Key Highlights
- Wix shares plunged approximately 30% to reach a 52-week low of $55.88 following earnings release
- First quarter earnings per share registered at $0.68, significantly missing the $1.21 Wall Street consensus
- Quarterly revenue increased 14% on a year-over-year basis to $541.2 million, falling short of $543.8 million projections
- The company unveiled “Wix Harmony,” a proprietary AI model powered by an internally developed large language model
- Wix bought back 17.5 million shares at $92 per share through a $1.6 billion Dutch Auction tender offer
Shares of Wix.com (WIX) plummeted approximately 30% during Tuesday’s trading session following the release of first quarter 2026 financial results that disappointed investors on both earnings and revenue metrics. The stock briefly touched $55.88, marking its lowest point in 52 weeks, before recovering slightly to trade near $58.75 by midday.
The company’s non-GAAP earnings per share for Q1 registered at just $0.68, representing a significant shortfall from Wall Street’s consensus forecast of $1.21. This figure also represents a substantial decline compared to the $1.55 EPS the company delivered in the corresponding period last year.
Quarterly revenue totaled $541.2 million, reflecting a 14% year-over-year increase. While this growth rate demonstrates healthy momentum for a company of Wix’s maturity, it nonetheless fell below analyst expectations of $543.8 million.
Company leadership attributed some of the performance challenges to geopolitical tensions stemming from the continued Israel conflict. Productivity setbacks within the Partners division were explicitly identified as contributing factors to the weaker-than-anticipated results.
Despite these headwinds, the Partners segment still managed to deliver 19% revenue growth, reaching $203.4 million. However, executives acknowledged that this business unit experienced a sluggish beginning to the quarter.
Introducing Wix Harmony AI Platform
The most significant strategic development emerging from the quarter was the introduction of “Wix Harmony,” which operates on a proprietary large language model created entirely within Wix’s development teams. This represents a notable strategic pivot away from dependence on external AI tools.
Company executives characterized Harmony as the inaugural offering in what will become a comprehensive portfolio of proprietary Wix AI systems. The strategic objective centers on developing artificial intelligence capabilities that rival platforms cannot easily duplicate.
Creative Subscriptions revenue, representing 70.6% of total revenue, expanded 13% year-over-year to reach $382 million. Business Solutions revenue climbed 17% to $159 million.
Annual recurring revenue reached $1.9 billion, marking a 15% year-over-year increase. Total bookings registered at $585 million, similarly growing 15%.
A particularly encouraging metric: bookings generated from Q1’s new customer cohort surged nearly 50% compared to the prior year period. Leadership attributed “Base44” as playing a significant role in driving this impressive growth.
Major Share Repurchase Program Finalized
This past April, Wix finalized a modified Dutch Auction tender offer, acquiring approximately 17.5 million shares at a price of $92 per share. The aggregate transaction value totaled roughly $1.6 billion.
This buyback reduced outstanding shares to approximately 41.8 million as of May 11, 2026 — representing a nearly 30% reduction in the share count.
Non-GAAP gross margin registered at 66%, declining from 69% in the comparable quarter last year. Non-GAAP operating income decreased to $27.8 million from $99.8 million in the prior year period. Operating margin contracted to 5% from 21%.
The company’s cash position stood at $1.34 billion as of March 31, 2026, up substantially from $311.4 million at the conclusion of 2025 — partially reflecting timing factors related to tender offer financing.
Free cash flow for the quarter totaled $75 million. When excluding acquisition-related expenses, the adjusted figure would have reached $112.3 million, equivalent to 21% of revenue.
Wix reaffirmed its full-year guidance calling for mid-teens percentage revenue growth and mid-teens bookings expansion. Free cash flow margins are projected to land in the high-teens range due to reduced interest income following the substantial cash deployment, interest expenses associated with a $500 million credit facility, and foreign exchange headwinds stemming from a strengthening Israeli shekel.
Certain product launches targeting professional users were reportedly postponed, which could create near-term growth challenges.
Wix currently carries a Zacks Rank of #3 (Hold).
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