Wix.com Ltd

Wix.com Ltd is an Israeli company founded in 2006 and traded on Nasdaq under the symbol WIX. Its offices are at 5 Yunitsman Street, Tel Aviv. The company operates a cloud platform for creating, managing and running a digital presence — websites, e-commerce stores, and since last year software applications as well.

As of 31 December 2025 the company reported more than 304 million registered users and 6.11 million premium subscriptions. Revenue is split into two reporting segments: Creative Subscriptions — building and hosting subscriptions, domain registrations, and since 2025 Base44 as well; and Business Solutions — payment processing through Wix Payments, Google Workspace packages, shipping solutions and third-party products. In the second quarter of 2026 the first segment accounted for 70.7% of revenue and the second for 29.3%.

Two newer products sit at the centre of the map: Wix Harmony, a new generation of site building running on a language model Wix built itself; and Base44, a no-code application-building platform acquired in June 2025 for total consideration of approximately $92 million. In August 2026 Base44 launched a proprietary language model of its own named Base 1. A further name appearing in the filings is Wix Studio, a product aimed at agencies and freelancers whose revenue is included in the Partners category.

The company has no controlling shareholder. Founders in key roles are Avishai Abrahami (Chief Executive Officer and co-founder), Nir Zohar (President and co-founder) and Lior Shemesh (Chief Financial Officer). Headcount fell from 5,340 at the end of 2025 to 4,371 at 30 June 2026.

Source: Form 20-F for 2025, Items 4 and 5; the first- and second-quarter 2026 results releases.

Three numbers the filings place side by side

The first — the comparison base. Net income in the second quarter of 2025 was $57.7 million, but income before tax in that quarter was only $6.1 million. The difference is a tax benefit of $51.7 million. The annual report explains that the 2025 tax benefit arose primarily from the release of a valuation allowance on deferred tax assets, reflecting the transition to profitability on a cumulative basis. (Our computation: the year-over-year movement measured at the pre-tax line is $77.1 million, not the $134.1 million that the net income line appears to show.)

The second — the GAAP operating result of last year. For the full year 2025, GAAP operating income was $1.75 million on revenue of $1,993.0 million, or 0.1%. Reported net income for that year, $50.6 million, is 29 times the operating result. (Our computation.)

The third — the distance between GAAP and non-GAAP. In the first half of 2026 the GAAP operating loss was $128.5 million against non-GAAP operating income of $92.6 million. Total adjustments: $221.1 million, equal to 20.0% of revenue. Of that, share-based compensation was $110.3 million (10.0% of revenue), acquisition-related expenses $79.0 million, and restructuring $27.1 million. (Percentages computed by us.)

Cost of revenue in Creative Subscriptions rose 49.7% in the quarter on segment revenue growth of 15.3%. The increment in cost was $26.9 million on revenue growth of $52.9 million — that is, 51% of every incremental dollar of segment revenue was absorbed by cost. Non-GAAP gross margin in the segment fell from 85.08% to 80.38%. (Computed by us from the reconciliation tables.)

In the same quarter, and pointing the other way: non-GAAP gross margin in Business Solutions rose from 31.3% to 32.2%, and across the quarterly series the Creative non-GAAP gross margin was 80.26% in the first quarter of 2026 and 80.38% in the second — that is, the compression occurred at the turn of the year and did not continue in the latest quarter. (Our computation: 306.9 divided by 382.4, and 320.2 divided by 398.4.)

Source: second-quarter 2026 results release, statements of operations and reconciliation tables; Form 20-F for 2025, Item 5.

The structure of the debt

2030 convertible notes. In September 2025 the company sold $1,150 million aggregate principal amount of convertible senior notes bearing a 0.00% coupon, maturing in September 2030. The conversion price is $210.49 per share, at a conversion rate of 4.7509 shares per $1,000 of principal. Alongside the issue the company purchased capped call transactions at a cost of $71.9 million, with a strike of $210.49 and a cap of $267.89. The company may not redeem the notes before 20 September 2028. Upon a fundamental change, holders may require repurchase at 100% of principal.

Credit facility with Bank Hapoalim. On 3 March 2026 the company entered into an agreement for a $500 million facility, drawable in up to two tranches between 1 April 2026 and 31 March 2027. Interest is monthly SOFR plus a margin of 0.30% to 0.40% on the first $400 million and 1.05% to 1.15% on the final $100 million. The agreement contains a financial covenant requiring a Bank Debt to Free Cash Flow ratio not exceeding 2.0, and collateral: 1 billion NIS in Bank of Israel bills and a $120 million cash deposit, both held with the bank in a designated account. The company is also prohibited from creating a general floating charge over its assets. The full $500 million was drawn in the second quarter, and the balance is classified on the balance sheet as a current liability.

What follows arithmetically. Liquid assets of $960.9 million against financial debt of $1,628.4 million (convertible notes plus credit facility) is net financial debt of $667.5 million. Adding operating lease liabilities gives $1,077.8 million. At 31 December 2025 the same calculation produced net cash of $534.7 million. (Our computation.)

