Wix.com Ltd ((WIX)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Wix.com Ltd. Reports Strong Q3 Growth Amid Short-Term Challenges
Wix.com Ltd. showcased a robust performance in the third quarter of 2025, with significant growth in its core business and Base 44. The earnings call highlighted positive momentum driven by advancements in AI-powered app building and transaction revenue growth. However, short-term challenges such as a delayed product launch and increased costs associated with Base 44 impacted financial margins. Despite these hurdles, the company remains on a promising growth trajectory with positive long-term prospects.
Strong Financial Performance
Wix.com Ltd. reported a remarkable financial performance for Q3, with total bookings reaching $515 million, marking a 14% increase year over year. Total revenue also grew to $505 million, exceeding the high end of guidance, reflecting the company’s strong market position and effective business strategies.
Rapid Growth of Base 44
Base 44, Wix.com Ltd.’s AI-powered app building platform, experienced rapid growth, with its user base increasing sevenfold since June. Now serving over 2 million users globally, Base 44 is expected to achieve at least $50 million in Annual Recurring Revenue (ARR) by the end of the year, surpassing previous expectations.
Increased Market Share in AI-Powered Application Building
The company’s Base 44 platform significantly increased its market share in AI-powered application building, with audience traffic rising from low single digits in June to more than 10% by October. This growth underscores Wix.com Ltd.’s competitive edge in the AI application space.
Positive Trends in Core Business
Wix.com Ltd.’s core business continued to thrive, with new user cohorts driving top-line growth. This solid performance provides a strong foundation for continued growth into the fourth quarter and beyond, positioning the company well for future success.
Transaction Revenue Growth
Transaction revenue saw a 20% year-over-year increase, driven by a 13% growth in Gross Payment Volume (GPV) and an elevated take rate, as more merchants opted for Wix.com Ltd. payments. This growth highlights the company’s expanding influence in the payment processing sector.
Delayed Product Launch
The anticipated launch of the new flagship Self Creator tool faced delays, initially expected in summer 2025, now postponed to early 2026 due to technical challenges. This delay presents a short-term setback but is expected to be resolved with ongoing development efforts.
Short-Term Financial Headwinds from Base 44
Base 44’s monthly subscription model has led to a misalignment between bookings and operating expenses, causing a short-term headwind to free cash flow and operating profit. Despite these challenges, the platform’s long-term potential remains strong.
Decreased Gross Margin
The company’s non-GAAP gross margin decreased slightly to 69% in Q3, down from 70% in Q2, attributed to increased AI processing and compute costs for Base 44. This decrease reflects the growing investment in AI technologies and infrastructure.
Forward-Looking Guidance
Looking ahead, Wix.com Ltd. has raised its full-year bookings outlook to between $2.062 billion and $2.078 billion, indicating a 13% to 14% year-over-year growth. The company anticipates Base 44 to continue driving growth, despite short-term margin pressures due to high initial costs and ongoing investments in marketing and AI processing. Free cash flow for the full year is expected to be approximately $600 million, underscoring the company’s strong financial health.
In summary, Wix.com Ltd.’s third-quarter earnings call highlighted a strong growth trajectory, driven by significant advancements in AI-powered app building and transaction revenue. Despite short-term challenges, such as a delayed product launch and increased costs, the company’s long-term prospects remain promising. Investors can look forward to continued growth, supported by strategic investments and a robust market position.