WIX Beats Q4 Earnings Estimates on Revenue Momentum, Wins $250M Deal

Core Insights - Wix.com Ltd (WIX) reported non-GAAP earnings per share (EPS) of $1.81 for Q4 2025, surpassing the Zacks Consensus Estimate of $1.36, although down from $1.93 in the same quarter last year [1][9] - Quarterly revenues increased by 14% year over year to $524.3 million, but fell short of the Zacks Consensus Estimate of $528 million. For the full year 2025, revenues reached $1.99 billion, reflecting a 13% increase [2][9] Revenue Breakdown - Creative Subscriptions, accounting for 70.6% of total revenues, saw a 12% year-over-year increase to $370.4 million. Business Solutions, making up 29.4% of total revenues, rose 18% to $153.8 million [5] - Total annualized recurring revenues (ARR) for the quarter were $1.84 billion, up 14% year over year, with bookings improving by 15% to $534.5 million [5] Strategic Developments - Wix's strategic investments in AI through Wix Harmony and Base44 are noteworthy, with Base44 achieving $100 million in ARR within one year of its founding, significantly expanding Wix's Total Addressable Market [3] - The company announced a $250 million private placement led by Durable Capital Partners, aimed at reinforcing market confidence and funding AI innovation [4] Operating Performance - Non-GAAP gross margin was reported at 68%, down from 70% a year ago, with Creative Subscriptions achieving a gross margin of 83% and Business Solutions at 34% [7] - Non-GAAP operating income for the quarter was $81.2 million, compared to $100.5 million in the previous year [7] Financial Position - As of December 31, 2025, Wix had cash and cash equivalents of $311.4 million, a decrease from $889.6 million as of September 30, 2025 [8] - Cash flow from operations amounted to $158.3 million, up from $133.7 million year over year, with free cash flow reported at $155.6 million [10] Shareholder Returns - During the quarter, Wix repurchased approximately 750,000 shares for $100 million and plans to aggressively execute its $2 billion share buyback program [11] Future Outlook - For 2026, Wix anticipates mid-teens revenue growth and similar growth in bookings, indicating strong demand momentum. Free cash flow margins are projected in the low-to-mid-20% range, with potential fluctuations based on investments in Base44 [12]