So, Wix.com Ltd. (WIX) reported earnings. You know the drill: the stock pops on the headline, then everyone actually reads the report. This time, the website builder's shares gave up their initial gains and headed lower. Let's unpack why.
The fiscal fourth-quarter 2025 numbers were a bit of a mixed bag. Revenue came in at $524.27 million, up 14% year-over-year. That's solid growth, but it just narrowly missed what analysts were expecting. On the flip side, adjusted earnings per share of $1.81 handily beat the consensus estimate of $1.43. So, not a disaster, but not a blowout either.
Digging into the segments tells a clearer story of where the money's coming from. The core Creative Subscriptions business saw revenue rise 12% to $370.4 million. Bookings, which is a forward-looking metric, climbed 16% to $375.8 million. The company's Partners revenue, which comes from agencies and developers using its platform, jumped a healthy 21% to $203.2 million. Business Solutions, which includes things like payments and shipping, grew 18% to $153.8 million.
One note for the margin watchers: the consolidated adjusted gross margin dipped by 200 basis points to 68%. The company was a cash-generating machine for the quarter, producing over $158 million in operating cash flow. It ended the year with a little over $311 million in cash on the balance sheet.
Now, here's where it gets interesting. Alongside the earnings, Wix announced a deal. It's entering into a definitive agreement to sell securities in a private placement to institutional investors, led by Durable Capital Partners. This could bring in up to $250 million in gross proceeds. The company will issue units at a 5% discount to Wednesday's closing share price. Each unit includes one share and a warrant to buy a quarter of a share later at a 25% premium. The warrants last for three years. The plan is to use the money for general corporate purposes, and the deal is expected to close in early March 2026.
Why raise money when you're generating cash? Because Wix's CEO, Avishai Abrahami, says 2026 marks a "new phase" for the company. The reason, as with everything these days, is AI. He pointed to two platforms in particular. Wix Harmony, their AI-driven site creation and management system, is apparently performing better than expected in early days. Then there's Base44, an AI application development platform they acquired. It just hit $100 million in annual recurring revenue—only a year after launch and nine months after Wix bought it.
Abrahami argues these platforms don't just improve the existing business; they expand Wix's total addressable market by letting users build more complex software applications. It's part of the long game of making powerful tech accessible.
And here's the other half of the capital allocation story. While they're raising money for growth, they're also planning to send a huge amount back to shareholders. President and co-founder Nir Zohar said the company plans to "move aggressively" on its previously announced $2 billion share repurchase program. The goal is to complete most of it before the end of 2026. That's a serious commitment to returning capital.
So, what's the plan for this pivotal year? The company calls 2026 a "foundational year." The focus is on advancing those major AI product roadmaps for Harmony and Base44 to strengthen the platform and expand Wix's role online.
The guidance reflects this investment phase. For the full year 2026, Wix expects consolidated bookings and revenue to grow at a "mid-teens" percentage year-over-year. They're forecasting the same for the first quarter. Free cash flow margin for the year is projected in the "low- to mid-20%" range. The company notes that range is wider because of the rapid growth at Base44 and their plans to invest to cement leadership in this new market. They were sure to add that the core Wix business remains profitable and should see solid growth with stable or expanding cash flow margins.
In short, Wix is telling a story of transformation. They're raising capital to bet big on AI-driven growth engines while simultaneously promising to buy back a mountain of stock. It's a bold playbook: invest for the future while rewarding shareholders today. The market, initially cheered by the earnings beat and buyback news, seems to be taking a moment to think it over. Wix shares were down in premarket trading following the report.
