Wix surges on $2B buyback as AI platform Base44 hits $100M ARR
Website builder announces $250M investment, beats earnings estimates despite revenue miss
Wix.com shares jumped 7.2% in Wednesday trading after the website-building platform announced a $2 billion share repurchase program and a $250 million strategic investment, overshadowing mixed fourth-quarter earnings results that saw profits beat expectations while revenue slightly missed forecasts.
The stock, which had gained 9% in premarket trading to $79 before settling at a 6.24% advance, rallied as investors responded to an aggressive capital allocation plan that will see the majority of the buyback completed before the end of 2026. President and co-founder Nir Zohar said the company would "aggressively pursue" the repurchase program, which represents roughly half of Wix's current $4 billion market capitalization.
Wix reported non-GAAP earnings per share of $1.81 for the fourth quarter of 2025, beating analyst estimates of $1.36 by 33%. However, revenue of $524.3 million, while representing 14% year-over-year growth, fell short of the $527.8 million consensus forecast, according to the company's earnings announcement.
The $250 million private placement, led by Durable Capital Partners with $162.5 million, underscores institutional confidence in Wix's long-term strategy despite near-term margin pressures. The transaction is expected to close on March 5, with proceeds earmarked for general corporate purposes.
Central to Wix's growth narrative is Base44, an AI application-builder that achieved $100 million in annual recurring revenue within a year of its founding and just nine months after Wix acquired it. Base44 "significantly expands Wix's total addressable market to include software applications," the company said, describing the product as a "category-defining" pillar of future growth.
Chief Executive Avishai Abrahami declared 2026 "a new chapter" for Wix, driven by what he called the company's AI playbook. The strategy centers on two platforms: Wix Harmony, which the company said is showing "better-than-expected early performance with improved conversion and monetization," and Base44. Wix's overall annualized recurring revenue reached $1.52 billion, up 13.5% year-over-year.
"We are reshaping how people create in the AI era and expanding the world of what's possible online," Abrahami said in the earnings statement. "Our vision is to simplify complex technologies and provide tools for users and businesses to create online, powered by advanced AI and enterprise-grade infrastructure."
Wix's consolidated bookings grew 15% year-over-year to $534.5 million in the fourth quarter. Free cash flow reached $155.6 million, and the company repurchased approximately 750,000 ordinary shares for $100 million during the quarter. However, adjusted gross margin declined by 200 basis points to 68%, reflecting strategic investments.
For the full year 2026, Wix projected mid-teens percentage growth for both revenue and bookings, with free cash flow margins expected in the low-to-mid 20% range. The wider FCF guidance reflects "the dynamic growth trajectory of Base44," the company said.
Analysts maintain a largely positive outlook despite some tempered expectations. As of March 3, 21 analysts maintained a consensus "Buy" rating, with an average 12-month price target of $171.19, implying potential upside of more than 130% from current levels around $74. Several firms, including Benchmark and Jefferies, recently lowered their price targets while retaining buy ratings, citing concerns over projected gross margin deterioration and the impact of strategic investments.
The rally Wednesday extends Wix's recovery from its 52-week low of $60.22, though the stock remains well below its 52-week high of $197.85 reached earlier in 2025. The 50-day moving average stands at $86.35, while the 200-day average is $129.11, indicating the stock has been under pressure amid broader technology sector volatility.
Wix's pivot toward AI-powered application building represents a strategic bet on expanding beyond its core website creation business into a larger market for business software. The combination of aggressive share repurchases and institutional investment suggests confidence that the company can execute this transition while maintaining growth momentum.