Management characterizes 2026 as a ‘new chapter’ where AI investments are transitioning from experimental bets to measurable financial impact.
The acquisition of Base 44 has exponentially expanded the company’s Total Addressable Market (TAM) by moving beyond website building into the broader software application space.
Wix Harmony is driving improved conversion and monetization by blending visual editing with Vibe coding through a unified AI layer.
Base 44 reached approximately $100,000,000 in ARR just nine months post-acquisition, with new user acquisition reaching nearly two-thirds of the core Wix platform’s volume.
Performance in the core business was supported by 105% net revenue retention, despite persistent macro-driven Gross Payment Volume (GPV) headwinds affecting SMBs.
The company is seeing a strategic shift toward higher-tier subscriptions and business-oriented solutions, which increased as a share of the total mix in 2025.
Management attributes the rapid, organic adoption of Base 44 by enterprise-sized organizations to the platform’s strength in building customized CRM, ERP, and workflow tools without a dedicated sales team.
Full-year 2026 guidance assumes mid-teens percentage growth for both bookings and revenue, reflecting accelerated momentum from Wix Harmony and Base 44.
Free cash flow margin is projected in the low to mid-20% range, with the wider-than-normal range accounting for the ‘dynamic hyper-growth’ and investment needs of Base 44.
Management expects Base 44 gross margins to improve sequentially as they optimize AI inference costs through prompt caching, batching, and model routing.
The company plans to aggressively execute a $2,000,000,000 share repurchase program in 2026, citing a belief that current stock performance undervalues the business.
Guidance incorporates a material currency headwind on payroll expenses due to the U.S. dollar weakening against the Israeli shekel.
AI compute costs are currently front-loaded, as new users consume higher inference bandwidth during the initial software ‘build phase’.
Approximately one-third of Base 44’s AI inference costs are currently attributed to free users, though this is expected to decline as conversion rates improve.
A $250,000,000 equity investment from Durable Capital Partners was announced to support the long-term strategic plan and capital allocation goals.
Macroeconomic pressure on SMBs resulted in seasonally softer-than-anticipated GPV growth of 11% in the fourth quarter.
finance.yahoo.com
#Wix.com #Earnings #Call #Summary
