Wix.com Ltd.

Wix reported Q2 revenue growth of 15% year over year and bookings growth of 12% year over year. Total non-GAAP gross margin was 67%, down 3 points year over year and slightly up sequentially; total non-GAAP operating income was 12% of revenue. Management said BASE44’s non-GAAP gross margin should be approximately 60% in the second half of 2026, versus near 0% entering the year, and that this should create about 2 points of consolidated non-GAAP gross margin improvement in the second half versus the first half. For the full year 2026, Wix maintained guidance for bookings growth in the low teens, revenue growth in the low to mid-teens, third-quarter revenue growth in the low double digits, and free cash flow margin excluding acquisition and restructuring costs in the high teens.

Avishai Abrahami framed the company’s strategy as building deeper control of the AI stack while pursuing two parallel product paths: Wix Harmony for self-creators and BASE44 for natural-language app creation. He emphasized Base1 as a proprietary in-house LLM that improves quality control, iteration speed, and long-term cost structure, and said it already performs better than frontier providers for BASE44 use cases. His tone was confident and long-term oriented, with repeated emphasis on improving product quality, owning more of the technology stack, and compounding proprietary data advantages.

Lior Shemesh focused on execution and margin leverage. He said Q2 non-GAAP gross margin was 67%, down 3 points year over year because of elevated BASE44 investments and AI compute costs, but that Base1 and lower inference costs should lift BASE44 gross margin to about 60% in the second half. He said those savings amount to roughly 2 points of total non-GAAP gross margin improvement in the second half versus the first half, and that the company will reinvest the savings into sales and marketing, keeping S&M elevated in Q3 and Q4. He also said Wix ended Q2 with about $960 million in cash and cash equivalents and $1.63 billion in short- and long-term debt.

Analysts focused heavily on Base1, asking about quality trade-offs, inference cost reductions, traffic running through the new model, and whether there were constraints to broader deployment. Management said Base1 is already seeing better results than external frontier models for BASE44, that the cost benefit is substantial, and that the gross margin improvement has already started to show up gradually over the last few weeks. Another major topic was partner migration: management said some partners are shifting toward BASE44 and sometimes using both BASE44 and Wix Studio or headless solutions, but stressed the trend is still early and hard to size. Analysts also pressed on BASE44 renewals and ARR durability; management said renewals are approaching, monthly behavior is improving, and annual adoption is increasing, but they were not ready to comment on renewal results yet.