A note on the classification of the collateral. One billion NIS is roughly $333 million at 3.00 NIS to the dollar, and together with the $120 million deposit amounts to approximately $453 million. The condensed quarterly balance sheet shows restricted cash of zero and restricted deposits of $0.1 million. The precise classification of the collateral among balance-sheet line items cannot be verified from the quarterly release, because it contains no notes. It should also be noted that the agreement's definition of Bank Debt excludes credit secured by full cash collateral — so the covenant calculation itself depends on an interpretation not set out in the public documents.

Source: condensed balance sheet in the second-quarter 2026 release; Form 20-F for 2025, Items 3.D and 5.E and Note 10.

Two further cuts the company reports

Partners revenue — revenue arriving through agencies and freelancers who build sites or applications for their own clients, and through business partnerships such as LegalZoom and Vistaprint. This cut spans both segments. In the second quarter of 2026 it was $213.8 million, growth of 17%. Across the quarterly series: 21% in the fourth quarter of 2025, 19% in the first quarter of 2026, and 17% in the second.

Transaction revenue — a portion of Business Solutions, generated mainly from payment facilitation through Wix Payments, along with Wix POS, shipping solutions and multi-channel commerce. In the second quarter of 2026: $71.5 million, growth of 12%, against 19% in the first quarter.

Base44 is not reported as a separate segment and no revenue or profitability figures are disclosed for it. The only datum the company provides is a management metric: ARR of approximately $100 million in March 2026 and approximately $150 million in May 2026. Its revenue is included within Creative Subscriptions.

Source: key performance metrics and reconciliation tables in the fourth-quarter 2025 and first- and second-quarter 2026 releases.

In terms of competitive assets, the filings document four: a user base of more than 304 million registered users and 6.11 million premium subscriptions at the end of 2025; proprietary payment infrastructure generating $71.5 million of transaction revenue in the quarter; the Partners channel, accounting for roughly 38% of quarterly revenue; and, since 2026, two proprietary language models — the Harmony model and Base44's Base 1.

Management presents the proprietary models as central to its positioning. In the second-quarter release the Chief Financial Officer stated that the deployment of Base 1 "marks a turning point in lowering our AI inference and compute costs," and that on management's estimate Base44's non-GAAP gross margin will be approximately 60% in the second half, against a near-zero margin entering the year.

The competitive threat is defined by the company itself in its annual report, in these terms: "the costs associated with developing, maintaining, and scaling AI-driven platforms like Base44 are substantial and may not subside in a timely manner... if industry pricing pressures or competition, in particular from the dominant LLM developers, limit our ability to generate revenue, Base44 may not become profitable."

The risk factors also name competitors in specific layers: email service providers, payment facilitators, customer service platforms and logo designers within Business Solutions, along with companies serving enterprise-level customers and web design agencies within the Partners channel.

Source: Form 20-F for 2025, Item 3.D "Risk Factors" and Item 4.B; second-quarter 2026 results release.

The starting point is neither earnings nor revenue, but bookings. Wix is a subscription business, and in such a business there are two measures of the same activity: bookings, which are the cash actually collected, and revenue, which is the accounting recognition of that cash across the subscription term. Bookings lead and revenue follows. In the second quarter of 2026 revenue grew 14.9% and bookings 11.6% — and in constant currency, 14% against 11%. When revenue runs ahead of bookings, the company is recognising a balance built up earlier. The increase in the deferred revenue balance in the quarter was $8.3 million, against $26.2 million in the prior-year quarter.

The second step is to see that this year contains two separate decisions that are easy to conflate. The first is operational: to invest aggressively in Base44 and Harmony, which explains the rise in compute costs and the 60.6% jump in marketing spend. The second is financial: to repurchase roughly 30% of the share capital through a tender offer, funded by selling the securities portfolio, drawing bank credit and raising a private placement. Both decisions land on the same line — free cash flow — but they are entirely different things.

The company itself supplies the bridge, and it is worth reading in full. The first-quarter release states that the cash flow outlook includes the foregone interest income on the cash balance liquidated to fund the tender programme and the interest expense on the credit facility, along with approximately $64 million of headwind on the full-year operating expense base, net of hedging, as the shekel strengthened. And explicitly, in the company's own framing: assuming the pre-tender capital structure and excluding acquisition costs, the full-year free cash flow margin would continue to sit in the low- to mid-20% range. (Our computation: $64 million on an annual revenue base of roughly $2,270 million is 2.8 percentage points.)

The fourth step is to examine the quality of the reported cash flow, not only its level. Net cash from operating activities in the second quarter was $55.6 million. Within it sits a single line: "increase in accrued expenses and other current liabilities" of $84.4 million. In the first quarter of 2026 that same line was $18.8 million out of $78.5 million of operating cash flow, and in the second quarter of 2025 it was $58.1 million out of $150.3 million. (Our computation: the line represents 151.9% of the quarter's operating cash flow, against 24.0% in the first quarter and 38.7% in the prior-year quarter.) Because the company publishes no quarterly notes, the composition of that line is not known.

