WIX Q2 Earnings Beat Expectations, Revenue Rises Y/Y on Base44 Strength

Total ARR climbed 15% to $1.96 billion, while bookings increased 12% to $569.1 million.

WIX's Subscription Growth Stays Firm

Creative Subscriptions revenues increased 15% year over year to $398.4 million. Bookings from the segment advanced 11% to $405.8 million. Continued Base44 strength supported both measures, while Wix Harmony began making an early contribution as the product continued to ramp.

Self Creators' revenues rose 14% to $349.3 million, improving from 12% growth in the prior quarter. Partners' revenues increased 17% to $213.8 million and represented 38% of total revenues. Wix ended the quarter with nearly 317 million registered users.

Wix Expands Business Solutions Momentum

Business Solutions revenues grew 14% year over year to $164.7 million, while segment bookings rose 13% to $163.3 million. Adoption of Google Workspace and the Paid Ads offering boosted the performance.

Transaction revenues advanced 12% to $71.5 million and accounted for 43% of Business Solutions revenues.

Gross payment volume increased 3% to $3.6 billion, while the take rate improved to 1.96%. The wind-down of a commerce subsidiary slowed payment volume growth, and management expects that headwind to persist for four more quarters.

WIX Margins Reflect Elevated AI Spending

The non-GAAP gross margin was 67%, down from 70% a year ago. Creative Subscriptions margin fell to 80% from 85%, reflecting a greater Base44 contribution, while Business Solutions margin remained stable at 33%.

Non-GAAP research and development expenses rose 6% to $104.7 million, or 19% of revenues, as Wix expanded the Base44 team. Selling and marketing expenses jumped 67% to $173.1 million, or 31% of revenues, on heavier Base44 advertising and higher inference costs for free users.

Non-GAAP operating income was $64.8 million, translating into a 12% margin.

Wix Sharpens Base44's Cost Structure

Base44 launched Base 1, its proprietary large language model built for software creation. Management expects greater control over inference technology to shorten product iteration cycles, reduce reliance on external vendors and improve long-term cost efficiency.

Base44's non-GAAP gross margin is expected to reach roughly 60% in the second half of 2026 compared with near zero at the start of the year. Total AI costs are projected at 30-40% of Base44 bookings. The resulting savings are expected to lift consolidated non-GAAP gross margin by about two percentage points in the second half versus the first half.

Base44 also introduced expanded AI Workflows and enterprise governance features, including single sign-on improvements, permissions, connector management and customer-managed databases. Wix Headless added connections to Claude Code, Codex and Base44, extending Wix's business infrastructure to AI-generated front ends.

WIX Cash Flow and Outlook Remain Encouraging

Operating cash flow totaled $55.6 million, while capital expenditures were $2.9 million. Free cash flow came in at $52.6 million. Excluding restructuring costs, free cash flow was $61.2 million, or 11% of revenues. Wix ended June with $960.9 million in cash and equivalents and $1.63 billion in short- and long-term debt.

WIX maintained its 2026 outlook for low- to mid-teens revenue growth, low-teens bookings growth and a high-teens free cash flow margin excluding acquisition and restructuring costs.

Third-quarter revenues are expected to grow at a low-double-digit rate. Management also expects the consolidated non-GAAP operating margin to improve in the second half as lower AI and core Wix marketing costs offset additional Base44 investment.

WIX’s Zacks Rank

Currently, Wix carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Firms

Exelon Corporation EXC reported second-quarter 2026 adjusted operating earnings of 43 cents per share, in line with the Zacks Consensus Estimate. Earnings increased 10.3% from 39 cents in the year-ago quarter. Higher distribution and transmission rates across several utilities supported the improvement. Revenues totaled $5.97 billion, beating the Zacks Consensus Estimate of $5.66 billion by 5.46%.  The top line increased 10% from the year-ago figure of $5.43 billion.

Edison International EIX reported second-quarter 2026 core earnings of $1.54 per share, beating the Zacks Consensus Estimate of $1.02 by 51%. The bottom line surged 58.8% from 97 cents in the year-ago quarter, primarily reflecting Southern California Edison’s adoption of the 2025 General Rate Case final decision. Edison International's second-quarter operating revenues totaled $4.36 billion, which missed the Zacks Consensus Estimate of $4.72 billion by 7.7%. The top line also decreased 4.1% from the year-ago quarter’s figure of $4.54 billion.

DTE Energy Company DTE delivered second-quarter 2026 earnings per share of $1.32, beating the Zacks Consensus Estimate of $1.14 by 15.8%. The bottom line, however, decreased 2.9% from the year-ago reported figure of $1.36. While the company’s operating earnings were $274 million in the quarter, down from $283 million a year ago, the path to that outcome was shaped by sizable swings across segments.

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