoption of Studio and business solutions continues. - [Lior Shohar](President) & [Avishai Abrahami](CEO)