Wix.com Ltd. (WIX) had a rough morning. The website-building platform reported first-quarter 2026 results that missed Wall Street's expectations on both the top and bottom lines, and investors responded by sending shares down more than 24% in premarket trading.
The numbers tell the story. Revenue came in at $541.2 million, up 14% from a year ago but below the $544.2 million analysts were looking for. Adjusted earnings per share were just $0.68, a far cry from the $1.25 consensus estimate. That's the kind of miss that gets noticed.
But not everything was bad. Total annual recurring revenue hit $1.9 billion at the end of the quarter, up 15% year over year. Creative Subscriptions revenue grew 13% to $382.4 million, and Partners revenue climbed 19% to $203.4 million. Business Solutions revenue rose 17% to $158.8 million, with bookings up 18%.
The margin story was less encouraging. Consolidated adjusted gross margin fell 300 basis points to 66%. That's a meaningful drop, and it helps explain why earnings came in so far below expectations.
On the cash flow front, Wix generated $78.5 million in operating cash flow during the quarter and ended March with $1.34 billion in cash and equivalents. So the balance sheet is solid.
CEO Avishai Abrahami tried to focus on the long term. He said the company recently developed its own large language model to power Wix Harmony, which lets Wix fine-tune the platform using internal data and user feedback. The in-house model gives Wix more control over AI costs and reduces reliance on third-party providers. That's a smart move, but it didn't seem to calm investors today.
CFO Lior Shemesh had some good news too. He noted that bookings from Wix's first-quarter 2026 new user cohort increased nearly 50% year over year, supported by contributions from Base44 and strength in the core business. He also said the company completed its $1.6 billion modified tender offer in April, repurchasing nearly 30% of outstanding shares. That's a big vote of confidence from management.
Looking ahead, Wix expects second-quarter revenue growth in the mid-teens and reiterated its full-year 2026 free cash flow margin outlook in the high-teens, excluding acquisition-related costs. The company also reaffirmed its full-year guidance for bookings and revenue to increase by a mid-teens percentage year over year.
None of that was enough to prevent the stock from hitting a new 52-week low. Wix shares were down 24.62% at $57.20 in premarket trading Wednesday. Sometimes the market just doesn't want to hear the good news when the headline numbers are this ugly.
