Wix is seeing early signs that its major push into artificial intelligence is paying off.
The website-building company reported second-quarter 2026 results that exceeded Wall Street expectations, with revenue rising 15% year over year to $563.1 million, above analysts’ forecast of $554 million.
Wix is seeing early results from its push into artificial intelligence
(Twitter @nirzo)
Adjusted earnings came in at $1.39 per share, beating expectations of $1.13, although profit declined compared with the same period last year.
The company credited much of the momentum to strong performance from Base44, its AI-powered software creation platform, alongside continued growth in its core website and business services.
Wix’s total annual recurring revenue (ARR) increased 15% to $1.96 billion, while bookings climbed 12% to $569.1 million.
The company ended the quarter with nearly 317 million registered users.
Base44 becomes a key growth driver
Base44 has emerged as one of Wix’s biggest strategic bets, allowing users and businesses to create software applications through AI-powered tools.
During the quarter, Wix launched Base 1, its own large language model designed specifically for software creation.
Management said developing its own AI technology gives the company more control over costs, speeds up product development and reduces reliance on outside AI providers.
Base44’s gross margin is expected to improve significantly, reaching around 60% in the second half of 2026, compared with nearly zero at the beginning of the year.
The company expects lower AI costs to improve overall profitability, with consolidated non-GAAP gross margins projected to rise by about two percentage points in the second half of the year.
Wix also expanded Base44’s enterprise features, adding tools such as improved security permissions, single sign-on capabilities, connector management and customer-controlled databases.
Core Wix business continues to expand
Wix’s traditional subscription business remained strong.
Creative Subscriptions revenue increased 15% year over year to $398.4 million, while bookings in the segment rose 11% to $405.8 million.
The company said Base44 contributed to growth in the segment, while its Wix Harmony product also began making an early contribution.
Revenue from self-creators, including individual users building websites and online businesses, rose 14% to $349.3 million.
Partner revenue, which includes businesses and professionals using Wix services for clients, increased 17% to $213.8 million and accounted for 38% of total revenue.
Business services grow despite payment challenges
Wix’s Business Solutions segment generated $164.7 million in revenue, up 14% year over year.
Growth was supported by increased adoption of Google Workspace and Wix’s paid advertising products.
Transaction revenue rose 12% to $71.5 million, representing 43% of Business Solutions revenue.
Gross payment volume reached $3.6 billion, up 3% year over year, while Wix’s take rate improved to 1.96%.
The company said payment volume growth was affected by the wind-down of one commerce subsidiary, a challenge expected to continue for several more quarters.
Higher AI spending weighs on margins
Wix’s AI expansion came with higher costs.
The company’s non-GAAP gross margin declined to 67% from 70% a year earlier, partly because of Base44’s growing contribution.
Research and development expenses increased 6% to $104.7 million as Wix expanded its Base44 team.
Sales and marketing expenses jumped 67% to $173.1 million, driven by increased Base44 advertising and higher AI-related costs for free users.
Despite the higher spending, Wix reported non-GAAP operating income of $64.8 million, representing a 12% operating margin.
Strong cash position and outlook unchanged
Wix generated $55.6 million in operating cash flow during the quarter, with free cash flow reaching $52.6 million.
Excluding restructuring costs, free cash flow totaled $61.2 million, representing 11% of revenue.
The company 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, expecting low- to mid-teens revenue growth, low-teens bookings growth and a high-teens free cash flow margin excluding acquisitions and restructuring costs.
For the third quarter, management expects revenue growth in the low double digits and said profitability should improve in the second half as lower AI costs and reduced core marketing expenses offset continued investment in Base44.
The results reinforce Wix’s strategy of moving beyond traditional website building and positioning itself as a broader AI-powered platform for creating digital products and software.