WIX Surged 35.2% in One Month, but Can Growth Keep the Rally Going?

WIX's 35.2% Rally Meets Stronger Operating Data

Second-quarter revenues rose 15% year over year to $563.1 million. Annualized recurring revenue increased 15% to $1.963 billion, while bookings advanced 12% to $569.1 million.

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Non-GAAP earnings of $1.39 per share topped the Zacks Consensus Estimate of $1.13. Self Creators' revenue growth also accelerated sequentially to 14%, supported by improving free-to-play conversion, stable retention and a healthy top of funnel.

Wix AI Products Broaden the Growth Story

Wix is pursuing two AI-led creation paths. Harmony combines visual editing with artificial intelligence for self-creators, while Base44 uses natural-language prompts for app and software creation. This approach extends the company's opportunity beyond traditional website building.

Base44's newest cohort outperformed the prior cohort, renewals led overall growth and more users selected annual plans. The competitive field is also moving quickly. Shopify Inc. SHOP has expanded Sidekick to build custom commerce apps and complete tasks through natural language. GoDaddy Inc. GDDY offers Airo AI Builder for websites, apps, stores and custom tools.

WIX Margin Gains May Be Reinvested, Not Banked

Base44's non-GAAP gross margin is expected to reach approximately 60% in the second half of 2026, up from near zero entering the year. Wix's proprietary Base 1 model and other cost work are lowering inference expenses across free and paid usage.

Those savings are expected to lift consolidated non-GAAP gross margin by roughly two percentage points in the second half from the first half. Wix plans to reinvest the entire improvement into Base44 sales and marketing, prioritizing the capture of market share over near-term margin retention.

Wix Faces Partner and Commerce Friction

Partners' revenue increased 17% year over year to $213.8 million, matching the expectations Wix provided in early June. Still, the company maintained its revised full-year outlook because Partners' softness is expected to weigh more immediately on bookings than revenues.

Gross payment volume rose only 3% to $3.6 billion, primarily because Wix wound down InkFrog, a commerce subsidiary with low monetization. Elevated customer-acquisition spending adds another execution test. If Base44 demand moderates, the decision to lengthen the targeted return period on marketing could pressure operating leverage.

WIX Momentum Leads a Mixed Style Signal

The operating data support the recent advance, but Wix must sustain Base44 growth while navigating Partners and commerce headwinds. Reinvesting margin gains can widen the growth opportunity, though it also shifts more of the near-term case toward demand durability.

WIX currently carries a Zacks Rank #3 (Hold). It has a Momentum Score of A and a VGM Score of B, indicating favorable recent momentum and a solid combined style profile. Its Value Score of C and Growth Score of C are more neutral, so the Style Scores do not provide uniformly positive confirmation after the rally. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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