Wix.com Ltd. (WIX) Q4 2025 Earnings Call Transcript
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Overview
The earnings call summary and Q&A indicate positive sentiment. The company raised its full-year outlook for revenue and bookings, signaling confidence in its growth trajectory. Base44's rapid ARR growth and the strategic partnership with OpenAI are additional positives. While there are some concerns about premium subscription declines, the focus on higher-value cohorts mitigates this. The Q&A section reveals a generally optimistic outlook, with increasing conversion rates and efficient cost management. Overall, the positive factors outweigh any negatives, suggesting a likely positive stock price movement.
Key Financial Performance
Total Bookings in Q4 2025 $535 million, up 15% year-over-year, driven by strong new cohort behavior and solid retention of our existing user base in our core Wix business as well as Base44 outperformance.
Total Revenue in Q4 2025 $524 million, up 14% year-over-year, driven by strong new cohort behavior and solid retention of our existing user base in our core Wix business as well as Base44 outperformance.
Base44 ARR Approximately $100 million, driven by product innovation, rapidly expanding user base, improving conversion, and consistent upgrade and renewal trends.
GPV in Q4 2025 $3.7 billion, up 11% year-over-year, driven by higher selling and larger businesses increasingly coming to Wix to build and operate their storefronts.
GPV for Full Year 2025 $14.3 billion, up 11% year-over-year, driven by GPV growth and a steady increase in take rate throughout the year.
Transaction Revenue Growth in Q4 2025 18% year-over-year, driven by GPV growth and a steady increase in take rate.
Transaction Revenue Growth for Full Year 2025 19% year-over-year, driven by GPV growth and a steady increase in take rate.
Partners Revenue in Q4 2025 $203 million, up 21% year-over-year, driven by solid studio performance as well as strong adoption of Google Workspace and Marketing Solutions, partially offset by GPV headwinds.
Net Revenue Retention for 2025 105%, nearly matching the strong retention seen in 2024 despite persistent GPV headwinds, demonstrating the inherent stickiness and creation power of the user base.
Projected 10-Year Value of Existing Cohorts Over $20 billion, grew 14% year-over-year, reflecting high retention and growing user value.
Free Cash Flow in Q4 2025 $156 million, 30% of revenue, stable compared to the previous quarter.
Total Bookings for Full Year 2025 $2.07 billion, up 13% year-over-year.
Total Revenue for Full Year 2025 $1.993 billion, up 13% year-over-year.
Total Consolidated ARR at End of 2025 $1.836 billion, up 14% year-over-year.
Free Cash Flow for Full Year 2025 $605 million, 30% of revenue, excluding acquisition-related expenses.
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Operating Highlights
Wix Harmony: A new website creation platform blending intuitive visual editing with vibe coding. It includes a unified AI layer for creating, managing, and growing online presence. Launched in English in January 2026 and now expanding globally. Early performance shows strong conversion and monetization metrics.
Base44: A vibe coding platform for software creation, acquired by Wix. It has reached $100 million ARR within 9 months of acquisition. It supports building CRM capabilities, ERP systems, workflow automation, and more. Adoption is growing among businesses, enterprises, and government organizations.
Market Expansion: Wix's total addressable market (TAM) has expanded significantly due to the acquisition of Base44, enabling users to create tailored software applications and more sophisticated online tools.
Revenue Growth: Q4 2025 revenue was $524 million, up 14% year-over-year. Full-year 2025 revenue reached $1.993 billion, a 13% increase year-over-year.
ARR Growth: Base44 achieved $100 million ARR, and Wix's consolidated ARR reached $1.836 billion by the end of 2025, up 14% year-over-year.
Free Cash Flow: Wix generated $605 million in free cash flow in 2025, representing 30% of revenue.
AI Integration: Wix is focusing on AI-driven innovations, including Wix Harmony and Base44, to redefine online creation and expand its leadership in the AI-powered online presence market.
Stock Repurchase Program: Wix plans to complete the majority of its $2 billion stock repurchase program in 2026, reflecting confidence in its strategic plan.
