Why Is Wix.com (WIX) Up 4.8% Since Last Earnings Report?

Core Viewpoint - Wix.com has shown strong performance in its recent earnings report, exceeding expectations in both earnings and revenue, driven by the growth of its Base44 platform and overall strong demand for its services [2][3][4]. Financial Performance - Wix reported non-GAAP EPS of $1.68 for Q3 2025, surpassing the Zacks Consensus Estimate of 39 cents and up from $1.50 in the same quarter last year [2]. - Quarterly revenues increased by 14% year over year to $505.2 million, exceeding the Zacks Consensus Estimate of $502.65 million and management's guidance of $498-$504 million [3]. - Creative Subscriptions revenues, which account for 70.5% of total revenues, rose 12% year over year to $356.2 million, while Business Solutions revenues increased by 18% to $149 million [5]. Growth Drivers - Base44 has emerged as a significant growth driver, with its market share increasing from low single digits to over 10% since June, and it is projected to reach at least $50 million in ARR by year-end [4]. - Bookings improved by 14% year over year to $514.5 million, with Creative Subscriptions bookings increasing by 12% and Business Solutions bookings rising by 20% [6]. Regional Performance - Partner revenues in Q3 were $192.1 million, reflecting a 24% year-over-year increase, with North America contributing 61% to total revenues [7]. Operating Metrics - Non-GAAP gross margin remained flat at 69%, with Creative Subscriptions achieving a margin of 84% and Business Solutions at 34% [8]. - Non-GAAP operating income was reported at $89.9 million, slightly up from $88.4 million in the previous year [8]. Balance Sheet and Cash Flow - As of September 30, 2025, Wix had cash and cash equivalents of $889.6 million, an increase from $693 million as of June 30, 2025 [9]. - Free cash flow for the quarter was $127.3 million, with capital expenditures totaling $1.4 million [10]. 2025 Outlook - Wix revised its 2025 bookings outlook to $2,060–2,078 million, an increase from previous projections, primarily due to Base44's outperformance [11]. - The full-year revenue outlook was adjusted to $1,990–2,000 million, reflecting a shift towards multi-year plans that enhance long-term stability [12]. - The company expects a non-GAAP gross margin of 68–69% for 2025, slightly lower due to increased AI costs [13]. Q4 2025 Guidance - Management anticipates Q4 2025 revenues to be between $521 million and $531 million, indicating a year-over-year increase of 13–15% [15]. Industry Context - Wix.com operates within the Zacks Computers - IT Services industry, where competitors like Amdocs have shown varied performance, with Amdocs reporting a revenue decline of 9% year over year [19].