Earnings Disaster: Why Wall Street Is Dumping Wix Stock

Benzinga Earnings
05/13

Wix.com Ltd. (NASDAQ:WIX) shares fell sharply in premarket trading Wednesday after the software-as-a-service website builder reported first-quarter 2026 results that missed Wall Street expectations on both revenue and earnings.

Wix Q1 Results Miss Expectations

The company reported quarterly revenue of $541.2 million, up 14% from a year earlier but below analysts' consensus estimate of $544.2 million. Adjusted earnings came in at 68 cents per share, missing expectations of $1.25 per share.

Total annual recurring revenue rose 15% year over year to $1.9 billion at the end of the quarter.

Segment Performance Shows Continued Expansion

Creative Subscriptions revenue increased 13% to $382.4 million, while bookings for the segment rose 13% to $418.8 million. Partners revenue climbed 19% to $203.4 million during the quarter.

Business Solutions revenue increased 17% to $158.8 million, and bookings for the segment jumped 18% to $166.2 million.

Wix Margins, Cash Flow And Balance Sheet

The company's consolidated adjusted gross margin declined 300 basis points to 66%.

Wix generated $78.5 million in operating cash flow during the quarter and ended March 31, 2026, with $1.34 billion in cash and cash equivalents.

AI Strategy And Product Development

Co-founder and CEO Avishai Abrahami said the company remains confident in its long-term growth prospects as innovation accelerates across website and app creation.

Abrahami said Wix recently developed its own large language model to power Wix Harmony, allowing the company to fine-tune the platform using internal data and user feedback. He added that the in-house model gives Wix more control over AI-related costs while reducing reliance on third-party providers.

Wix Management Commentary And Shareholder Returns

Chief Financial Officer Lior Shemesh said bookings from Wix's first-quarter 2026 new user cohort increased nearly 50% year over year, supported by contributions from Base44 and continued strength in the company's core business.

Shemesh also said the company completed its $1.6 billion modified tender offer in April, repurchasing nearly 30% of outstanding shares as part of its shareholder return strategy.

Outlook And Stock Reaction

For the second quarter, Wix projected revenue growth in the mid-teens. The company also reiterated its full-year 2026 free cash flow margin outlook in the high-teens, excluding acquisition-related costs.

The company reaffirmed its full-year 2026 guidance, expecting bookings and revenue to increase by a mid-teens percentage year over year.

WIX Price Action: Wix.com shares were down 24.62% at $57.20 during premarket trading on Wednesday. The stock is trading at a new 52-week low, according to Benzinga Pro data.

Photo via Shutterstock

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