The fifth step is to follow the restructuring line. The charge recorded in the quarter was $27.1 million. Of that, $19.2 million is non-cash impairment and $8.5 million was paid in cash. In its June release the company stated a total pre-tax charge of $30 to $35 million, "a substantial majority of which will be cash expenditures for the payment of severance," with the cash to be paid in the second half. (Our computation: 71% of the charge recorded in the quarter is non-cash, which means the balance of the severance cash is still ahead.)

The sixth step is to look at the convertible notes as they behave rather than as they are named. The conversion price is $210.49 per share. Against the market price at the close on 21 August 2026 of $82.07, a rise of roughly 156% is required for conversion to be in the money. (Our computation.) In planning terms, that means an obligation to repay $1,150 million in cash in September 2030, rather than an instrument that becomes equity. The other side of the same coin is that the coupon is zero and nothing falls due before 2030.

The seventh step is to test the single statement carrying the full-year outlook. Management indicated a non-GAAP gross margin at Base44 of approximately 60% in the second half, and said this translates into "approximately two points" of improvement in consolidated non-GAAP gross margin. (Our computation: on second-half revenue of roughly $1,150 million, two points is about $23 million of incremental gross profit, implying Base44 revenue of about $38 million for the half — roughly $77 million annualised. An alternative calculation, assuming core Creative held the prior-year quarter's gross margin, gives roughly $88 million annualised.) Both computations sit below the headline ARR figure of approximately $150 million. That gap can be reconciled in two alternative ways, and the public documents contain no information to decide between them.

The eighth step is to set gross margin against the starting point, not only against the prior quarter. Non-GAAP gross margin in the first half of 2026 was 66.38%. Adding the two points management pointed to brings the second half to roughly 68.4%. In the first half of 2025 the same measure was 69.19%. (Computed by us from the reconciliation tables.)

The ninth step is to treat the disclosure limitation itself as an analytical fact. Wix does not file full quarterly financial statements. There are no notes, no auditor review, and no breakdown of balance-sheet items at the quarterly level. Three figures material to the picture — the composition of accrued expenses, the Base44 contingent consideration balance, and the split of acquisition-related expenses — will be published only in the annual report, around March 2027. Anyone analysing the company on a quarterly basis does so with less information than is customary for issuers reporting under the full regime.

The tenth step is to separate market mechanics from the business. The share's trading range over the past twelve months runs from $40.16 to $190.93, and short interest represents roughly 25.8% of shares outstanding. Price movement in such conditions is not necessarily information about the business. The business is examined against the filings, not against the chart.

All data in this section originate in company filings. Computations performed by us are marked explicitly.

1. Dependence of quarterly cash flow on the build in accrued liabilities. The balance of "accrued expenses and other current liabilities" rose from $146.7 million to $278.3 million in six months, while "other long-term liabilities" fell $32.7 million. The composition is not disclosed. If part of it settles in cash in the second half, that amount leaves the cash flow of that period.

2. The gap between bookings and revenue. In the second quarter bookings grew 11.6% and revenue 14.9%. The company guided explicitly that bookings would continue to lag revenue "by a few points" as a result of the more immediate impact of Partners softness on bookings.

3. Deceleration in the Partners channel. Revenue growth from the channel fell for three consecutive quarters: 21%, 19%, 17%. In its June release the company attributed part of the guidance reduction to "a more pronounced slowdown, beyond our previous expectations, in the growth of our Partners business during the second half of May and early June."

4. Artificial-intelligence costs against gross margin. Cost of revenue in Creative rose 49.7% on revenue growth of 15.3%. The assumption underpinning the second-half outlook — a gross margin of approximately 60% at Base44 — has never been reported as an actual result.

5. Capital structure and the credit facility window. The company moved from net cash to net debt of $667.5 million, and shareholders' equity stands at a deficiency of $1,740.9 million. The $500 million facility is classified as a current liability, and the agreement's window closes on 31 March 2027.

6. Currency headwind. Most research and development expense is paid in shekels while all revenue is in foreign currency. The company quantified approximately $64 million of annual headwind, net of hedging.

7. Change in the tax regime. The company benefits from Preferred Technological Enterprise status at a 12% rate. Israel's Minimum Corporate Tax Law for Multinational Groups was enacted in December 2025 and applies from 1 January 2026, and according to the annual report it may affect how the incentive is utilised.

Items to monitor

The following are neither risks nor expectations. They are figures that can be checked against the next quarterly report: (a) the weight of the accrued-liabilities build within operating cash flow; (b) non-GAAP gross margin, consolidated and for Creative, computed from the reconciliation tables; (c) reported free cash flow alongside free cash flow excluding acquisition and restructuring costs; (d) the gap between bookings growth and revenue growth; (e) the growth rate of the Partners channel; (f) the credit facility balance and any disclosure of its refinancing; (g) any new quantitative disclosure on Base44.

Source: Form 20-F for 2025, Item 3.D; Form 6-K dated 8 June 2026; first- and second-quarter 2026 results releases.