Wix Beats Q3 Estimates by $0.02 but Cuts Cash Flow Outlook

Wix.com reported quarterly earnings per share of $1.42 on Tuesday, beating the analyst consensus of $1.40 by $0.02. The information services provider posted revenue of $570.17 million for the quarter, ahead of estimates of $566.27 million and up 12.9% from the same quarter last year. A year earlier, the company earned $1.80 per share.

The beat did not tell the whole story. Wix recorded a negative return on equity of 1.61% and a negative net margin of 8.54%, and management trimmed a key cash flow target to fund AI investment. That trade-off drove the market reaction more than the headline numbers did.

What did the conference call reveal?

The AI business anchored the call. Base44 reached nearly $250 million in annual recurring revenue, with stronger conversion, improving cohort retention and upgrades. Its Q3 gross margin came in at 58%; management expects a second-half margin around 60% and sees further improvement ahead.

Growth opportunities are spreading across the portfolio:

• Symphony reached millions of dollars in ARR within months of launch.
• Studio Two's open AI-enabled workflow aims to attract agencies and support an enterprise offering.

The spending plan carries a cost. Wix is accelerating Base44 marketing and enterprise sales investment, lowering its 2026 free cash flow margin outlook to approximately 16%, from a prior target in the high teens. Management said spending will remain tied to return-on-investment targets.

Guidance held elsewhere. Wix maintained its full-year outlook for low-teens bookings growth and low-to-mid-teens revenue growth. For Q4, it expects low-double-digit revenue growth, with bookings growth continuing to lag revenue.

Efficiency remains a talking point. The company ended Q3 with 25% fewer employees than in 2022, while delivering double-digit bookings growth and launching new products. Management expects core-business free cash flow to improve further. In plain terms: Wix is running leaner and betting the savings on AI.

How did the stock respond?

WIX traded down $2.03 on Thursday, closing at $66.31, a 3.0% decline. Trading volume was thin at 45,476 shares, against an average of 1,909,111. The stock carries a 50-day simple moving average of $76.48 and a 200-day average of $70.22, with a 52-week range of $40.16 to $134.09.

Valuation metrics reflect the negative earnings: a market cap of $3.87 billion, a P/E ratio of -17.18, a PEG ratio of 30.60 and a beta of 1.06.

What are insiders doing?

Director Ron Gutler sold 5,718 shares on Thursday, August 27th, at an average price of $85.42, for a total of $488,431.56. The sale cut his position by 26.78%, leaving him with 15,631 shares worth approximately $1,335,200.02. The trade was executed under a pre-arranged Rule 10b5-1 plan and disclosed in an SEC filing.

CEO Avishai Abrahami moved the other way. He purchased 654 shares on Monday, August 31st, at an average cost of $59.89 per share, a total of $39,168.06. The purchase raised his position by 0.13% to 486,225 shares valued at $29,120,015.25. Across the last three months, insiders bought 2,622 shares worth $157,032. Insiders own 6.20% of the company's stock.

What are analysts saying?

The research notes split sharply after the print:

• Evercore set a $95.00 price target on August 4th.
• Jefferies reaffirmed a buy rating with an $85.00 objective on Tuesday.
• Wedbush cut its target from $80.00 to $75.00 and set a neutral rating.
• Cantor Fitzgerald reduced its target from $90.00 to $80.00, keeping an overweight rating.
• Bank of America downgraded the stock from buy to underperform, cutting its target from $75.00 to $68.00.

JPMorgan, Wells Fargo and RBC also lowered their targets, adding pressure to sentiment. In total, ten analysts rate Wix a Buy, ten a Hold and three a Sell. MarketBeat data shows an average rating of Hold and an average price target of $89.52.

The tension is straightforward. Base44's near-$250 million ARR and roughly 58% gross margin offer a credible growth engine, but the weaker near-term cash flow outlook has weighed on investors despite the earnings beat. Wix is choosing acceleration over margin, and the analyst community has not yet decided whether that choice pays off.