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Risk or Challenges
GPV headwinds: SMBs on the platform experienced macroeconomic pressures, resulting in seasonally softer than anticipated GPV on the platform.
AI compute costs: Elevated AI compute costs were incurred to support Base44's rapid growth, which impacted gross margins. These costs are front-loaded as new users consume more AI inference bandwidth during their initial build phase.
Currency headwinds: A material currency headwind on payroll expenses due to the weakening of the U.S. dollar against the Israeli shekel, despite hedging activities.
Free user AI costs: Approximately one-third of Base44's AI inference cost is attributed to token consumption by free users, which adds to the overall cost burden.
Scaling Base44: Rapid growth of Base44 requires high-impact investments, which may pressure near-term free cash flow margins.
Macroeconomic pressures: Persistent macroeconomic pressures on SMBs affected GPV growth and overall platform performance.
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Guidance & Outlook
2026 Bookings and Revenue Growth: Anticipated to grow at mid-teens percentage year-over-year for the consolidated business.
Q1 2026 Revenue Growth: Expected to grow at a mid-teens percentage on a year-over-year basis for the consolidated business.
2026 Free Cash Flow Margin: Projected to be in the low to mid-20% range, assuming current capital structure and excluding acquisition expenses. This range reflects the hyper-growth trajectory of Base44 and potential variability.
Base44 Growth Expectations: Base44 is expected to continue its rapid growth trajectory, potentially leading to further pressure on near-term free cash flow margins. Investments will be made to scale Base44 into a market leader.
Core Wix Business Performance: Solid bookings and revenue performance expected with flat to expanding free cash flow margin for full year 2026.
Currency Headwind Impact: A material currency headwind on total payroll expense base is expected due to the weakening of the U.S. dollar against the Israeli shekel.
AI Inference Costs for Wix Harmony: Negligible costs anticipated in 2026 due to proactive infrastructure optimization completed in the previous year.
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Shareholder Return Plan
Repurchase Program: The company announced plans to complete the majority of its $2 billion share repurchase program within the year 2026. This decision is driven by the belief that the current stock performance undervalues the company's opportunities and business strength. The repurchase will be executed aggressively to demonstrate confidence in the strategic plan.
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Key Q&A
Q:What are the contributors to the organic growth embedded in the full-year bookings guide?
A:The guidance reflects growth within the Wix core business and Base44. There is no significant change or increase in pricing, and no extraordinary factors were indicated for GPV payments.
Q:What types of businesses or applications are users setting up with Base44, and how much crossover is there with Wix's core platform?
A:Users are building a variety of applications, including personal growth, business, and enterprise applications like CRM replacement and SPR automation. There is no significant competition or crossover with Wix's core platform, as the usage is mostly different.
Q:Do you see Base44 skewing upmarket, and how far upmarket do you expect it to go?
A:Base44 has a wide range of opportunities and usage, including personal use. It is too early to determine whether it will skew more upmarket or towards self-creators. The company aims to segment and win on both ends over time.
Q:Is the conversion of free to paid users for Base44 happening faster than expected?
A:Yes, about one-third of inference costs are from free users, but conversion is increasing, and the company is becoming more efficient in managing different user types. The portion related to free users is expected to decrease as overall costs decrease.
Q:What accelerated Base44's growth sequentially, and what is the base ARR bookings outlook for fiscal 2026?
A:Base44's growth acceleration is better than expected, reaching $100 million in ARR. The company does not break down bookings between Wix and Base44, as Base44's growth is synergistic with Wix. ARR growth provides a good indication of future assumptions.
Q:What was the performance of Wix's core legacy base business in Q4?
A:There was acceleration in Q4, as expected, with modest softness in GPV partially compensated by better subscription growth. Creative subscriptions contributed to the acceleration.
Q:How is Base44's LTV and payback period estimated, and what are the acquisition cost expectations for 2026?
A:Base44 has a payback period of less than one year, and the company is investing for growth rather than optimizing gross margin. Acquisition costs are expected to be higher in 2026 due to market demand and plans to expand the business.
