Wix’s first quarter results were met with a strongly negative market reaction, as adjusted earnings and operating income fell considerably short of Wall Street expectations despite revenue landing in line. Management attributed the quarter’s underperformance to a deliberate increase in sales and marketing spend—especially for the BASE44 platform and Super Bowl advertising—as well as lower-than-expected growth in the partners channel. CFO Lior Shemesh described the margin pressure as “near-term” and tied to investments intended to drive future growth, while President Nir Zohar highlighted that “certain product timelines for our partners audience have been pushed out” due to operational challenges in Israel.
Is now the time to buy WIX? Find out in our full research report (it’s free for active Edge members).
Wix (WIX) Q1 CY2026 Highlights:
- Revenue: $541.2 million vs analyst estimates of $543.6 million (14.3% year-on-year growth, in line)
- Adjusted EPS: $0.68 vs analyst expectations of $1.22 (44.2% miss)
- Adjusted Operating Income: $27.79 million vs analyst estimates of $68.76 million (5.1% margin, 59.6% miss)
- Operating Margin: -12.9%, down from 7.9% in the same quarter last year
- Annual Recurring Revenue: $1.90 billion (38.7% year-on-year growth)
- Billings: $585 million at quarter end, up 14.5% year on year
- Market Capitalization: $2.24 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Wix’s Q1 Earnings Call
- Josh Beck (Raymond James) questioned the sustainability of BASE44 momentum and the outlook for the partners channel rebound. President Nir Zohar explained BASE44’s diverse use cases and acknowledged that partners growth is “definitely tied to the product cycle” and will require catching up on delayed launches.
- Deepak Mathivanan (Cantor) inquired about Wix’s proprietary AI model costs and deployment plans for BASE44, as well as whether partners are adopting external AI tools. Zohar responded that internal models significantly reduce costs and improve quality, while some partners are using Harmony and highlighting areas for further improvement.
- Unknown Analyst (Jefferies) asked about the extent of partner adoption of BASE44 and whether there are emerging synergies between BASE44 and core Wix. Zohar confirmed “a decent amount” of partners are using BASE44 and sees potential for deeper integration and dual usage in the future.
- Trevor Young (Barclays) wanted details on the cost of developing Wix’s proprietary LLM and ongoing model training expenses. Zohar indicated the expense was “quite small” relative to large frontier models and that ongoing improvement will not weigh heavily on costs.
- Bradley Erickson (Arvest Capital) pressed on competitive risks from other AI-centric platforms and customer growth visibility. Zohar acknowledged “healthy competition” but argued that Wix and BASE44 maintain leadership in key markets and that competition is driving continuous product improvement.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will track (1) the pace of margin recovery as AI-driven cost efficiencies are realized and marketing spend normalizes, (2) any signs of renewed growth in the partners channel as delayed product launches materialize, and (3) continued monetization progress for new user cohorts and BASE44. Progress in integrating proprietary AI models and the impact of new product launches will also be important indicators of execution.
Wix currently trades at $53.68, down from $75.88 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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