Wix.com (NASDAQ:WIX) executives said the company delivered solid first-quarter 2026 growth while accelerating investments in artificial intelligence products, including Wix Harmony and Base44, during the company’s earnings call.
President and Co-founder Nir Zohar said the company is focused on using AI to expand its position in online creation, arguing that long-term winners in the category will need both technical infrastructure and product depth. He said Wix has been building toward AI-enabled website creation for years, citing the 2016 launch of Artificial Design Intelligence and the more recent rollout of Wix Harmony.
Revenue and bookings rise in the first quarter
Chief Financial Officer Lior Shemesh said total bookings in the first quarter were $585 million, up 15% year-over-year, while total revenue was $541 million, up 14%. He attributed the top-line performance to strong new cohort behavior, retention among existing core Wix users and outperformance from Base44.
The company’s first-quarter 2026 user cohort totaled 6.4 million users, including Base44. Zohar said that cohort generated nearly $52 million in bookings in its first three months, a 46% increase from the first-quarter 2025 cohort’s first three months. Excluding Base44, he said core Wix users still produced healthy bookings, with growth nearly as strong as the year-earlier cohort despite a slightly smaller user base.
Zohar said improved conversion of new users into paid subscriptions was driven by Harmony, which was rolled out in late January across Wix’s main geographic markets. He also said monetization improved as users purchased higher-priced subscriptions and attached more business solutions.
Base44 momentum drives investment
Wix executives highlighted continued momentum from Base44, which Zohar described as the largest AI-powered app creation platform in North America by market share. He said Base44 reached $150 million in annual recurring revenue in mid-May, up from $100 million in ARR in early March.
Zohar said Wix “went all in” on capturing Base44’s top-of-funnel demand during the quarter, increasing marketing spending for the product. He said retention is improving as more users choose annual subscriptions through new purchases or renewals, while monetization is also increasing.
Acquisition marketing spend for Base44 and core Wix, excluding Super Bowl expenses and AI costs tied to free users, totaled about $90 million in the quarter. Zohar said the expected time to return on that spending is seven to nine months.
In response to analyst questions, Zohar said Base44 is seeing a wide range of use cases, including personal use, solopreneurs and small businesses. He also said some Wix Partners are using Base44, and that the product could eventually help Partners build custom applications for business clients.
AI model development and costs in focus
Zohar said Wix has built and deployed its first proprietary large language model, designed specifically to power the design engine of Wix Harmony. He said internal testing shows the model is faster than alternatives, produces fewer errors and delivers better outcomes for users building Harmony websites.
He also said owning the model gives Wix more control over product development and lowers inference costs as Harmony scales. In response to an analyst question, Zohar said the cost of building the Harmony model was “quite small” and not comparable to the spending associated with large frontier models.
Shemesh said Wix is working to reduce AI costs by optimizing third-party model usage, using open-source models and building its own models. He said AI-related costs are expected to remain minimal in the core Wix business, with gross margins there relatively unchanged for the rest of 2026.
For Base44, however, Shemesh said the company continues to incur elevated AI compute costs as it scales to meet demand. He said these costs are front-loaded because users consume more AI inference capacity during the initial build phase. Still, he said Base44’s standalone gross margin is already positive and is expected to improve significantly quarter-over-quarter through the year.
Partners growth slows as product work continues
Executives said the Partners business grew more slowly than expected during the quarter. Shemesh said Partners growth was 19% year-over-year but reflected a deliberate pullback in Studio marketing efforts over recent quarters.
Zohar said smaller Partner cohorts added over the past few quarters have shifted Wix’s user mix toward self-creators and away from Partners. He said the dynamic is expected to remain a drag on Partners bookings and revenue growth while Wix realigns marketing strategy and builds platform and product enhancements for that audience.
Zohar also said the war in the Middle East that began in late February has affected the company’s productivity, noting that more than 60% of Wix employees are located in Israel. He said employees and their families are safe, but some Partner product timelines have been pushed out as a result.
Guidance maintained despite margin pressure
Wix maintained its full-year 2026 outlook, with bookings and revenue expected to grow at a mid-teens percentage year-over-year. For the second quarter, the company also expects revenue growth in the mid-teens percentage range, similar to the first quarter.
First-quarter non-GAAP gross margin was 66%, down sequentially and year-over-year, primarily due to Base44 investments. Non-GAAP operating income was 5% of revenue, reflecting higher sales and marketing expenses. Shemesh said first-quarter sales and marketing included approximately $24 million for the purchase and production of Super Bowl ads for both Base44 and Wix Harmony, which he described as a one-time cost for the year.
Free cash flow was $112 million in the first quarter, equal to 21% of revenue. For the full year, Wix expects free cash flow margin excluding acquisition-related expenses to be in the high teens. Shemesh said that includes the effect of foregone interest income from cash used in the tender program and interest expense on a new $500 million credit facility. On a pre-tender capital structure basis, he said full-year free cash flow margin would be in the low- to mid-20% range.
The company also cited a $64 million expected foreign exchange headwind on its full-year expense base, primarily in the second half, due to the strengthening of the Israeli shekel against the U.S. dollar.
Wix completed a modified Dutch auction tender offer in April, repurchasing approximately 18 million shares for $1.6 billion. Zohar said the repurchase reduced the company’s equity base by nearly 30%. Shemesh said Wix is now in a net debt position following the tender offer and aims to return to a net cash position efficiently.
About Wix.com (NASDAQ:WIX)
Wix.com Ltd. operates a cloud-based platform that enables individuals and businesses to create, manage and develop professional web presences through an intuitive drag-and-drop interface. The company’s software-as-a-service model provides hosting, customizable templates and a range of design tools, eliminating the need for coding expertise. Users can choose from a variety of premium plans to access custom domains, enhanced storage, and advanced performance features tailored to personal projects, small businesses and online storefronts.
Beyond its core website builder, Wix offers a suite of complementary services designed to support digital growth and marketing.