Q:What types of users are initially adopting Harmony, and is it helping websites become more sophisticated?
A:Harmony is being used by a wide range of users, including professional websites, salons, and enterprises. It currently does not support databases, so it is less sophisticated but will improve over time.
Q:What are the benefits of the OpenAI partnership for Wix, and how might it evolve?
A:The partnership allows Wix users to build websites with OpenAI's intelligence, creating opportunities for collaboration between AI systems. Wix supports making content visible and easy to crawl for LLMs, and the partnership is expected to grow significantly.
Q:Why are premium subscriptions declining despite growth in key markets?
A:The decline aligns with the strategy to prioritize cohort value over subscription numbers. The company focuses on higher-value subscriptions, leading to lower net subs but higher cohort value.
Q:What is the expected composition of growth between self-creator and partner segments in 2026?
A:Self-creator growth is expected to remain stable, with acceleration in new cohorts due to Harmony. Partners may benefit from Base44's offerings, creating additional revenue streams.
Q:What are the early cohort KPIs for Harmony, and how durable are they across geographies?
A:Harmony shows better conversion, faster monetization, and higher ARPU. The company is optimistic about these trends continuing.
Q:How do the economics of LLM partnerships work, and what is the expected impact on Harmony sign-ups?
A:The company cannot disclose specific economics but has various partnerships with LLM providers. The impact on Harmony sign-ups is not expected to be significant in the near term.
Q:What accelerated Base44's ARR growth to $100 million, and what role did marketing play?
A:Growth was driven by increased brand awareness, a Super Bowl campaign, and a stellar marketing team. Product improvements and optimization of the business model also contributed.
Q:How does the freemium model for Base44 impact S&M expenses, and can it be adjusted over time?
A:The freemium model allows users to test the product, building a large cohort base. Over time, the model can be adjusted to optimize expenses while maintaining growth.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer to the breakdown of bookings between Wix and Base44, citing that Base44's growth is synergistic with Wix. They also did not disclose specific economics of LLM partnerships or the expected impact on Harmony sign-ups.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI Harmony
AI layer
AI partner
AI presence
AI shift
AI world
ARR software
Anouk supporter
Avishai possibility
Base platform
Internet
Nir
TAM
Today
acquisition Base
capital
conference
conviction
core cohort
creation platform
enterprise
equity investment
expansion
experience
number user
online
organization
people AI
potential
power
presence creation
shift AI
size
tech
term vision
user Base
user base
user value
value user
website creation
WIX Transcript
Wix.com Ltd. (WIX) Q4 2025 Earnings Call Transcript
Positive3-4
The earnings call summary and Q&A indicate positive sentiment. The company raised its full-year outlook for revenue and bookings, signaling confidence in its growth trajectory. Base44's rapid ARR growth and the strategic partnership with OpenAI are additional positives. While there are some concerns about premium subscription declines, the focus on higher-value cohorts mitigates this. The Q&A section reveals a generally optimistic outlook, with increasing conversion rates and efficient cost management. Overall, the positive factors outweigh any negatives, suggesting a likely positive stock price movement.
Wix.com Ltd. (WIX) Presents at UBS Global Technology and AI Conference 2025 Transcript
Neutral12-2
Wix.com Ltd. (WIX) Q3 2025 Earnings Call Transcript
Positive11-19
The earnings call reflects a positive sentiment with strong financial metrics, optimistic guidance, and strategic growth initiatives. Revenue and bookings growth projections are promising, and the BASE44 acquisition is expected to drive long-term synergy. Despite some uncertainties around churn and margin pressures, management's optimism about reducing costs and improving profitability is reassuring. The AI-driven advancements and market expansion plans further enhance the positive outlook. While some concerns were raised in the Q&A, they were addressed with confidence, supporting a positive sentiment for stock price movement.
Wix.com Ltd. (WIX) Presents At Citi's 2025 Global Technology, Media And Telecommunications Conference Transcript
Neutral9-3
WIX Report
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