Q2 2026 Wix.Com Ltd Earnings Call Transcript
Key Points
- Wix.com Ltd (WIX) launched Base 1, its proprietary LLM, which improves product quality, reduces costs, and creates a proprietary data asset that compounds over time.
- Base44 gross margin improved dramatically from near 0% at the start of 2026 to approximately 60% in the second half, driven by Base 1 and cost optimization.
- Self-creators revenue growth accelerated sequentially to 14% year-over-year, with strong Base44 performance and encouraging Wix Harmony results.
- Base44 demand remains elevated, with new cohorts outperforming previous ones and increasing adoption of annual plans, indicating growing user trust and durability.
- The company is strategically reinvesting gross margin savings into sales and marketing to capture market share in the AI-powered app creation space, reflecting confidence in long-term growth.
- Wix.com Ltd (WIX) is leveraging its data science expertise to rapidly develop and deploy in-house AI models, reducing reliance on external vendors and improving cost structure.
- Total non-GAAP gross margin declined 3 points year-over-year due to elevated investments in Base44 and AI compute costs.
- Non-GAAP operating income margin was only 12% of revenue, pressured by elevated sales and marketing expenses and AI inference costs for free Base44 users.
- Bookings growth (12%) lagged revenue growth (15%), and the company expects this trend to continue, indicating potential future revenue deceleration.
- The wind-down of subsidiary InkFrog negatively impacted GPV growth, which grew only 3% year-over-year.
- The company is extending its TROI target, meaning it will take longer to recoup marketing investments, which could pressure near-term profitability.
- Partners business growth was in line with lowered expectations, and the company is still testing new solutions to align with the evolving ecosystem, indicating uncertainty in this segment.
Good morning and thank you for standing by. Welcome to the Wix second quarter conference call. (Operator Instructions) Please be advised that today's conference call is being recorded.
I would now like to hand the conference over to your first speaker today, Emily Liu, Investor Relations. Please go ahead.
Thanks, and good morning, everyone. Welcome to Wix's second-quarter 2026 earnings call. Joining me today to discuss our results are Avishai Abrahami, CEO and Co-founder; Nir Zohar, President and Co-Founder; and Lior Shemesh, our CFO.
During this call, we may make forward-looking statements, and these statements are based on current expectations and assumptions. Please consider the risk factors included in our press release and most recent Form 20-F that could cause our actual results to differ materially from these forward-looking statements.
We do not undertake any obligation to update these forward-looking statements except as required by law. In addition, we will comment on non
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